How to Choose Data Science Consultants in 2024

Data science is transforming businesses and industries worldwide. Companies are leveraging data science and machine learning to uncover insights, optimize operations, and create competitive advantages.

Content Navigation show

However, building an effective data science function requires specialized skills, experience, and resources. That‘s why many organizations partner with data science consultants to accelerate their analytics journeys.

In this comprehensive 4000+ word guide, we‘ll explore everything you need to know about choosing data science consultants in 2024, including:

  • What do data science consultants do?
  • Key skills and capabilities to look for
  • When you need external help
  • How to evaluate and select consultants
  • Pricing and contracts
  • Setting your project up for success

We‘ll also share our perspective as an experienced data analytics consultant with over 15 years in the field. Let‘s dive in!

What Do Data Science Consultants Do?

Data science consultants are experts who help companies execute analytics initiatives and build internal data science capabilities. They provide strategic guidance, deliver tangible analytics solutions, and transfer knowledge to internal teams.

Common data science consulting services include:

Strategy Development

  • Assessing the business landscape and identifying opportunities to apply data science
  • Defining analytics objectives aligned to business goals
  • Designing long-term data science roadmaps and target operating models
  • Building data strategies, policies, and governance

Solution Delivery

  • Scoping, designing and building machine learning models or AI applications
  • Developing big data pipelines and analytics architectures using tools like Spark and Hadoop
  • Implementing analytics deliverables like BI dashboards, predictive models, and data visualizations
  • Productionalizing and maintaining models and applications using MLOps and CI/CD

Team Enablement

  • Upskilling employees through training programs and workshops on data science fundamentals
  • Recruiting specialized data talent like data engineers and scientists for internal teams
  • Coaching internal teams on processes like CRISP-DM, agile analytics, and effective collaboration
  • Advising on optimal organizational structures to support analytics programs

The best consultants act as strategic advisors and implementation partners. They not only deliver concrete solutions but also enable lasting capabilities.

Key Skills and Capabilities to Look For

Data science consulting is a multifaceted field requiring diverse expertise. Based on our experience, here are the key skills and capabilities to evaluate:

Domain Experience

Look for consultants with experience in your specific industry and business use cases. Vertical expertise helps consultants quickly understand priorities and challenges. It also informs their solution design.

For example, developing fraud detection models requires understanding the financial sector‘s regulations, data practices, and risk appetites.

Technical Acumen

At the core, consultants should have proficiency in areas like:

  • Statistical modeling and machine learning algorithms
  • Data engineering – ETL, data pipelines, SQL, NoSQL databases
  • Data visualization and dashboarding
  • Cloud platforms like AWS, GCP, Azure
  • Programming languages like Python, R, Java

Assess their technical breadth and depth across the data science lifecycle.

Analytics Translating

The ability to translate analytics insights into business impact and recommend executable actions is crucial. Consultants should communicate complex data science concepts clearly to business stakeholders without technical jargon.

Strategic Thinking

Consultants should take a holistic view of capabilities, objectives, and the competitive landscape to create pragmatic roadmaps. A strategic mindset is vital for long-term success vs. tactical quick wins.

Delivery Leadership

Managing data science projects end-to-end requires leadership, stakeholder management, and solid project execution skills. Experience successfully leading analytics engagements with a structured delivery approach is invaluable.

Teaching Ability

The best consultants don‘t just deliver models but also teach teams how to replicate success. Mentoring, coaching, and knowledge transfer capabilities are key differentiators.

Business Acumen

Understanding core business concepts like financial modeling helps contextualize data science impact. Cross-functional knowledge improves solution design.

Problem Solving

Analytical thinking and intellectual curiosity enable consultants to frame problems effectively and devise creative data-driven solutions.

Ethics and Governance

Consultants must incorporate responsible AI practices into their work such as fairness, explainability, and transparency. They should advise clients on addressing ethical concerns.

When You Need External Help

While building in-house capabilities is ideal long-term, data science consultants provide strategic value in several situations:

Lack of Internal Skills and Bandwidth

If current teams lack analytics expertise or bandwidth, consultants provide immediate skills and capacity. They can execute quickly without compromising quality.

Our analytics consulting engagements often deliver more value in 6 months than a new in-house hire could in their first year.

Need for an Outside Perspective

External consultants provide unbiased assessments of capabilities and opportunities. They identify blindspots and advocate for modern best practices based on broad experience.

Consultants act as a neutral sounding board to stress test assumptions and strategies.

Urgent Business Needs

For time-sensitive initiatives, consultants can deliver faster than attempting to hire. Onboarding and upskilling new employees takes months, whereas consultants can mobilize quickly.

We‘ve helped clients launch predictive models and minimum viable products (MVPs) in just 4-6 weeks to address pressing opportunities.

