The consulting market: Realities, myths and analysis (Part III)
A major qualitative characteristic of the consulting industry is reputation. Firms in the consulting industry hold on to reputation as an invaluable asset; they guard jealously against their reputation. Reputation forms the basis for determining the best consulting firm by clients, existing employees and new talents.
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In addition to best reputation, stakeholders in the consulting industry consider the best service, best employer and other awards and rankings. Figure 3 presents four distinct rankings and awards; and four distinct key stakeholder groups who influence the determination of awards and rankings in the consulting industry.
Figure 3: Rankings and Awards in the Consulting Industry
Best reputation: This is one of the important metrics in the consulting industry. It focuses on the prestige of consulting firms, with special emphasis on their reputation and image in the market place. Figure 3 indicates rankings in this category are largely based on the input of students and consultants. The contributions of clients and job seekers to this category are relatively minimal.
Best service: This award category centres heavily on the quality of service delivered to clients. Therefore, it comes as no surprise that clients are overwhelmingly the major contributor to the ranking of consulting firms as the best service provider. Consulting firms are ranked based on their service offerings, best practices, timely execution of projects and track record. The contributions of consultants, job seekers and students to the award of best service provider are very minimal.
Best employer: Human resource metrics such as work-life balance, career opportunities, corporate culture, compensation and benefits, among others, form the basis for ranking consulting firms in this category. Consultants and students are the foremost referenced groups in this award category; consultants and students account for majority of the rankings in this category. Best employer rankings are categorised into two:
1. Rankings involving many industries, including management consulting. Examples include The Sunday Times’ “100 Best Companies” and The Great Place to Work’s “Best Work Places.”
1. Rankings held in the consulting industry. An example is the Consulting Magazine’s “Best Firms to Work For.”
Other: Several other organisations and institutions conduct rankings on consulting firms to evaluate the quality of their service delivery. These institutions may rank consultants and staff of consulting firms individually; and conduct separate rankings on different industries. As depicted in Figure 3, rankings in this category are essentially based on the contributions of clients and consultants.
Market analysis of consulting firms
Consultants are noted for often providing continuous trend analysis and forecasts for their clients in other industries, but seldom do same for the consulting industry. However, it is believed the trends affecting other industries have permeated the consulting industry. Studies conducted by experts in the consulting industry revealed some key factors impacting adversely on the activities of consultants. Each of these factors is summarised in the following section.
1. Unstable economic conditions compel corporations to cut-down cost to break-even or derive marginal profits. As a result, more corporations are resorting to use of transactional style and freelance consultants in projects.
Corporations’ engagement of consultants on a full-time basis is very minimal in recent times. Interestingly, corporate executives are more focused on the cost of engaging the services of a consultant than the value the latter could bring to the organisation. Companies in other industries seem to substitute transactional style engagement for long-term professional relationship with consultants. This is often referred to as the Uberisation of consulting.
1. Emergence of companies such as Wikistrat and HourlyNerd in the market is likely to affect organisations’ direct interactions with and maintenance of long-term relationship with professional consultants.
For instance, Wikistrat is credited with accurate prediction of the rise of a separatist movement in Crimea. This movement sought an annexation with Russia.
Wikistrat’s prediction was unequaled by the American Criminal Intelligence Agency (CIA). This feat has enhanced the credibility of the former, and attracted many stakeholders to its website. Today, businesses are more interested in partnering freelance consultants to provide lasting solutions to problems affecting their development and growth. Wikistrat has created a common technological hub where businesses and freelance consultants meet to interact.
The foregoing development has compelled consultants to resort to Wikistrat for immediate employment. The need for frequent and challenging travel by consultants has been limited by Wikistrat and HourlyNerd; many information needed by consultants are readily available on their websites. Consultants can choose from variety of projects on the website of Wikistrat.
1. The advent of improved technology and introduction of sophisticated analytical software to the consulting industry are believed to affect the employment fortunes of consulting professionals. For example, Deloitte and Touche recently introduced the Deloitte Digital to provide innovative solutions to clients on a continuous basis. This notwithstanding, the need for contribution of human experts to the successful resolution of problems cannot be overemphasised.
The foregoing means the services of consultants would continue to be useful to the business community. The ingenuity of consulting experts would be required to effectively analyse and interpret data gathered and churned out by the various software. An amalgamation of technology and human capital is key to the resolution of challenging business problems. — GB
The writer is a (PhD)
Lead Consultant/CEO
Eben Consultancy
Fellow & Council Member, ICEG
Email: [email protected]
Website: www.ebenezerashley.com
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