The increasing prevalence of the Internet has seen many companies transform their operations either completely or partially onto the Internet for conducting business. The enormous potential of the B2B e-commerce industry has been the driving force for most companies migrating onto the Internet.

B2B e-commerce is expected to touch $1.8 trillion in the year 2003 alone, according to Robertsons Stephens. By 2002, seventy three percent of US firms are expected to realize revenues through e-commerce. Globally, the figure is expected to touch fifty four percent according to eMarketer. Hundreds of vertical and horizontal markets will be conducting B2B e-commerce as it lowers procurement and products costs and introduces scale economies and scale efficiencies, essentially expanding markets.

In essence, B2B represents a rewiring of the economy—giving rise to huge, durable companies, huge addressable markets, profound benefits and far-reaching implications. In this scenario, with a greater number of firms migrating onto the Internet, it is necessary that the migration process should result in value creation for the company. To take advantage of the vast opportunities in the Internet space, the migrating companies now turn towards consultants for strategy formulation advice and other functions. Hence, the role of consultants thus assumes critical importance in defining the success of the enterprise.

E-business Consultants

E-business consulting is a term that is loosely used by many firms. The scope of activities that is generally addressed under this term range from simple services such as web page designing to complex value-added services covering all aspects of the value chain. However, the essence of e-business consulting is not in the mere creation of a web presence for a company nor is it the third party advisory services that are offered by most consultants.

An e-business consulting firm may be defined as a company that offers an integrated, comprehensive set of relevant services, either in an advisory or implementation role, to enable firms to migrate their operations and products/services onto the Internet and to adapt successfully to the changing ambient conditions, in the context of the long term business goals of the firm.

In the Net’s wake, business consulting is enjoying an impressive little boom of its own. The $19.6 billion US consulting market is growing at twenty percent annually and is expected to reach $52.8 billion by 2003, according to New Jersey–based IT Services Advisory. Meanwhile, the price tag on consulting contracts has grown from thousands of dollars to an average of between $1 million and $3 million per stint, and projects that once took months or years are now completed in fewer than ninety days. A few years ago, a consulting contract might have involved installing an inventory management system or designing a corporate web site. Today, it might include handling everything from creating a business model and hooking up servers for a dot-com, to revamping a Fortune 500 company’s supply chain, marketing plan or e-business strategy.

Forrester Research expects e-commerce consulting to be a nearly $65 billion market by 2003, up from $10.6 billion at the end of last year. Forrester predicted in a recent report that for the next two years, demand for services will exceed supply, driving Global 2000 companies to hire the service providers they can get.

An estimate of the demand for e-business consulting projects can be obtained by considering the fact that Viant gets about twenty customer inquiries a week but takes on only two or three clients. This exceedingly favourable business environment, like all forms of extreme wealth, is a mixed blessing for the major e-business consultants world wide. Analysts estimate that demand currently outstrips supply by about fifty percent and don’t expect the situation to change for several years.

However, the e-business consulting industry is by no stretch of the imagination a mature one yet. Quickly scaling a publicly held service business in today’s volatile environment is no easy task. With limited time and in-house resources, the pressure to own a successful net strategy these days has never been more intense. And neither has the competition among business consulting firms to sell strategies to every dot-com in the marketplace.

E-business consulting in the USA is slowly being monopolised by a group of new fast-growing companies. These include Viant, Sapient, Proxicom, Razorfish, Scient and Inforte. Today, most of the big accounting firms—including Andersen, Ernst & Young and Deloitte & Touche—have started their own consulting practices to meet the growing demands of e-commerce. Once-young companies such as Scient and Viant are now considered veterans, while new firms, such as XUMA, are popping up like daisies. Old guard consulting giants such as McKinsey & Company and Boston Consulting Group—are bleeding talent to net start-ups and the newer "e-consulting" firms.

The deep-pocketed Global 2000 companies that are clients, want end-to-end e-commerce packages that include strategy, marketing, design and technology. However, a Forrester research concluded that no service provider demonstrates excellence across these categories and that nearly all demonstrate biases and knowledge gaps that stem from their radically different origins.