For decades the market in services like marketing, strategic consultancy and PR has been dominated by small groups of big brand-name players, with global footprints, substantial overheads, and the hefty price tags to match.
But not for much longer, says Daniel Kline, senior vice president of Silicon Valley disruptor Globality.
Founded by Al Gore’s former business partner Joel Hyatt, Globality uses a proprietary AI platform to match smaller experts with better local knowledge to buyers' precise requirements on a project-by-project basis, doing the legwork to find the best skills rather than simply the best-known providers.
Here’s his vision of the smooth-riding future of professional services.
Global trade should be a smooth and friction-free reality – but currently it isn’t, due to trade barriers and lack of local market knowledge. Businesses need better access to local skills and services to give companies of all sizes the opportunity to create valuable cross-border relationships, and to grow successfully.
When it comes to international partnerships, there is frequently a deep-rooted mentality of sticking to what you know. Large, global companies looking for market-specific expertise in services, in areas like legal and marketing, tend to go with the familiar global brand names they’ve always gone with when looking for potential cross-border partners.
This is harming businesses large and small. The smaller service providers - between 5 and 500 employees - are often very capable, but are unknown and undiscoverable to larger corporations. At the other end of the scale, we have big corporations that have specialist needs, but don’t have the time and ability to evaluate or discover smaller, more boutique, local experts.
Innovation and a new approach are needed to move the professional services market forward. New technology is levelling the playing field, enabling large and small firms to meet and trade, regardless of size or location.
Identifying local expertise is critical
There are nuances in every local market – from soft issues like culture and language, to codified laws and regulation – and it can be challenging to find the provider with the right market knowledge.
Close to 90 percent of professional services fees go to the largest one percent of companies, in part because larger companies find it simpler to work with fewer vendors and are comfortable rolling out the same model in multiple markets. But one size does not fit all when it comes to different markets and taking this approach can limit effectiveness. Often it’s the smaller, more specialist companies in markets that know the landscape best. They are more agile, better connected and often provide better quality and value for money.
We recently worked with a client - a large pharmaceutical company - that was launching a new product across seven European countries. The company had an incumbent global provider, but we introduced them to four new local providers that were selected by Globality's AI-enabled technology platform and our industry experts, based on those smaller, independent firms’ outstanding capabilities. The client selected one of the smaller providers because they had local knowledge and delivered high quality results, at only half the cost of the larger incumbent.
The local model is a cure for industry mistrust
Most of us in business who have ever gone through an RFP (Request for Proposal) process have become familiar with the big supplier pitch – the "A-team" pitches, then followed by the B, C, and, all too often, D teams who take over. When work begins, the A-team are nowhere to be seen and results then fall short.
It’s no wonder then that words like ‘trust’, ‘transparency’ and ‘accountability’ have become almost meaningless. Small and midsized enterprises need to reclaim those terms. According to the Federation of Small Businesses, in the UK small businesses accounted for 99.3% of all private sector businesses last year and the combined annual SME turnover represented 47% of all private sector turnover. With better local knowledge, competitive rates and a hunger for business, these smaller suppliers can add tremendous value to multinationals looking for greater value for money. Here then is an argument to try the unknown.
The rise of micro-multinationals
The web and ever-improving delivery mechanisms should put us in an era where small businesses can rapidly expand and enter new markets, but discoverability and connecting effectively with new clients remain primary hurdles. The industry needs to foster a new class of micro-multinationals,
small and midsized businesses that handle incoming large projects from global clients wanting in-country expertise. In doing so, they can transform themselves from local players to internationally-recognised ones, and at the same time drive the benefits of globalisation deeper into the world’s economies.
Globalisation is here to stay, but it needs to go more local. We gave a lot of thought to building a business that could make globalisation beneficial for everyone involved. Now that the best matched providers, on a project-by-project basis, are in plain view, larger companies and SMEs can finally proceed in daylight and not in the limited and opaque old boys network of ‘who you know’.
The industry needs technology disruptors to step forward and shake up the status quo. We need to change old habits and shift mindsets to match clients and local providers effectively. It’s time for business to move forward, in a new direction, a local direction.
Daniel Kline is senior vice president of Globality