Management consulting is referred to the practice of helping businesses to improve their performance, mainly through the analysis of existing organizational challenges as well as competitive environment. It also involves the development of detailed plan of action for improvement. Organizations may seek the consulting services for a number of reasons which includes gaining external advice and access to the consultants’ specialized expertise. Management consultants add value to organizations (including governments and public sector undertakings) by providing them with unique expertise not easily available within the organizations and/or in cases where the organizations were slow to respond to the environment. This 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.
Therefore, the landscape of the management consulting industry is characterized by consultants who are (a) external to the organization; (b) hired on a temporary basis; (c) valued for their specialized experience and expertise that is not easily available within the client organization; and (d) compensated for their advice on improving the organization's performance and educating the client on handling similar problems in the future.
For long, consultants have attracted significant criticism from large corporate houses as well as management scholars. Management consultants are mainly criticized for stating the obvious, overuse of buzzwords and failure to develop plans that are executable by the client. Of late; diversified corporations have employed corporate staff with titles that include “consultant” as full-time exclusive resources. While such internal consultants provide firms with specialized expertise, they would be an integral part of the organization and not necessarily bring in the “outside” perspective that clients most often seek. Three key characteristics of management consulting are: (1) consultants provide support in diagnosing and/or dealing with management problems; (2) such consultants are external to the problem that is being addressed, with no implementation responsibilities; and (3) such support is provided on a temporary basis. Based on these characteristics, they define management consulting as including “any activity that has as its apparent justification the provision of some kind of support in identifying or dealing with management problems, provided by individuals, groups, or organizations that are external to the particular management domain and which are contracted by the management on a temporary basis”.
The significance of management consulting in India can’t be undervalued. In India Management consulting is estimated to be a Rs. 30,000 crore industry, which is growing at a CAGR of 30 percent. Consulting firms are also aware about industry “Best Practices” due to its relationships with several organizations. They also provide services like change management assistance, technology implementation, strategy development, operational improvement services and development of coaching skills.
Types of Consulting Firms
Consulting firms can be broadly classified in two ways as follows
Either Large Consulting Firms – These Medium to Large sized management consultancies offer their services across functions within a wide range of industries.
Boutique firms that have focused areas of consulting expertise in specific industries, functional areas, technologies, or regions of the world OR
Tier 1 – They are mainly into Strategy consulting: Market Entry, Cost Optimization, Growth Strategy, Business Consulting. This includes firms like Mckinsey & Co, Bain & Co., Booz & Co, BCG, AT Kearney etc.
Tier 2 – Tier 2 firms are mainly Industry Focused. Examples include KPMG, Deloitte, E&Y, PWC, Accenture etc.
Tier 3 – Their offerings include Advisory cum outsourcing services. The firms like Wipro, Infosys, TCS, Capegemini, Cognizant etc will fall into this category.
Hiring Trends of Management Consultants in India:
Breaking into top Management Consulting firms is difficult. They usually hire from top B schools and engineering colleges of India like IIT, IIMs. The requirement for specialized knowledge is rising rapidly. Firms are looking for consultants with very specific knowledge in areas like logistics management, knowledge management, data warehousing, multimedia, client-server development, sales force automation, electronic commerce, brand management and value management.
While consulting firms normally hire MBA students, they are now willing to hire students with other prestigious degrees like, Ph.D, lawyers and engineers and put them through business training. McKinsey has a three week mini-MBA course, and reports that only 44 percent of their consultants hold an MBA, while 24 percent have a master’s degree in another field and 22 percent have an M.D. or PhD.
In India, since consulting industry is growing at a CAGR of 30 percent, hiring activities is also expected to rise. Skills required joining Consulting firms: Analytical Skills, Flexible thinking, Communication Skills, Focused Approach and overall business understanding.