The practice of consulting has perhaps been around since the time of early society when advice was sought in circumstances that required decisions to be verified, alternatives evaluated and paths to manage risk and ways to reach desired goals. Ultimately consulting is perhaps reduced down to the act of a service of exchange between a provider and a client whose relationship creates value for both parties in the pursuit of a set of goals.

 

The state of Management Consulting

 

The development of consulting as a profession and as a practice in more recent modern times is perhaps an indication that consulting has become an industry market sector bound by client expectations, a code of practice and an identity of itself and its aims and role in industry.  Yet in reality at a practitioner level this distinction is often less clear in practice and, on occasion, a source of failure in outcomes.  Conversely, many customers of consulting as well as the industry media commentators and analyst advisory already classify and position many types of consultants and consulting services. Some examples of consultancy classifications are given in this table.

 

 

The big strategic Consultancies - Functional Practices, Industry Sector Practices, Business strategy, Performance Management, Innovation Research, Benchmarking, Technology capabilities and solutions consultingMcKinsey,  BCG (Boston Consulting Group), Bain & Co, AT Kearney, Booz Allen Hamilton. PA Consulting

 

The big 4  (audit firms)  - Business strategy, Tax, M&A, Risk Assurance, Performance Management,  IT Transformation, Provider and Client side technology assessment and change managementDeloitte, PwC, Ernst & Young, KPMG

 

The big 5  (Systems Integrators) – IT strategy,  Applications, Infrastructure, Hosting, Outsourcing, Selection and Digital SolutionsTier 1:Accenture, IBM,Capgemini, CSC, HP     Tier 2: Fujitsu, Atos, others  (specialise in industry sectors and offerings, SME support)

OEM and Technology Consultancies -  OEM Hardware and Software, Technology SolutionsE.g. IBM, HP,  Microsoft , Oracle, Cisco, EMC

 

Specialist strategic marketing Consultancies - E.g. Specialist Niche marketing and Sales Advisory and Benchmarking

 

Cloud Provider Ecosystems – Software and Infrastructure vendors hosted on Public and Private cloud platforms. Increasingly moving into Development and added-value Enterprise servicesE.g. Amazon, Google, Microsoft

Industry Analyst Advisors – Industry and Innovation,  Audit assessmentsE.g. Gartner, IDC, Forrester, Ovum

 

Specialist Industry Process ConsultanciesE.g. Specialist Niche Automotive Supply chain Advisory

 

Telecoms Consultancies – Cyber security, Cloud Hosting, Communications, Industry sector services, Group global servicesE.g. BT,  Telefonica, Verizon,

 

Security and Legal Advisory ConsultanciesE.g. Specialist Niche Technology Legal Advisory

 

Enterprise Performance Management ConsultanciesE.g. Accenture Plc, KPMG International, Oracle Corporation, IBM, The Boston Consulting Group, Inc., McKinsey & Company, Ernst & Young, PricewaterhouseCoopers LLP, Deloitte

 

Niche SME  ConsultanciesMany various one person, associate models in a variety of functional and market sectors.

 

Table 1  Examples of key consultancy classifications

 

 

Fads and the market sectors of Consulting Industry

 

The development of the consulting market today has broad classifications of consulting sectorial and consulting functional skills. These include Management consulting, Technology consulting, Technology Services, Outsourcing to Strategy, Marketing, Finance, Operations, HR, IT and M&A to name a few.   Often many of these providers while global may have specific regional and country competitors such as Asia, Americas and European regional strengths. Often many of these services may be available from one large consulting provider or individually from specialist niche consultancy providing differentiated services on specific process and market needs.  Historically many “fads” have come and gone such as Computing Integrated Manufacturing (CIM), Business Process Re-engineering (BPR), Total Quality Management (TQM), Lean, Web 2.0, cloud computing, big data, mobility and social business. These persist today and new trends will follow into the future continually driving brand and market perception.  Matching and aligning consumer and enterprise trends and actual needs with appropriate solutions and services is a central issue for positioning consulting offerings with the demand for knowledge and answers.  In today’s global market the consulting industry boundaries and members are constantly shifting as new hybrid consulting models, new entrants and new business models emerge offering new mix of service offerings, redefining the assessable market size and channels to existing and potential clients and provider go-to-market consulting offerings.

