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25 September 2015 |
Consultants can help to examine, diagnose and provide remedies for client issues such as those mentioned above. Descriptions of the role of consultants usually refer to the provision of "innovative end-to-end solutions", collaboration with clients to "turn strategy into reality" and "create or sustain a competitive edge" and overall, to "add value". However, what is it that broad statements such as these actually encapsulate in practice? This section is designed to provide an overview of the types of client challenges consultants may face and the types of solutions that consultants may propose and execute to tackle these challenges.
Clients may have no idea as to the root of their problems. Where they do understand issues, they may need assistance with solving them. Clients may have clear aims and objectives in mind, but lack the knowledge or tools to achieve them. Clients may be unsure of the best way to allocate budgets or resources. Sometimes they face problems of a completely different nature, be it fall in profitability, increased competition from new market entrants or low staff morale. This is where consultants come into play.
Consultants with different specialisms may work together to serve the same client in order to help that client to achieve its overall goal(s). For instance, if a client wants to increase profitability, this may involve technological and operational change to reduce costs, in addition to detailed industry and competitor analysis to enhance revenue performance. Below are some examples of the types of projects that consultants undertake. In each case, consultants may see the project through from the development and implementation stages, right through to facilitating successful adaptation to internal change (including training personnel and working to mitigate issues as and when they arise).
Consultants are expected to be able to view the big picture of an organisation and understand how all its different parts fit together. Consultants must develop both an in-depth knowledge of the field in which a company operates and demonstrate sensitivity to that company"s particular needs. Consultants must frequently ask direct, carefully considered and relevant questions from the outset to gain a strong insight into the company and the problems it is facing. Consultants must then be able to process a huge amount of data and distil the information gathered in a clear, concise and easily digestible manner when drafting proposals and presenting.
Consultants spend a lot of their time conducting market research on behalf of clients and engaging in due diligence, analysing their findings (typically through the use of Excel models), putting together presentations (PowerPoint can be key), then delivering presentations to clients. Presentations usually involve consultants answering questions relating to their findings (or agreeing to conduct subsequent research in order to answer the questions).
Consultants typically undertake impartial, in-depth assessments of a client"s business (or the relevant area of a client"s business) in order to deliver informed, contextualised proposals that relate to the clients needs or aims. Many interdependent elements can determine the success of companies and as such, consultants may have to take into account a multitude of factors when conducting research. These factors include a client"s: financial performance and tangible resources; its competitors, market share, market position and the industries in which it operates; its operational structure and effectiveness; its human resources (including employee turnover) and culture; its customers and suppliers; its shortcomings; its competitive advantage; and its achievements. Assessment of these elements can in turn determine the company"s prospects of achieving its desired aims and objectives. Accumulating feedback from the client"s stakeholders may provide an invaluable insight into many of the above factors.
Some firms and industries require consultants to travel extensively (depending on their experience) both domestically (i.e. to the offices of domestic clients) and internationally (i.e. to work closely with colleagues in international offices or international clients). Many consultants may also be required to work in house for a particular client for extended periods of time.
There are many different types of consulting firms and candidates must therefore give ample thought to the type of firms that would best suit their interests and personal development.
The "Big 5" includes Accenture, Deloitte Consulting, Ernst & Young, KPMG and PwC. For these firms, the core business had traditionally been the provision of compliance-based services such as accounting, audit and tax. However, over time they have developed highly profitable corporate consulting divisions that run alongside their compliance-based divisions. Their involvement in all these business areas is a source of concern for regulators, as it gives rise to the potential for conflicts of interest arising. Some industry experts thus argue that for these reasons, we may see Big 5 firms exiting the consulting business in the future. The Big 5 generally work with the largest companies on complicated, international projects. They typically have in place well developed training programs and a well-defined career path and offer their employees some of the most challenging and interesting work.
These typically focus on providing high quality, cutting-edge strategy and operations advice to high-ranking executives from the world"s largest corporations. They attract graduates from top universities and MBA programs across the world and tend to offer higher starting salaries. The industry elite is comprised of firms such as McKinsey & Company, Boston Consulting Group and Bain & Co.
Some consultancy firms may have practices that are narrower than the larger firms, but provide specialist expertise relating to the particular industries upon which they focus. As these firms are smaller, employees may be afforded additional responsibility and the focus on specialising in niche areas indicates the work received will still be complex and interesting. However, the range of different types of work and clients may differ. Examples of boutique firms include: OC&C Strategy Consultants, Roland Berger Strategy Consultants and Oliver Wyman.
Consulting divisions of companies
Corporations may have internal consulting divisions that focus upon the products or services offered by the company as a whole. Again, these types of firms tend to have well-developed training programmes and career paths. For example, BP (British Petroleum) has a "strategy" division, which is essentially an internal consulting team that handles the same types of problems/challenges that dedicated external consulting firms would otherwise cover. Having an internal consulting team can enable corporations to significantly limit the costs of formulating/implementing new strategies. However, these corporations may still engage external consultants at times as dedicated consultancy firms may be able to offer a fresh perspective or may specialise in areas in which the corporation"s internal team has less experience.