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Choosing the Best Management & Business Consultants

 

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At first sight, this topic might not look like a billion dollar question topic – after all, it is a routine matter to hire a business consultant, not certainly a life and death matter? Well, we consider that choosing the right business consultant is a life-and-death matter – for the life or death of the company concerned.

 

A business hires a consultant either to solve a problem it is facing, or to grow much faster than its current growth. In either case, the wrong choice for consultant can seriously hurt the company’s future prospects.

 

This was the reason we felt it was an apt topic to be discussed at the Billion Dollar Questions site. We will try to provide a number of relevant inputs and resources that enable you to choose the right business consultant for your organization.

 

This page – like all the other pages at BillDoll.com, The Billion Dollar Questions Site - is a work-in-progress and stuff will get added regularly.

 

Key words: Choosing management consultants, evaluation of business consultant, consultant evaluation criteria, characteristics of good business, management and strategy consultants

 

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Choosing the Best Management & Business Consultants

 

Types of Business Consulting Firms

 

  • Large, diversified organizations, such as Accenture and IBM Global Services that offer a range of services, including information technology consulting, in addition to a management consulting practice
  • Management and strategic consulting specialists that offer purely management consulting but are not specialized in any specific industry, such as Bain & Company, Boston Consulting Group, and McKinsey & Company
  • Boutique firms, often quite small, which have focused areas of consulting expertise in specific industries or technologies.

 

Choosing A Consultant

 

There are three aspects to the answer for the question, “How do I choose the best business consultants for my company”.

 

  1. Finding a List of Business Consultants to Evaluate
    1. Directories
    2. Associations
    3. Referrals
  2. Evaluating the List Business Consultants
    1. Prior expertise and success record in related fields - Is the consultant willing to disclose past engagements?. Look into past engagements and contact the consultant's references.
    2. Current industry/domain knowledge
    3. Resources - Does the consultant have access to appropriate business and technical resources? These resources allow the consultant to tap expertise beyond the consultant's knowledge.
    4. Testimonials from relevant companies
    5. Integrity
    6. Passion
    7. Result-orientedness
    8. Price and Pricing Methodology
  1. Negotiating Terms with the Selected Consultant/Consultants
    1. Negotiation of Price

                                                               i.      Fixed Price

                                                             ii.      Price Pegged to Results

                                                            iii.      A blend of the Above

                                                           iv.      Payment on predetermined project milestones or after all deliverables are achieved?

    1. Negotiation on Consulting Methodology
    2. Negotiation for the Duration of Consulting
    3. Negotiation for the Phase after Consulting Assignment is Over

 

Some other aspects to watch out for:

 

  • Buzzword Consultant – Does the consultant / consulting company use too many buzz words? Using buzz words in itself is not a negative, but just make sure the consultant knows the fundamentals of his business and not just the buzz words.
  • Walk-away clause - Is the consultant willing to negotiate a walk-away clause in the contract? A walk-away contract is one that allows both your company as well as the consulting company to terminate the assignment (usually without penalties) in the middle of the contract duration.
  • Appropriate Consultant for the Appropriate Project: You don't necessarily have to appoint (& pay) the "big four" consulting firms for assignments that much smaller and much less costly consulting companies could handle.
  • Cultural fit - Does the consultant answer questions honestly and openly? Also, do you and your colleagues who will be dealing with the consultant/s feel comfortable working with them? Buy-in from important and relevant company colleagues is essential for successful implementation.

 

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Content derived from Wikipedia article on Management Consulting

 

Management Consulting

 

Management consulting (sometimes also called strategy consulting) refers to both the practice of helping companies to improve performance through analysis of existing business problems and development of future plans, as well as to the firms that specialize in this sort of consulting. Management consulting may involve the identification and cross-fertilization of best practices, analytical techniques, change management and coaching skills, technology implementations, strategy development or even the simple advantage of an outsider's perspective. Management consultants generally bring formal frameworks or methodologies to identify problems or suggest more effective or efficient ways of performing business tasks.

 

Management Consulting is becoming more prevalent in non-business related fields as well. As the need for professional and specialized advice grows, other industries such as government, quasi-government and not-for-profit agencies are turning to the same managerial principles that have helped the private sector for years.

 

There is a relatively unclear line between management consulting and other consulting practices, such as Information technology consulting.