 

Consulting in the real world

 

Consulting by its very nature is a “live” activity dealing with dynamic real time issues in front of current and perspective clients as well as many ancillary activities including marketing, business development, investment portfolio and operations management alignment, staff recruitment and development, innovation and thought leadership, benchmarking, analyst and media briefings as well as bid, sales, negotiation and of course delivery and completion of a range of types of consulting services that maybe Fixed Price, Time & Materials, Outcome based, shared and managed services.   The circumstance often mean that consulting can be analogous to a “war time / peace time footing” where there “are periods of quiet, planning reflection and preparation, followed by intense rapid and dynamic bursts of activity and “moments of truth” that have to perform and achieve quality good outcomes for clients.” While internally and externally these activities are often far from "quite", demanding collaboration and influence to direct and steer often competing consulting agendas, investment priorities, relationships, personalities and services. The reality is there is often not the luxury of time in academic research reflection and evaluation but a strong sense of commercial reality and delivery focus to convert conversations and advice into tangible and intangible benefits and measured outcomes.  The consequences of consulting advice and project deliver can often impact the Client company operating costs and bottomline profit and its very survival.   Consulting reputation, credibility and professionalism in engagement is critical to successful engagement outcomes as much as quality insight and thought leadership.  Contract legal liability, professional indemnity insurance, shared risk and reward investment are all part of consulting where success and failure can have consequences for advisors as well as clients.

 

Development of the Profession in the Consulting Industry

At an academic level at first sight there has been an observance of limited primary research and published papers in leading academic journals on the subject of consulting itself. While this is probably indicative of the way consulting works in “ring fencing” its own knowledge and skills to enable those consultants and consulting services to be differentiated commercially paid for advice and guidance not available to the general public or other competitive providers.  But this may not be the case entirely when viewed more obliquely as many academic research efforts and publications around emerging new business models, organizational change mechanism (socio-material, social-technological) for generative growth and the transforming effects of economic and enterprise commercial performance are widely available in leading journals and reflect the underpinning expertise that often exist in consulting practitioner behavior and practice.    By looking at these academic sources and the wider industry forums, government standards and the plethora of available enterprise practices, a rich and varied landscape of possibilities are open to new and existing consultants embarking on this profession.

 

 

Consulting Practices as Competencies

 

From presentation skills,  writing a proposal , business development , sales skills to managing and delivering a consulting engagement and leading a consulting business. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Definition of Consulting

The definition of consulting covers a very broad scope potentially in any field of social and business activity. Types of consulting can range from general advisory to specific knowledge and insight around subject matter expertise.   How consulting is delivery has also evolved from the personal advisor to a range of business models that combine consulting with additional content and services that may constitute a life-cycle of services. This continues to evolve with the advent of technological communication and knowledge capture and data benchmarks lowering the barriers to access of social and business information and services while raised new barriers in terms of highly specialised skills and new practices such as cyber security that impact on advice, audit and outcomes.

•  Wikipedia definition

• http://en.wikipedia.org/wiki/Management_consulting 

  • Management consulting, the practice of helping organizations to improve their performance, operates primarily through the analysis of existing organizational problems and the development of plans for improvement. Organizations may draw upon the services of management consultants for a number of reasons, including gaining external (and presumably objective) advice and access to the consultants' specialized expertise. (Wikipedia)

• MCA  UK Association of Management Consultants Definition

• http://www.mca.org.uk/

  • The MCA's mission is to promote the value of management consultancy for the economy and society as a whole.

• AMCF  Association of Management Consulting Firms

• http://www.amcf.org/

  • AMCF’s mission is to promote an environment which fosters the success of management consulting firms worldwide and the value they deliver to their clients. Professionalism

The AMCF awards classify consultancy into the following Categories

2014 AMCF Top Global Game-Changers TM

• Change Management

• Customer Engagement

• Developing Markets

• Finance / Risk Management

• Growth Strategies

• Human Capital

• Information Technology

• New and Digital Media

• Operating Model Design

• Operational Performance

• Supply Chain

• Corporate Responsibility / Humanitarian

• Beyond Big Data: Volume, Variety, Velocity and Veracity

• Big Brother Gets Bigger: Regulation, Risks, and Ramifications

• Redistributing Global Power: The Hunt for Natural and Human Resources

• SoMo: The Intersection of Social Media & Mobile Technology

• Another BRIC in the Wall: The Future of Emerging Markets

• Mobile Millennial Mindset: The Workforce of the Future

• Complexity Reduction: Back to Basics

• From Social to Socially Savvy: Quality Over Quantity

 

Origins and drivers of Consultancy

 

