Transcript 02raj The Consulting Industry

Adapted from:
Type
Dr.
Joe
author
O’Mahoney
names and
hereCalvert Markham
O’Mahoney and Markham:
Management Consultancy, 2nd edition
Chapter 2: The
Consulting Industry
© Oxford University Press, 2013. All rights reserved.
Chapter Objectives
You will learn:
• What management consultancy is
• Why management consultancy exists
• The history of the consulting industry
• The institutions of the industry
• Variations in consultancy around the world
O’Mahoney and Markham: Management Consultancy, 2nd edition
2.1 The basics of consulting
O’Mahoney and Markham: Management Consultancy, 2nd edition
1. What is consulting / management consultancy?
1.
What is consulting / management consultancy?
https://www.youtube.com/watch?v=3wPeND2gvqc
Seven keys to successful consulting
https://www.youtube.com/watch?v=9zU2Q654vtQ
What are the main skills of a good consultant?
What makes a great consultant?
https://www.youtube.com/watch?v=oxFK6lQLGxE&list=PL1u9bQdmE5EEeh
What is management consultancy?
“The creation of value for organisations, through
the application of knowledge, techniques and
assets, to improve business performance.
This is achieved though the rendering of
objective advice and/or the implementation of
business solution” (MCA 2009)
• Identifying a problem
• Researching and recommending a solution
• Helping implement that solution
O’Mahoney and Markham: Management Consultancy, 2nd edition
Background
Touch, Deloitte
Arthur D Little 1886
Booz
McKinsey
Kearney
Pure strategy consultancies:
McKinsey
Bain
Defining the boundaries of consulting
O’Mahoney and Markham: Management Consultancy, 2nd edition
Advisory, tax and audit
The history of consulting
• The industrial revolution onwards
• Consultants 1990 – 2010
– Growth 1990 – 2000
– The dotcom crash
– The credit crunch
O’Mahoney and Markham: Management Consultancy, 2nd edition
The growth of consultancy
O’Mahoney and Markham: Management Consultancy, 2nd edition
The impact of the credit crunch
O’Mahoney and Markham: Management Consultancy, 2nd edition
Recent trends affecting consultancies
• Personalised vs. commodified strategies
• The IT market and outsourcing
• Sophisticated clients
• From partnerships to public companies
O’Mahoney and Markham: Management Consultancy, 2nd edition
Personalised vs. Commodified strategies
O’Mahoney and Markham: Management Consultancy, 2nd edition
2.2 The institutions of
consultancy
O’Mahoney and Markham: Management Consultancy, 2nd edition
The institutions of consultancy
• Institutional weakness in consultancy?
• Professional institutes
• Trade associations
• Procurement institutions
O’Mahoney and Markham: Management Consultancy, 2nd edition
2.3 Why do consultancies exist?
O’Mahoney and Markham: Management Consultancy, 2nd edition
2.3 Why do companies buy management consultancy?
Why do consultancies exist?
• They do things clients cannot
• Transaction cost economics
• Economic development and specialisation
• Political and economic ideologies
• Government institutions
• Labour markets
• Legitimation and identity
O’Mahoney and Markham: Management Consultancy, 2nd edition
In House vs. External Costs
O’Mahoney and Markham: Management Consultancy, 2nd edition
2.4 International perspectives
O’Mahoney and Markham: Management Consultancy, 2nd edition
International Markets
• North America
• Europe
• Asia
• Middle East
O’Mahoney and Markham: Management Consultancy, 2nd edition
Global share of consulting revenues
O’Mahoney and Markham: Management Consultancy, 2nd edition
Global share of consulting revenues
O’Mahoney and Markham: Management Consultancy, 2nd edition
Global share of consulting revenues
O’Mahoney and Markham: Management Consultancy, 2nd edition
Global share of consulting revenues
O’Mahoney and Markham: Management Consultancy, 2nd edition
Consulting humour
The Consultants
https://www.youtube.com/watch?v=9KtqGhoddF4
Summary
O’Mahoney and Markham: Management Consultancy, 2nd edition
Summary
This chapter has shown:
• How consultancies expanded on the back of a growing industrial
sector that required management expertise.
• That the industry has changed in response to economic crises,
sophisticated clients, and the development of IT and outsourcing
businesses.
• That there are varied and competing explanations for
understanding why consultancies exist.
• How different international regions create different markets for
consultancies.
O’Mahoney and Markham: Management Consultancy, 2nd edition