 

History

 

Management consulting grew with the rise of management as a unique field of study. The first management consulting firm was Arthur D. Little, founded in the late 1890s by the MIT professor of the same name. Though Arthur D. Little later became a general management consultancy, it originally specialized in technical research. Booz Allen Hamilton was founded by Edwin G. Booz, a graduate of the Kellogg School of Management at Northwestern University, in 1914 as a management consultancy and the first to serve both industry and government clients. The first pure management and strategy consulting company was McKinsey & Company. McKinsey was founded in Chicago during 1926 by James O. McKinsey, but the modern McKinsey was shaped by Marvin Bower, who believed that management consultancies should adhere to the same high professional standards as lawyers and doctors. McKinsey is credited with being the first to hire newly minted MBAs from top schools to staff its projects vs. hiring older industry personnel. Andrew T. Kearney, an original McKinsey partner broke off and started A.T. Kearney in 1937.

 

After World War II, a number of new management consulting firms formed, most notably Boston Consulting Group, founded in 1963, which brought a rigorous analytical approach to the study of management and strategy. Work done at Booz Allen, McKinsey, BCG, and the Harvard Business School during the 1960s and 70s developed the tools and approaches that would define the new field of strategic management, setting the groundwork for many consulting firms to follow. Another major player of more recent fame is Bain & Company, whose innovative focus on shareholder wealth (including its successful private equity business) set it apart from its older brethren. Also significant was the development of consulting arms by both accounting firms (such as Accenture of the now defunct Arthur Andersen) and global IT services companies (such as IBM). Though not as focused on strategy or the executive agenda, these consulting businesses were well-funded and often arrived on client sites in force.

 

The current trend in the market is a clear segmentation of management consulting firms. McKinsey, Bain, and BCG retain their strong strategy focus, with pure strategy houses such as OC&C Strategy Consultants, and Parthenon competing effectively in this high end market. Many other generalist management consultancies such as Accenture are broadening their offering increasing into high volume, lower margin work such as system integration.

 

Current state of the industry

 

Management consulting has grown quickly, with growth rates of the industry exceeding 20% in the 1980s and 1990s. As a business service, consulting remains highly cyclical and linked to overall economic conditions. The consulting industry shrank during the 2001-2003 period, but had been experiencing slowly increasing growth since. In 2004, revenues were up 3% over the previous year, yielding a market size of just under $125 billion.

 

Currently, there are three main types of consulting firms. First, there are large, diversified organizations, such as Accenture and IBM Global Services that offer a range of services, including information technology consulting, in addition to a management consulting practice. Second are the large management and strategic consulting specialists that offer purely management consulting but are not specialized in any specific industry, such as Bain & Company, Boston Consulting Group, and McKinsey & Company. Finally, there are boutique firms, often quite small, which have focused areas of consulting expertise in specific industries or technologies.

 

The rise of internal corporate consulting groups

 

Added to these approaches are corporations that set up their own internal consulting groups, hiring internal management consultants either from within the corporation or from external firms whose employees have tired of the road warrior lifestyle. Corporations such as SunLife, IBM, Fidelity, Siemens, Chevron Texaco, Metlife and Bristol Myers Squibb have found these groups to be particularly helpful. Many of these corporations have interal groups of as many as 25 to 30 full-time consultants.

 

The internal consultant approach is chosen for three reasons. First, the corporation does not want to pay the large fees typically associated with external consulting firms. Second, they want to keep certain corporate information private. Finally, they want a group that more closely works with, and monitors, consulting firm relationships. Often, the internal consultant has less ramp up time on a project due to familiarity with the corporation, and is able to guide a project through to implementation - a step that would be too costly if an external consultant was used.

 

Internal consulting groups are often formed around a number of practice areas. The more common areas are: organizational development, process management, information technology, design services, training and development. There are three potential problems. First, the internal consultant may not bring objectivity to the consulting relationship that an external firm can. Second, when the external consulting industry is strong it is increasingly difficult to find the required high calibre of consultant provided by consulting firms. Finally, when financial times get tough, often the internal consulting group is the first to face layoffs.

 

Despite these problems there is a clear advantage. External consultants may pose more conflicts of interest and bias in favor of one client company over another. This is especially true in economies that are experiencing high degrees of consolidation, which results in industry and product overlap among client companies.

 

Approaches

 

Management consulting has become the primary source for innovation in the practice of management, forming a bridge between academia, firms, and thought leaders in other fields. As a result, management consulting firms use a variety of tools and techniques to approach business problems. See strategic management, operations management, and industrial engineering for more information.

