Why Data Analysts And Engineers Make Great Consultants

research@theseattledataguy.com May 27, 2024 Uncategorized 0

Many data engineers and analysts don’t realize how valuable the knowledge they have is.

They’ve spent hours upon hours learning SQL, Python, how to properly analyze data, build data warehouses, and understand the differences between eight different ETL solutions.

Even what they might think is basic knowledge could be worth $10,000 to $100,000+ for a business. You could help your company avoid picking the wrong solution or give them access to data they haven’t been able to access for years.

You’ll never be compensated for that knowledge in a full-time role (unless you get into big tech).

However, if they decide to start their own analytics consulting business, they could learn to get fairly compensated. In fact, I believe data engineers and analysts make great consultants.

Why?

Because they have worked closely with the business, they understand how to use data to analyze situations, and often already have to be the middle ground between tech and business.

For this article, I wanted to delve deeper into those points and discuss why data engineers and analysts make great consultants and how you can start.

Good Mix of Tech and Business Skills

Whether you’re an analyst or a data engineer, you’ve likely had to work closely with the business and provide advice on what solutions would be best to solve certain problems as well as what data is required to answer their questions.

If you’ve worked with the business side, you know they have a laundry list of requests, and part of your job is to consult them on the most valuable projects they should take on. You’re already consulting as an analyst or data engineer; you’ve just never called it that.

Your ability to guide the business and advise them on the right next steps is a form of consulting. You are already often acting as a data analytics consultant, but you’re not getting paid like one.

Here are several other skills that data engineers and analysts pick up that make them excellent consultants.

Communication skills for translating data insights into actionable recommendations – Often, the business only generally knows what they need and they don’t know what is possible. In turn, a high-level analyst or engineer usually needs to help guide the project to success. They are the ones that take the business requirements and make them into something that can be translated into business processes and end results.
Analytical skills: Data collection, processing, and interpretation – The key word there is interpretation. This is important especially if you’re an analytical consultant who is very niche or skilled in a specific domain because you can both do the analytical work and help translate it. So before the business even looks at the results, you’ve already been able to predict many of their questions because you have them as well.
Technical skills: Programming, database management, and data warehousing – At the end of the day, one of the biggest benefits of being a technical consultant is that you can actually deliver work. You’re not just providing a strategy (although that is very valuable); you can also get into the weeds. Some consultants don’t like the idea because they feel like it makes them more of a contractor. But there are many ways you can operate it so you’re not doing 100% of the work.

Now that you’ve got an idea of why you could make a good data analytics consultant, let’s talk about some of the pros and cons of starting your own consulting company.

The Benefits of Independence in Consulting

The next question should likely be something like, “Why should you become a data consultant?”Now there are many pros and cons to becoming a data consultant. But let’s talk about the benefits of being a consultant first.

Flexibility and autonomy in choosing projects – This is sometimes the biggest reason why data analytics professionals start consulting because now they can start picking their own projects. Maybe you only really like setting up data infrastructure but not maintaining it. You could become an expert at just that. Perhaps you enjoy migrations or working with Databricks or React. That could become your focus. You get to decide what projects you take on and what you don’t.
Ability to work with a diverse range of clients and industries – Some consultants focus on specific sectors whereas others prefer focusing on tools. I have personally worked in Insurance, Finance, Healthcare, Supply Chain, SaaS, and so many more but I am usually solving the same set of problems.
Opportunities for continuous learning and skill development – One of my favorite benefits of consulting is the fact that you’re constantly learning–learning new industries, technologies, etc. When you work for a single company, you generally focus on one set of technologies and never really go away from it (unless you migrate). This can feel limiting. Whereas I’ve worked with dozens of tools and in dozens of industries.
Higher earning potential compared to traditional employment – At the end of the day, top-tier data analytics talent can make far more consulting than they could be working full-time. Most roles I know cap out at around $200k, even when it’s director level whereas really good consultants likely make over $500k. Money shouldn’t be everything because if you dislike the work, it’ll eventually not be enough, but it can be a big reason why people go through the risk of owning their own consulting business vs. just working for someone else.

Challenges and How To Overcome Them

As stated earlier, everything is a trade-off. When you go from being a full-time employee to a consultant, you’re not going to suddenly start making more money than before. In fact, this is why I suggest most people start working on small side projects. That way they can see if they enjoy the challenges they face when being a data analytics consultant vs. a full-time employee.

Here are some of the challenges.

You have to land your own clients – The first problem most new consultants run into is landing clients. Based on my conversations with other consultants, most rely on their network early on and then have to use other options such as marketing, sales, etc.
Managing multiple clients and projects – Now this one is dependent on you. When you first start, your projects won’t be 6-figure ones. But eventually, that should be your goal, to work four to six 6-figure projects a year. This means you might not have to work 2-3 projects at a time.
Strategies for effective time management and project prioritization – If you start managing 3-4 projects at once, that means you will have to make sure you block time and have a schedule that balances deliveries, landing new clients, meetings, etc. So you do need to be on top of your game.
Admin Work – Another smaller issue that can be frustrating is admin work. Invoicing, accounting, etc. This is crucial work, especially if you read my article about losing money as a consultant.

Are You Ready To Become A Data Analytics Consultant?

If you work in data, you’ve got an advantage when it comes to becoming an independent data consultant. You can earn more, take on projects you like, and honestly take on work you’ve probably not thought about as work.

You’ve likely been taking on some level of consulting work anyways. Even though you will face other challenges such as having to find projects, learn how to market and sell, many of these skills are highly transferable. For example, learning how to sell can be a great way to grow to a senior or staff level engineer as you often have to get buy-in.

So you might as well get compensated for consulting and going above and beyond!

If you’re considering it, and you’d like to learn more, you should check out the Technical Freelancer Academy.