A number of drivers have created the demand and market for what is described as management consultancy or some form of consultancy specialism.  Typically in the broad literature in academic and practitioner publications there have been three overarching themes that can be drawn together as the major causes and its present and future  existence as an  Industry

• Knowledge to Innovate and Change

  • The continual evolution of human knowledge driven by new technology and resource research continually creates challenges for existing companies to learn “new tricks” and adapt or introduce new organizational capabilities, processes, products and services.  The impact creates periods of scarcity of new knowledge as well as existing knowledge that have not be present to the current enterprise. ( A termed sometimes cited by IBM for example as “new to you , new to the world” and “”new to you, but not new to the world”) . Addressing these knowledge gaps may  be possible through organic self teaching, or may resort to external knowledge capture or merger and acquisition of enterprise or by use of advisory or delivery style consultancy to fulfil this need.  This area has been popularised by disruptive innovation (Christensen 1997 and 2003) as the breaking of old working paradigms in business models and the introduction of “innovators dilemma” in being able to restructure and rethink new practice and offerings while constrained by the current investment and  resources.

•  Economics, Commerciality and Worth

  • The use of consultancy has been often linked to the economic outlook of the economy in relation to the level of spend on advisory services as a function of available funding.  This  perhaps may be true in part but should be seen in a wider context of the economic return and time to return of new initiatives.  Organic initiatives can be delivered by internal organizational change but there are the many circumstances where the dilemmas of existing costs and restructuring mean that alternative means are needed rapidly.  Consulting can deliver these step changes through acting as a catalyst and conduit to change paths often providing accelerators to enabling faster transition to time to value outcome.  Integral to this economic equation is the trade-off between the commercial intent of the Consulting service, the "value of information" and exchange, and the dual outcome goal of the Client Capability enhancement and performance.
    The terms marketization, servicization and commerciality are all equally important in the balance of directed impartiality or specific declared interests whether the consultancy is not-for-profit or for for financial gains. Philosophically, Consulting is a means to an end and not its own end.

• Social empathy and governance

  • The human condition with sociopolitical  behaviors as well as the cognitive abilities to perceive and understand the world, its threats and opportunities creates a complex set of agendas and human connections.   Being able to facilitate conversations, build high performing teams, provide effective and respecting leadership styles,  create and maintain vision and personal energy to sustain people and the organization through the journal of change are vital characteristics in any transition.  Nothing standards still in the sense personal and business relationships,  markets and governments continue to evolve and change as the interplay of stakeholder, influencers, investors,  observers and many other "actors" play out in the real world.  Consultancy is about being able to grapple with this social and psychological condition both in the skills and in the practice of delivery.  Consultancy is used in many situations that involve some kind of social change that through these conditions, a path of sustainable and positive change is sought.

 

Emerging Consulting Model Trends

 

The Consulting model is under disruption.  

 

There is increasing evidence that the mid-size strategic consulting model is under threat as from above and below.  In relatively recent media writing in the FT and elsewhere there the general scale of large strategic consulting.  This is most visible in the services from McKinsey that has now branched into Digital and IT Capabilities and delivery services that not many years ago would have been a highly surprising strategy to diversify to lower levels of consulting delivery.

What’s driving this is the combination of commodification of common business services and shifting market share being lost by existing Systems Integrators. Firstly, the commodification is seen as part of the solution delivery making selection and advisory less important. Sourcing solutions can be directed to resellers and marketplace models that provide on-demand and custom solutions to fit organizational needs.  Secondly,  a polarization is evident in Advisory firms seeking to differentiate through a purely Business Operating Model perspective above the niche commodity and integrated level service management.  This perspective is potentially under threat as the mirage of a financial and business process perspective is increasingly technologically enabled and underpinned.

• The strategy consultants in search of a strategy-FT.com  August 28  2013     - Consultancy is in a funk as midsized partnerships realise they have to do something to survive  http://www.ft.com/cms/s/0/f15acee6-0f2d-11e3-8e58-00144feabdc0.html#axzz38lA6fdS

 

The rise of Agile over long term consulting

 

The public sector in the UK has gone through waves of love-hate relationship with external consultants.  In recent times with the high costs of failure in high profile cases such as the NHS Digital Patient record system together with the recent economic down turn driving cost savings has led to challenging the basis for whether these kinds of initiatives can be sustained over such a large scale.  Governance process that are not flexible and agile enough to handle near or mid course changes and official Audit processes that seem to come up short in looking backwards more often than towards real steering forward directives. An accusation of "consultants auditing consultants" perhaps but the fact remains that the experience and expertise to guide and challenge real change as a collective experience and through individual teamins and skills remains a core factor of success.  A reactive approach has been the strong adoption of agile short term  project styles rather than "load the front" traditional "get it done while you can".  This rise of agile smaller phased teaming and change does work well in short term rapid development cycles found in many smaller turn cycles often seen in multi-media environments. But this approach may not be suitable for all types of change intervention and this does not change the scenario that overall scale of organizational operating model needs to also evolve and needs mechanisms that can commercially and operationally "keep it on track".   This paradox is often seen by practitioners in the Consulting profession.