Limited Internal Data Science Experience

If data science is new to your company, consultants offer hands-on guidance through initial projects. This kickstarts internal learning and helps build momentum.

Through our guided piloting approach, clients develop foundational capabilities to support scaling.

Temporary or Unpredictable Workloads

Consultants provide flexible scaling, allowing you to adjust resources based on evolving needs. You avoid over or under investment in permanent headcount.

We offer on-demand pricing models to dynamically match workloads.

Lack of Specialized Skill Sets

Some analytics skills like MLOps, NLP, and computer vision are hard to hire. Engaging specialists for specific skills gaps is pragmatic.

Our network of on-demand consultants provides targeted expertise in 200+ AI domains and technologies.

Transforming Capabilities and Culture

Strategic initiatives like creating a data-driven culture or modernizing systems require outside expertise to drive change. Consultants provide focus and authority.

We‘ve guided clients on their multi-year journeys to become AI-driven organizations – from strategy to execution.

The strategic reasons above demonstrate how consultants boost analytics capabilities. They complement and enable internal teams over the long-term.

How to Select a Data Science Consultancy

With the market for data science consultancies booming, there are many options to evaluate. Here is a step-by-step process for selecting the right partner:

Step 1: Define Project Objectives and Requirements

Start by defining business objectives, scope, timelines, budgets, technical requirements, and success metrics. This frames your search criteria.

Prioritize must-have capabilities, experience, and outcomes. Document assumptions and known challenges.

Step 2: Research Relevant Firms and Create a Long List

Use resources like Google, peer referrals, analyst reports, and consultants‘ websites to create a long list of potential partners.

Filter based on capabilities, experience, clientele, and expertise. Aim for 6-8 qualified consultancies.

Step 3: Issue an RFP

Send a Request for Proposal to qualified consultancies detailing your needs. Ask specific questions about experience, approaches, past clients, and project examples to assess fit.

Provide background on your business, objectives, data assets, and technical landscape.

Step 4: Shortlist Consultancies

Based on RFP responses and independent research, narrow down the list to 3-5 consulting firms that best meet your criteria.

If needed, conduct preliminary interviews to address open questions and assess communication skills.

Step 5: Conduct Interviews and Demos

Interview shortlisted consultancies to evaluate their teams, knowledge, and communication skills.

Get demos of prior work and have them present proposals tailored to your project. Assess cultural alignment.

Step 6: Validate through References

Speak with their client references to fact check claims and understand working style.

Look for relevant examples of enabling clients through a combination of strategic advice and delivery excellence.

Step 7: Compare Proposals and Pricing

Compare project plans, timelines, team composition, technologies, and pricing models side by side.

Negotiate until you find the optimal balance of quality, cost, and flexibility for your needs.

Step 8: Select Your Preferred Partner

Choose the consultancy that demonstrates the strongest fit for your needs in terms of capabilities, expertise, cultural alignment, and value.

Move forward with the partner that you feel can guide you beyond just doing projects, to building long-term capabilities.

By using a structured selection process, you can identify the right data science consultancy for your specific requirements and objectives.

Typical Pricing Models

Data science consultants offer flexible pricing models tailored to business needs:

  • Time and Materials: Hourly or daily rates for consultants based on role seniority. Better for shorter undefined projects.

  • Fixed Fee: Single fee covers the entire project based on well-defined requirements. Provides cost predictability.

  • Retainer: Prepaid block of hours or days at discounted hourly rates. Good for ongoing work without long-term commitments.

  • Hybrid: Mix of fixed fee and time and materials. Fixed fee project cost capped at a maximum. Provides protection for unknowns.

  • Royalty: Consultants earn a percentage of revenue or profit from the solution. Incentivizes business impact but riskier.

  • Equity: Consultants receive equity stake in solution or IP created. Used for highly strategic partnerships.

Discuss options that provide the right balance of flexibility, cost control, and incentives for your needs. Be very clear on payment terms and conditions.

According to a recent poll by CIO Magazine, median hourly rates for data science consulting fall in these ranges:

  • Junior Consultants: $125 to $175 per hour
  • Mid-level Consultants: $175 to $250 per hour
  • Senior Consultants: $250 to $500 per hour

For a typical 4-6 month enterprise engagement, expect to invest $250,000 to $1 million. Budgets under $100,000 are only feasible for narrow point solutions.

Setting Your Project Up for Success

To maximize the value from engaging data science consultants, focus on setting your project up for success:

Ensure Executive Sponsorship

Secure an executive sponsor to provide authority, access to resources, and align stakeholders. Lack of leadership support risks failure.

Formalize a Statement of Work

Detail objectives, scope, timelines, deliverables, quality standards, communication protocols, and success metrics.

Provide Access to Data, Systems and Staff

Enable access to data, systems, and subject matter experts required for project execution. Friction getting resources stalls progress.