 

Criticism

 

Management consultants are often criticized for overuse of buzzwords, reliance on management fads, and a failure to develop executable plans that can be followed through. A number of highly critical books about management consulting argue that the mismatch between management consulting advice and the ability of business executives to actually create the change suggested results in substantial damages to existing businesses, see, for example Dangerous Company by James O'Shea.

 

Further criticisms include: analysis reports only, junior consultants charging senior rates, reselling similar reports to multiple clients as "custom work", lack of innovation, overbilling for days not worked, speed at cost of quality, unresponsive large firms & lack of (small) client focus, lack of clarity of deliverables in contracts, and more.

 

Related Professional Qualifications

 

Although there is no single professional qualification in business consulting, several qualifications can lead to the field:

 

  • Accountancy qualifications: Chartered Certified Accountant (ACCA), Chartered Accountant (CA), Certified Public Accountant (CPA), Chartered Cost Accountant CCA Designation from AAFM
  • Finance qualifications: Chartered Financial Analyst (CFA)
  • Business qualifications: Master of Business Administration (MBA), Doctor of Business Administration (DBA)

 

Retrieved from http://en.wikipedia.org/wiki/Management_consulting

 

End of Wikipedia content

 

 

Web Resources for Management Consultancy & General Business Resources

 

Global Consulting Industry Directory & Business Resources

 

Management & Business Consultant Directory - Business Consulting Directory at Yahoo, Management Consulting Directory at DMOZ, Association of Management Consulting Firms - AMCF, Institute of Management Consultants, USA, Canadian Association of Management Consultants - CAMC, Institute of Management Consultancy, UK, Institute of Management Consultants, Australia, Management Consultancies Association, UK

 

Consultant ResourcesConsulting Central – Decision Support for Consulting Professionals, McKinsey Quarterly, Consulting Magazine, Management Consulting News, Wharton MBA Consulting Club

 

Strategy & Planning - Strategy + Business, Intelligent Performance – business performance management news, Business Plan Centre, Entrepreneur – starting & growing a small business, All Business – small business resources, Startup Journal – Wall Street Journal for entrepreneurs, Online Women’s Business Center, McKinsey Quarterly, Strategy + Business, Knowledge @ Wharton, MIT Sloan Management Review, Consulting Central, HBS Working Knowledge, Far Eastern Economic Review (FEER), Management Methods, Models & Theories, American Management Association, Management Consulting News

 

Top Management & Strategy Consulting Organizations: McKinsey & Co., Deloitte Consulting, Arthur D. Little, Cap Gemini Ernst & Young, A.T. Kearney, Towers Perrin, Booz Allen Hamilton (BAH), Bain & Co., Monitor Group, Mercer Management Consulting, Gartner, Roland Berger Strategy Consultants, Accenture, Marakon Associates, The Parthenon Group, IBM BCS, L.E.K. Consulting, Boston Consulting Group, Bearing Point, Diamond Cluster International, Charles River Associates, Hewitt Associates, Stern Stewart, NERA Economic Consulting

 

General Industry Reference

 

News & Information - Forbes, Fortune, Business Week, Economist, CNN Money, Wall Street Journal (WSJ), Financial Times, Hoovers, Reuters, Far Eastern Economic Review (FEER), Barrons, Fast Company, Business Wire, PR Newswire, Biz Journals, Yahoo Finance, Investors Business Daily, CNET News, Market Wire – PR News, CEO Express, Fool.com, Standard & Poor’s, Chicago Board Options Exchange (CBOE), FTSE, MarketWatch, Bloomberg, The Street, Red Herring, The Industry Standard, Industry Link, BizWeb Business Guide to the Web, Organisation of American States Foreign Trade Information System, World Economic Forum, International Chamber of Commerce, Global Reporting Initiative, New Economics, Trend Watching, IT Facts, Euro Monitor International, Economist Intelligence Unit, EIU Worldwide Cost of Living, Country Watch, The Economist Group, The Federation of International Trade Associations,, ASEAN Secretariat

 

Product & Services Finders - Thomas Register, Biz Ahead Business Directory, Jayde – the B2B search engine

 

General Business - D&B, Find Articles

 

Government - US Government Federal Business Opportunity, Business.gov – US Government Business Rules & Regulations, US Business, Trade & Economic Information – from US Department of Commerce, United States Patent & Trademark Office

 

Annual Reports - Annual Reports, Public Register’s Annual Reports Service, CAROL World, Annual Report Service, Free EDGAR, Annual Report Resource Centre

 

