Will data be the consulting industry’s new oil?

Today’s oil industry was born in the second half of the 19th century, after a Scottish chemist, James Young, discovered that he could distil a clear, light oil that could be used in lamps from the dark, viscous stuff that seeped out of coal seams. As the process of refining was itself refined, oil production took off – from just 2,000 barrels a day in 1859 to more than 12 million just after the turn of the 20th century. Oil was important because it powered things, and because its supply was abundant yet controllable. It made, and continues to make, fortunes for those who control its production.

Success in consulting is similarly based on having access to a resource and the ability to control it, but the industry’s fuel isn’t oil, it’s skilled labour. Consequently, there’s always been a ‘war for talent’, just as there have been actual wars for oil. As with oil, the consulting industry may be reaching its Hubbert’s peak: demographics, rather than geology, may mean that the number of suitably qualified and experienced people will shrink, leaving firms fighting ever more fiercely for this increasingly scarce resource. Not blind to this risk, the consulting industry has sought to diversify: it’s chasing new business models, rather than renewables, but the objective is the same. The problem is that those new models aren’t enough: they’re the equivalent of a solar farm in the Nevada desert that supplies a few hundred thousand homes but falls far short of meeting the world’s energy needs.

So, the consulting industry needs a different asset, something desirable and abundant, yet controllable. And I think that asset will be data.

Data is increasingly the fuel of business. It, not people, powers production lines; it drives decision-making; like Young’s lamp oil, it sheds light on what we do, and helps us to do it better. That’s true for clients, and for consulting firms themselves: replacing parts of the consulting process with data makes perfect sense.

Data is everywhere, but making sense of it requires new technology, processes, and ideas. Lots of firms are therefore investing in the chemistry of ‘refining’ data. But it’s worth remembering that while James Young made a tidy packet out of his discovery, enough to run his estates and go yachting, he wasn’t the first Rockefeller. Most likely he didn’t know where the most money would be made. And we don’t today. Is it in data ‘exploration’? Will the Gettys of the future be those that find and buy the rights to specific data ‘reservoirs’, or those that process the data others own? Is there more money to be made in distributing the data, or in setting up the data equivalent of gas stations? How do you even price any of that?

The chances are that data’s Rockefeller is out there today. The question is,  is it a consulting firm?