Pranshu Sharma, Business Development Manager, WaferWire LLC
In today’s modern era Management consulting is being referred as outsourcing business. It is helping organizations to improve their performance with the help of external expert advice to analyze existing organizational problems, business expansion and development of strategic plans for improvement within the organization. To be specific, consultancies help to improve organizational change, management assistance, skill development, process analysis, technology implementation, and/or operational improvement services. Management consultants often bring their own proprietary methodologies or frameworks to guide the identification of problems and to serve as the basis for recommendations for more effective and efficient ways of performing work tasks.
Birth of Management consulting and Industrial Revolution:
At the latter part of the nineteenth century, during industrial Revolution, when modern factories started its operation, there were institutional and social transformations. Those were the time when “scientific management movement and management consulting” took birth.
McKinsey was the first strategic company to enter the Indian market in the early 90’s. In early stage, they were slow to scale up with about 100 odd consultants in the first 10 years, but using their upscale strategies and marketing management skills, they maintained their growth rate in this competitive market and have now scaled up to 400-500 consultants in India. (Source: consultancy-management-business-scenario-in-India)
Consulting Market in India:
India has been globally recognized for its fast paced Information Technology development over the last decade. The service sector has been growing and contributing more than 50% to the GDP. (Source: consultancy-management-business-scenario-in-India)
The Indian consultancy industry has largest concentration in Delhi and Mumbai, followed by Chennai and Kolkata.
As per, Jim Moffatt Chairman and CEO of Deloitte Consulting LLP - “India is still some years away from being a mature market”. In the Indian market, KPO, VPO and BPO cover all industry sectors of outsourcing market. As a business service, consulting remains highly recurring and linked to overall economic conditions. The consulting industry shrank during the 2001–2003 period, but grew steadily until the 2009 economic downturn. Since then the market has been stabilized.
Combination of lack of diagnostic expertise with lack of innovation/speed of response in clients provides a rich opportunity for consulting firms to add value to their clients through their problem-solving skills. This confirms that Indian market is maturing as per time.
The major strength of Indian consulting organizations include professional competence, low cost structure, diverse capabilities, high adaptability, quick learning capability of Indian consultants and last but least adding value to organizations (including governments and public sector undertakings) by providing expertise readily available.
Therefore, the landscape of the management consulting industry is characterized by consultants who are external to the organization; hired on a temporary basis; valued for their specialized experience and expertise that is not easily available within the client organization; and compensated for their advice on improving the organization's performance and educating (training and development) the client on handling similar problems in the future.
Latest trends in consulting industry, one stop for all solutions, which includes providing manpower where there is shortage of people and - move towards high-end strategy consulting for business growth.
‘Paid’ management consulting services move towards greater acceptance:
Business development in Management Consulting is usually a long-drawn process which resembles selling an intangible product to savvy entrepreneurs. This in fact is tough in this competitive market but nowhere near impossible. Unlike in the developed economic regions, clients prefer a strategic methodology and route to final solution prior to signing any contract.
In India, knowledge and advice are usually linked with a person’s age. The very idea of a freshly-minted graduate giving management advice to people with significantly more work experience is not readily accepted. We still hear anecdotes on how a CEO had given a dressing down to a newly minted consultant, client management has realized the unique fresh perspective, energy and innovative thoughts that younger consultants bring to the table. As the old guard changes at the top level, giving way to a younger management, this change is reflected in the advisory space too.
Perception and challenges:
It is generally opened within the consultancy service provider’s, community; the domestic market in India is a bit different from the international market. Keeping in mind the differences, expectations, data, experience, diversity and openness are the five major challenges consultants usually face. Apart from this, major challenges are lack of proper project management as well as lack of communication with clients.
With the economic slowing down, the nature of the consulting is also changing. Consulting firms now have to work harder to keep clients happy.
- Newer companies are buying Consulting Services.
- Mid cap companies are very loyal. They squeeze you, but they represent a good opportunity.
- Organizations hire consultants to analyze company’s growth and make reports. On the ground changes, streaming distribution, better marketing strategies and efficient supply chain management.
- Clients are now using consultants for specific reasons. In each case, they look for specialized knowledge and skills from the consultant.