International Business, Industry, Economic & Trade Data - Economic Departments, Institutes & Research Centres in the World, Economic Time Series Data, Research Papers in Economics, The Institute of International Finance, Economic Strategy Institute, Regional Technology Strategies

 

Business & Management Consulting Glossary / Jargon

 

Mergers & Acquisitions

Alliances & Partnerships

Service Offering

Innovation

Organization Structure

Hierarchy

Assets

Liabilities

Profit & Loss

Balance Sheet

Business Research

Profits

Losses

Revenues

Outsourcing

Core Competency

Strategic alliances

Advertising

Accounting

Financial control

Purchasing / Purchase

Supply Chain

Suppliers Management

Vendors Management

Cost Control

SBU - Strategic Business Unit

Market Segments

Market Segmentation

Business Planning

Entrepreneurs

Value Chain

Competition

Market

Markets

Market Leadership

Implementation

Positioning

Competitiveness

Customer Service

R&D

VAR - Value Added Reseller

Distribution

Price

Pricing

Customer

Customers

Niche

Strategy

Strategies

Strategic

Demand

Supply

Differentiation

Vertical Market / Markets

Vision

Mission Statement

Failure

Marketing

Horizontal Markets

Investors

Shareholders

Data

Consultation

Top Management

CEO

CIO

COO

CTO

CFO

Senior Management, Managers

Organization Chart / Charts

Firm / Firms

Conglomerates

Fortune 500

Fortune 100

Fortune 1000

Productivity

Product Driven

Price Elasticity

Target Segments

Technology

Scenario Analysis

Decision Making

Product Life Cycle

Value Proposition

Business Models

Business Architecture

operational excellence

Business imperatives

Business Process Outsourcing

Capabilities

Mission Statement

Business Groups

Customer relationship Management

Finance & Performance Management

Human Resources

Supply Chain Management

Business Consulting

Technology, Research & Innovation

Solutions Engineering

Solutions Operations

Core business

High-level strategic planning

engineering

life-cycle solutions

bottom-line results

professionals

Value Creation

Global

Sales

Financial management

Intellectual property

Knowledge management

new business opportunities

business intelligence

next generation

 

See Resources for Business Processes across Functions & Industries @ eBPO.in

 

BPO Across Functions - Finance & Accounting (Accounting, Payroll, Tax Accounting, Accounts Payables & Receivables, Order to Cash Cycle, Procure to Pay Cycle, Claims Processing, Travel Claims Processing, Medical Claims Processing, Financial Compliance Management, Financial Auditing, Financial Planning & Analysis), Design & Creative (Literary, Writing and Communication, Translation & Localization, Multimedia & Graphics, Graphics, Animation), Administration & Secretarial (Transcription Services, Data Management, Data Aggregation, Document Management), Customer Support (Tele Support, Online Support), Human Resources (HR Help-desk, Training & Development, Knowledge Management, E-learning, Recruiting Services, Benefits Administration), Sales & Marketing (Advertising & Public Relations, Sales Prospecting, E-marketing, Telemarketing & Telesales, Marketing & Sales Strategy, Market & Consumer Research, Customer Relationship Management, Loyalty Program Support, Order Fulfillment Support, Sales Support, Call Centre, Online Sales Support), E-commerce & E-business (Web Site Management, Hosting & Maintenance, Content Creation & Updation, Web Analytics)

 

BPO Across Industries - Aerospace & Defense, Automobiles, Chemicals, Computers & Internet, Construction, Education, Electrical & Electronics, Electrical, Electronics, Manufacturing & Engineering, Finance & Investment, Banking, Asset Management, Insurance, Investment Banking, Food & Drink, Agriculture, Forestry & Livestock, Government & Society, Events & Hospitality,  Law & Legal, Leisure & Entertainment, Media, Medicine & Healthcare, Metals & Mining, Oil & Gas, Paper & Packaging, Personal Care, Textiles & Apparel, Retailing, Science, Technology & Engineering, Travel & Transportation, Transportation, Distribution & Logistics, Air Transportation, Land Transportation, Railways, Roadways, Water Transportation, Shipping, Travel, Travel Agencies & Tour Operators, Utilities, Energy, Sanitation, Telecommunications

 

 

General Reference

 

Web Portals

 

The following portals provide resources on research, directory, search engine / search engines, yellow pages, classifieds

 

AOL, Yahoo, Google, eBay, YouTube, Yahoo Groups, Wikipedia, CNN, Time, Forbes, Fortune, BBC

 

 

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