Types of Management

Consulting

Prof. Samar K. Datta

Adjunct Faculty, IIM, Lucknow &
Retired Faculty, IIM, Ahmedabad
skdatta.iima@gmail.com
Session-8, July 10, 2017
 Overview
Why studying types
Consulting depends on business models of
consulting firms Hybrid vs. pure, Niche vs.
generalist, Small vs. large, Body-shopping, Internal
consultancy, Contractors, Interim manager
Categorization by service type Strategy, IT
consultancy, Outsourcing service, Generalist/Change
management consultancy, Process consulting,
TQM/Lean, Culture change, HR consulting, Operations
consulting, Programming/Project management
Consulting by sectors
 Why studying consultancy
types
To know about the market together
with its various components, and the
trends therein

To find out where you fit the best

How to position or re-position yourself

with changing times
 Business models Hybrid vs.
pure
Pure consultancies focus solely on consultancy work e.g.,
McKinsey, Bain: oldest, most respected, trusted form, as they
have nothing else to sell, but they dont have any back-up
business to support then in downturn. Pure strategy
consultants thus taking up implementation work.
Hybrid firm add consultancy as supplementary source of
income to complement their other works e.g., KPMG,
Deloitte
Companies like IBM, PWC, besides their core functions, cross-
sell consultancy to clients
Conflict of interest in hybrid audit firms audit insights may
induce sale of consultancy service; may be induced to sign off
unsuitable accounts
 Business models Niche vs.
Generalist

Generalists (generally large) offer many

services e.g., Accenture, with flexible
resources, thus quickly hedging against
downturns.
Niche consultancies small, more

experienced and specialized with loose

personalized networks. Often their
dream ticket is to be attractive and
taken over by a large firm, resulting in
large pay-outs
 Business models small vs.
large consultancies
98% are small & medium units employing
78% consultants, while 50% revenue goes to
large ones =>per head income much smaller
Large ones foster strong CEO relationship
across globe=> virtual monopoly power
Smaller local ones based on personal contacts,
credibility & repute find it difficult to expand &
survive
Clients enjoy certain advantages vis--vis
smaller and local ones with shared culture &
language
 Business models Body-
shopping & internal consultancy
Employment agencies selling bodies to clients as
contractors e.g., Indian IT workers, who come with
specific skill-set.
Though such external contractors confer strong
advantages to clients, this isnt true of those people.
Experienced, senior people are also hired ad hoc as
interim managers to manage rather than as
consultants.
Small team of specialists do repeated works as
internal consultants to minimize cost of hiring,
though very difficult to get skilled internal
consultants, who often have precarious existence
 Types of consultancy
service
Main categories: Strategy consulting, IT
consulting, Outsourcing, General consulting
Strategy is sexiest form attracting brightest
people with strong brands concerned with the
strategy (where to position), and the
strategic plan (how to get there).
Features: 1. Strong relation with banks and
clients; 2. Setting long-term direction of client
companies; 3. Often used to lever follow-on
consulting assignments
 What do strategy
consultants do?
Use state of the art (e.g., in-depth statistical)
tools to analyze clients strategic position
(markets, competitors, consumer trends) to do a
basic strategic audit through simplification of
uncertainties & complexities & to bring out
companys weak & vulnerable points
Identify changing markets, technologies,
environments to seek opportunities
Explore discrete alternatives thro scenario
planning to generate options and choose the best
 IT Consulting
Identify competitive advantage for business by
discovering and aligning new technologies to
enhance business capabilities.
IT consulting isnt about IT per se its about
business:
How to grow e.g., thro e-business, sales analysis
How to cut costs, e.g., thro outsourcing
How to improve services e.g., thro business intelligence
How to achieve faster communication, e.g., thro e-
marketing, mobile networking
How to integrate companies, e.g., thro supply chain
management, system integration
 Technology as Business
Enabler
Technology Key enabler
Micro-processor High speed data processing

Databases Storage & retrieval of large data fields

Digital media Cheap transportation & reproduction of

audio/video
Internet Rapid communication of information
Mobile phones New distribution channel even in remote areas

RFID Cheap remote monitoring

Artificial Enabling machines to use judgment accurately
 Generalist / Change
Management Consultancy
Usually concerned with organizational change of
some form
Communication & flexibility are most priced skills
Handling
BPR

Quality improvement / Lean

Culture change

HRM

Operations management

Program/project management
 Consulting by sector
Sector % Consultants
Banking & capital markets 18
Public sector 12
Energy, natural resource & utilities 11
Telecom & high tech 9
Other manufacturing & construction 8
Consumer products 7
Insurance 6
Retail & distribution, Transportation, Automotive, 4 each
Pharma & biotech, Other services
Healthcare (public & private), Other financial services 3 each
Media & entertainment 2
Others 1
Thanks