 

Consulting-as-a-Service

 

The consulting industry range of services has expanded dramatically.  The fact that advice and guidance is often sourced for a range of skills and services from financial advice to business turnaround, M&A target advice, sales and Marketing, legal and cyber security to engineering and Information technology. These result in a status of "subject matter expertize" either in the near to market delivery and execution excellence or in the medium to longer term vision and future direction of strategies and capabilities.  Consultancy is often the ability to bring this future or present practice insight to the current situation and to contextualize this for the client to be able to understand the reach scenarios that are described in this better condition. Indeed , innovating and transforming or transitioning the client as the "new for old" and the new order can be offered as-a-service that is arbitrage and delivered incrementally and concurrently with the day-to-day business.  Hence consulting becomes in some ways an industrialized process and a brokered orchestration has emerged as a a facade to managing a portfolio of services.

 

Hybrid consultancies

 

Many larger companies typically working across global regions have the capacity and internal demand for their own consultancies and services. The creation of internal IT departments and internal Business analysis consultancy style services are used to develop a capacity for change management, continual improvement and an off set to potentially higher external service costs attributed to a fee based services.  Many organizations use the "best of both worlds" in a hybrid model that address external and internal consulting services in a variable utilization model to match specific types of consulting needs.

Commodification, custom and hybrid services

The rise of ubiquitous internet services and the explosion of mobile devices has driven a new emerging class of commodity IT infrastructure, content and application services. This phenomena has been driven partly by falling performance-cost of computing storage and compute costs and the wide spread availability of low costs smart mobile devices.  Commercialisation of a range of commodity services has been coupled with a push to higher added-value services further up the strategic value chain of an norganization to build and retain commercial returns from the consulting service. The differentiation of consulting is in the knowledge, skills and other competitive advantages that can be brought to bear in the service. Providing custom services can create a differential in the unique offers to the client.  Today there is increasingly the need to address both the standard and the new in the sense that new capabilities are constantly being sought by clients and consultancies to offer and use new improved paths to better outcomes.  Whether is is extended the horizontal portfolio of types of skills and unew services or vertically increasing the scale and reach of those services through partners and platforms is a central question in todays consulting market where the customer is faced with a myriad of opinions and options.

 

New Business Operating models

 

The move to catalog based on-demand services has created a commodification of solutions but this is just one shift in the case of business operating models. A wider perspective is the Business Engineering models emerging collaborative crowd based social models. What is more profound is the direction of change that the explosion of information and analytics is driving a new level of market and consumer engagement. Many industries are seeing new entrants from horizontal competition and through strong vertical integration to build wider end to end service capabilities.   Business Consulting has high stakes in measuring and defining how  the near term competitive landscape may change as a result of the dynamic movements of players in both sides of the market.

 

Blending consultancies and OEMs 

 

There are emerging model of hardware and software providers and new entrants that are changing their offer portfolio to clients.  Information Technology examples include

• Microsoft sees its vision as a Mobile first, Cloud first business. It has been for several years now moving into its own consulting services and cloud data center hosting services to support this vision.  While it does have a large partner ecosystem of providers they also pursue partner cloud and

• IBM have in the last quarter of published results confirmed its strong move into the Software and Services business.

• Amazon Web Services has an interesting situation emerging as they provide enterprise level services to augment their already expanding commodity cloud business.

This transition is not exclusive to IT, many strategic consultancies are also developing a range of blended models to offer an extended mix of insight and actionable services based on an associate and partner model.

 

Innovation in Consulting 

 

Many businesses are now seeing it as critical to reimagining their business in the light of new digital forces and new business models often enabled or disrupting their core existing business.

Consulting is to some extent today part of an innovation movement that seeking to redefine how Business, Technology, People and Markets work and evolve into the future.

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The Consulting profession at its best is at the center of this revolution.