Assign an Internal Project Lead

Appoint an internal project lead to coordinate with the consulting team and streamline communication.

Facilitate End-User Interactions

Include product managers, operations leads, and other end-users to get feedback and drive adoption.

Assemble a Cross-Functional Team

Create a team with business, IT, analytics, and other members to incorporate diverse perspectives.

Empower Fast Decision Making

Enable quick approvals through delegates and limits on red tape that delay consulting work.

Have a Plan for Post-Project Solution Adoption

Consider processes, support models, and hand-off needed to operationalize solutions after the engagement.

Make Knowledge Transfer a Priority

Treat coaching and knowledge transfer as key objectives, not optional items. Document lessons learned.

With the right planning and governance, you can maximize the impact when engaging data science consultants. Focus on synergies to integrate them with your internal team.

Evaluating Data Science Consultancies

When evaluating consultancies, here are the 5 key due diligence checks we recommend:

1. Case Studies and Clientele

Review relevant case studies and client lists to assess experience and results in your industry. Look for demonstrated impact.

2. Client References

Speak to their clients to fact check claims. Ask about work quality, communication, and partnership.

3. Team Quality and Experience

Assess resumes and scientific backgrounds of proposed team members. Meet key personnel. Look for deep expertise.

4. Methodology and Approach

Review their project methodology and delivery processes to ensure alignment. Probe their reasoning.

5. Cultural Fit

Gauge chemistry through extensive discussions. Data science partners become an extension of your team.

Thorough due diligence reduces project risks and ensures a smooth engagement.

Market Size and Growth

The data science consulting market has seen tremendous growth, driven by digital transformation:

  • The global data science consulting market size was valued at $26.7 billion in 2021. It is projected to grow at a CAGR of over 19% from 2022 to 2030 according to Grand View Research.

  • Top segments include IT services, financial services, healthcare, marketing and advertising, automotive, retail, and government.

  • Key factors propelling growth include data proliferation, competitive pressure to leverage AI, and scarcity of internal talent.

  • 80% of enterprises are increasing data science consulting spends according to Deloitte. Shortage of in-house capabilities is the primary driver.

As analytics becomes increasingly critical for competitiveness, reliance on specialist consultants will further accelerate.

Lead Data Science Consultancies

The data science consulting market has a range of players from large companies to boutiques:

IT and Management Consultancies

  • Accenture
  • Deloitte
  • Infosys
  • Wipro
  • TCS
  • IBM
  • PwC
  • McKinsey & Company

Niche Data Science Consultancies

  • Mu Sigma
  • Fractal Analytics
  • Gramener
  • LatentView
  • Tiger Analytics
  • Analytic Partners

Cloud Providers

  • Google Cloud Consulting
  • AWS ProServe
  • Azure Applied AI Services

Boutiques and Independents

  • UST
  • ZS
  • Axtria
  • Bain & Co
  • BCG Gamma

The top consultants have strengths in different industries, technologies, and capabilities. Assess consultants against your specific needs.

Boutiques can provide specialized expertise and partnerships, but may lack scale. Larger firms provide breadth but can be less flexible.

Evaluating Cost vs ROI

Data science consulting delivers compelling ROI but requires meaningful investment:

  • Typical project cost: $250K – $1M+
  • Revenue uplift: 10-100X+ project cost
  • Payback period: < 6 months
  • ROI: $20M+ annually for enterprise engagements

Leading companies generate $20 to $50 million in incremental annual revenue and savings from their analytics programs according to McKinsey.

The high ROI is driven by:

  • Increased sales from improved targeting
  • Reduced churn through personalization
  • Higher yields from predictive manufacturing
  • Lower fraud through detection models
  • Optimized logistics from demand forecasting, and more

Still, the value only manifests through integrating consultants strategically, not just tactically. Balance short-term solutions with long-term capability building.

Key Takeaways

Here are the key points to remember when looking to engage data science consultants:

  • Seek consultants that offer both strategic guidance and hands-on delivery. Assess their technical and business capabilities.

  • Consider consultants when launching new analytics initiatives or needing skills that your current team lacks.

  • Use a structured 5-8 step selection process and validate through client references.

  • Negotiate pricing models that balance flexibility, cost management, and incentives.

  • Budget $250K+ for typical enterprise engagements with 6-12 month durations.

  • Set projects up for success through governance, resourcing, and knowledge transfer.

  • Focus on integrating consultants with internal teams and establishing lasting capabilities.

Leading companies recognize specialists‘ value in accelerating analytics progress. With a thoughtful approach and realistic expectations, you too can drive significant ROI.

We hope this comprehensive guide provides a helpful starting point for your data science consulting journey. Please contact us if we can help with your analytics initiatives. We look forward to partnering with you.