Since its launch almost two years ago, Comatch has grown its database of consultants to over 1,700 and matched over 200 projects with independents or consulting teams. An aspect which has received less attention, but today represents a considerable part of its operations, is its support to consulting firms: just like corporate clients, consultancies too use the firm’s marketplace to add much-needed capacity and expertise to their projects.
Founded in 2014, launched in 2015, Comatch.com is a digital marketplace that connects independent consultants with clients. The firm’s business model plays into the rapid rise of the freelance economy, also known as the ‘gig economy’ – across Western economies, freelancers are said to make up more than 80% of the total number of consulting enterprises. Comatch has seen strong growth since inception, growing its footprint to operations in five countries, and closing, according to the firm’s own data, more than 200 consultancy projects.
The company has, in the slipstream of larger rivals in for instance the US, the UK and Australia, been dubbed by analysts as the ‘consulting disruptor’ for the DACH region. The ambitions however span beyond existing terrain – co-founders Christoph Hardt and Jan Schächtele told Consultancy.uk earlier this year that they aim at growing into the “leading consulting matchmaker in Europe”. On the back of the potential, Comatch’s business plan has drawn interest – the marketplace has to date attracted two rounds of financing, with the latest round involving a €4 million financial injection.
With the growth capital, Comatch is working on expanding its geographical base and, equally important, its brand awareness among clients. The journey will however not be an easy one, clients are not easily moved away from the consulting decisions they have made in the past, or long standing preferred supplier agreements. “That is our main challenge”, acknowledges Hardt. Winning over clients is notorious for being one of the most intriguing challenges in the consulting industry, in addition, the competition is fierce, in particular in the segment in which Comatch operates – experienced consultants and project managers with a tier-1 background.
Helping consulting firms ramp up
Besides connecting consultants with corporate clients, Comatch has since its inception also connected consultants with consulting firms – an area of its business model which has received considerably less media attention but today represents, according to Hardt, a “significant” share of the company’s operations. “We are increasingly seeing consulting firms leverage our network as part of their own resourcing strategy”, explains Hardt. He says that, in practice, the request for this type of support follows from three situations: when resourcing lacks, when consultants are required for specific geographic locations or when specific industry/functional expertise is needed.
By tapping into Comatch’s marketplace, consultancies can gain two instant benefits. “The platform provides them with instant delivery and quality”, the co-founder says. “The consulting space has heated up significantly over the past years, and at the same time clients are more and more unpredictable in their decision-making and have in general taken a critical view on external consultants. They are less likely to wait for project teams to be assembled – if one consultancy can’t deliver, they are quicker in turning to rivals to fill the gap.” From a consulting firm’s perspective, the quick delivery in his eyes not just benefits getting hold of ‘hot’ revenue potential, but arguably more so helps satisfy a need (customer experience) and build credibility.
The former McKinsey & Company consultant adds that Comatch’s quality-controlled environment (“we have strict criteria for selecting independent consultants and our matching process ensures a strong fit on both hard and soft factors”) means that consulting firms also receive options on which they can rely.
Although Hardt refuses to disclose client names, sources from several high-end consultancies close to the matter have in recent months confirmed to Consultancy.uk that they are using Comatch’s platform to find consultants in a similar fashion as they use, say, Uber to order a taxi.
An edge in the long run?
Hardt adds that working with digital matching platforms and marketplaces such as Comatch can, in the longer run, offer consultancies with a strategic edge, allowing them to work around consulting’s traditional (financial) constraints. In conventional consultancy models, revenue growth is bootstrapped by growth in the number of consultants. Headcount expansion therefore, however desirable it may be, comes with risks and costs. What if an employee on the payroll does not perform? What if a client withdraws a project? Through the use of a flexible staffing model, consultancies can in essence outsource such risks away from the business, enabling them to top up income whilst adding no fixed costs to the organisation.
The continued rise of independent consultants, as well as a range of other forces that are changing the face of the industry, are forcing firms, large and small, to rethink the way how they staff their projects. Whilst many are increasingly accepting the idea of adding a flexible frontier beyond a firm’s own consultants base, differences arise in how they seek to do so. In particular the larger firms with financial muscle are betting heavily on expanding their own independent networks – often built on the pillars of their alumni and associate platform. PwC for example launched its ‘Talent Exchange’ (being piloted in the US), Deloitte has developed its own solution in the UK (named ‘Forefront’), and Capgemini has a global hub for working with independents. Boutiques and mid-sized firms struggle however with the investments required, with varying strategies adopted across the landscape.
The debate too has landed among analysts, yet across the board, experts estimate that, to date, the efforts and costs put into building own digital networks have so far not provided the returns hoped for. Hardt, not surprisingly, agrees: “Establishing and maintaining a network of active freelance consultants is not just a matter of launching a database. It is much more about a selection of capable consultants, and grooming the network to maturity – both activities which are time consuming and specialised.”
In addition, in a market where the ‘war for talent’ is looming around the corner, it is becoming increasingly challenging to strike the right mix at the right time, a formula which in today’s fast-paced landscape is a key success factor for a successful placement. “Accomplished experts are scarce and are hard to find immediately. And in the case they have been earmarked, they also need to be available at exactly the moment you want them. The odds are slim. At Comatch, our infrastructure specialises in setting the conditions to maximise the probability such matches happen. Technology and intelligence play a large role in this process.”
In Hardt’s view, for the majority of consultancies it would make more sense to procure such services instead of embarking on an own journey. “While the short term costs may be the most apparent as they fulfill an immediate need, it are in fact the long run benefits of working with Comatch that we highlight to consultancies in our discussions with partners and resourcing managers.”
Winning over competition
Comatch is however just one of the dozens of freelancing platforms out there scrambling for share of a market that has by many been dubbed as a ‘winner takes it all’ world. So why should consultancies opt for the German startup above, for instance, Talmix (formerly MBA & Company), expert360, blur, or Eden McCallum? The co-founder points at what he believes are the firm’s two main competitive differentiators.
“We combine the best of different worlds: quick delivery due to the digital approach, a lean structure due to our startup mentality and we deliver excellence via personal interaction as consulting is a people business build on trust and professionalism. We’ve embedded those principles throughout all operations, from admission of consultants to our network, to the quality of client engagements offered and to the process we apply to come to the ideal matching.” The co-founder states that about 30% of the firm’s consultant database boast a background at tier-1 consultancies, including the likes of the strategy consulting firms and the Big Four. Those can always team up with industry experts of the platform, many of them former C-level executives or board members.
Furthermore according to Hardt, the company has a high service mentality, the transparent fee model and automated support infrastructure unburden customers, consultants and consulting firms. “Our fees are transparent right from the beginning, and from start to end our technology and team is ideally positioned to make hiring a freelance consultant the easiest ride there is.”