E-Commerce Consultants - Industry Organization

The nature of e-commerce consulting contracts can vary considerably. Some consultants are brought in merely for short-term planning. In this case, they simply may offer guidance or play devil's advocate en route to mapping out a broad direction for e-commerce strategies. Such consulting operations typically are conducted on an hourly basis and last a very short time, from several days to several months. Other contracts amount to more comprehensive partnerships in which a consultancy agrees to handle e-commerce strategies and concerns as they arise over the long term, meeting new challenges as they present themselves. In such contracts, firms essentially outsource an essential component of their business to a consultancy. These agreements can last for years, or indefinitely through the lifetime of the client company. International Data Corp. estimated that the average e-commerce consulting project lasted about eight months, where the first three months are spent devising an e-business strategy and the final five months are devoted to constructing the technological and organizational infrastructure for that strategy to be realized.

Consultants usually start by running several days of workshops with company leaders to map out where the firm currently stands and where it wants to go, and to get a feel for the challenges involved in getting the firm online in a competitive manner. In this way, consultants can pare down the project to keep it within the scope of the company's and the consultant's practical reach. According to Fortune, some major consultancies offer very short-term assessment and evaluation services. Big Five consultancy KPMG, for instance, launched a three-week program called Saved, which promised an assessment of companies' e-business systems and recommended improvements, while IBM's Global Services provided an online e-commerce evaluation program.

The myriad issues within the broad spectrum of e-commerce—from securing online transactions and customer data to implementing cutting-edge software and choosing a model for the Web site—add up to a ripe market for consulting firms, creating niche markets in which consultancies can distinguish themselves and begin to build market share. According to Fortune, specific areas of e-commerce consulting were more or less characterized as follows: technology implementation was the specialty of systems integrators and the Big Five consulting firms; e-commerce business strategies were the domain of management consultants; consultants known as "interactive strategists" focused on the marketing, customer service, and outreach aspects of e-commerce; and start-up consultancies known as "i-builders" worked to combine technology, strategy, and marketing consulting for quick overall development of an e-commerce presence. Fortune provided rough estimates of costs and project durations for each category, reporting that management consultants generally work for three to four months and cost between $400,000 and $800,000; interactive strategy consultants take six to eight weeks and charge $200,000 to $400,000; systems integrators and Big Five consultancies take projects for six months to three years and run between $1 million and $10 million; and i-builders' engagements last about four to six months and cost between $750,000 and $2 million.