CONSULTANCY

Management Consulting

Management consulting, often referred to as business consulting, is defined as “advisory and/or implementation services to the (senior) management of organisations with the aim of improving the effectiveness of their business strategy, organisational performance and operational processes”

The typology used by Consultancy.in defines management consulting as the sum of three service areas. Strategy consulting, the segment that focusses on strategic and board room advisory; operations consulting, which focusses on improving the management of organisations; and HR consulting, a segment that centres around human capital advisory and/or consulting services aimed at improving the results of the HR function.

STRATEGY CONSULTING

Strategy consulting, often referred to as strategy consultancy, strategic advisory or boardroom consulting, is regarded by the majority of consultants as the most 'high-end' and prestigious segment within the professional services industry. A strategy is defined as “a plan with the aim of realising long-term goals," and organisations regularly engage with strategy consultants for support in developing and implementing business strategies. The strategy consulting domain focuses on supporting private sector clients with the development of corporate, organisational or functional strategies and helping public sector organisations and institutions with economic policy.

The market for strategy consulting services consists of eight disciplines: Corporate Strategy, Business Model Transformation, Economic Policy, Mergers & Acquisitions, Organisational Strategy, Functional Strategy, Strategy & Operations, and Digital Strategy.

Corporate strategy, also referred to as strategic management, involves the formulation of enterprise-wide and business unit strategies and goals. Strategy consultants are regularly brought in to support, among others, the design of vision and mission statements, the development of strategic plans, and the setup of implementation roadmaps (which outline activities and resources required to implement the plans). Common examples of strategic advisory projects include the assessment of strategic options, support of business planning processes, and the development of growth agenda’s such as market entry strategies (when companies want to enter new regions or launch new products).

Similar to corporate strategy, Business Model Transformation (BMI) also focuses on the design and development of future-proof strategies, with the key difference being that it spans fundamental changes in how business is conducted, often triggered by major changes in the external environment. Business Model Transformation, in addition, has a wider span than strategy, looking at a range of organisational and operational elements and how they interact to achieve a common goal; such as value propositions, customer segments, cost structures and organisational structures.

The Economic Policy service area involves a range of economic advisory services that support governments and international institutions with policy setting. Most offerings cover fiscal policy; which deals with government actions regarding taxation, budgets and spending, monetary policy; which deals with central banking actions regarding the money supply and interest rates, or government interventions across areas such as the labour market, national ownership, housing and many other areas. Further offerings within the segment include impact assessments (such as a socio-economic benefits study), financial valuation analysis in cases of disputes (economic litigation), economic studies for antitrust cases, or competition investigations and merger proceedings, conducted both for corporates or government authorities.

Strategy consultants are, together with corporate finance advisors, M&A lawyers and investment bankers, also active in the M&A space, with a focus on strategic and commercial activities in the pre-deal phase, although consultancies are also hired in many cases to manage the initial period of the post-merger integration phase. Strategy consulting firms serve companies and investors, for instance, with building business cases to understand the economic drivers of mergers or acquisitions and, further down the line, support clients with due diligence work on potential targets. Other areas in which strategy consultants can play a role in M&A include supporting the establishment of alliances and joint ventures, managing divestitures / carve-outs and facilitating Initial Public Offerings (IPOs).

Organisational Strategy looks at the levers an organisation needs to influence in order to, over time, deliver the strategy of the enterprise. Foremost propositions include designing organisational structures and corporate governance, assessing organisational competitiveness, developing human capital strategies and supporting strategic change management programmes.

Functional Strategy involves the development of strategic plans and roadmaps for organisational functions, which can range from sales & marketing to finance, HR, supply chain, R&D or procurement.

In line with the rise of technology, digital strategies have surfaced to the forefront of strategic work, not just enabling business ambitions, but representing the crux between success and failed strategies more than ever, as a result of which the market for Digital Strategy has shown unprecedented growth of late. The service area brings together elements from strategy and IT Organisation, and spans offerings such as developing a strategy for digital operations, the design of a corporate IT or online strategy, drafting approaches for analytics or cloud transitions, as well as high-level work for technology areas such as architecture, governance and application management.

Operations Consulting

Operations consulting, also referred to as operations management, is defined as advisory and/or implementation services that improve a company's internal operations and performance in the value chain. Operations management consulting projects create more effective client operations by advising on and supporting the implementation of changes to target operating models, functional business processes, management systems, culture and other elements part of the value chain

The market for operations consulting and management services consists of eight disciplines: Organisational Operations, Sales & Marketing, Supply Chain, Sourcing & Procurement, Finance, Business Process Management, Research & Development and Outsourcing.

Organisational Operations focus on improving the performance of all aspects that support the organisation’s structure including; organisation design, governance (across functions and departments), roles and responsibilities, and employee performance. Typical activities relate either to the implementation of organisational strategies such as workforce optimisation/ redesign of employee roles, or are prompted by an event or crisis situation such as a merger or a transition as part of a broader corporate restructuring effort.

From a functional perspective, operations consulting aims at boosting the processes, ways of working and underlying systems across a broad range of areas, of which Sales & Marketing, Supply Chain, Sourcing & Procurement, Finance and Research & Development are the largest areas in terms of size. ‘Sales’ looks into how sales operations can be improved, including boosting channel management, professionalising the level of customer support (i.e. from call centres to specialised helpdesks) and advancing engagement with clients, commonly referred to as customer relationship management (CRM). Other areas that fall under Sales include the optimisation of account & promotion management, Sales & Operations Planning (S&OP), and improving workforce effectiveness. Marketing encompasses, among others, the fields of customer & market research, marketing intelligence, product design & engineering, category management and customer experience & loyalty.

Supply Chain Management (SCM) consultants aim at streamlining a business' supply-side activities across the full value chain, spanning from production to logistics (inbound/outbound) and warehousing to customer delivery. Key offerings include optimising the supply side of Sales & Operations Planning, enhancing the accuracy of planning (e.g. demand planning, forecasting), manufacturing operations improvement, logistics optimisation (e.g. network design, transport modes), inventory management and managing operations risk. The latter area spans all non-compliance-driven efforts (which sit within Financial Advisory) aimed at minimising the risk of supply chain failures to normal business operations. Key activities include the assessment of gross operating risk, the development of operations risk-mitigation plans, scenario modelling, and the development of frameworks to automate responses to operations disruptions.

One of the major areas of growth in Supply Chain Management consulting is sustainability – in light of the growing value attached to corporate social responsibility, companies are investing significantly in boosting the ecological footprint of their operations. Supply chain consultants typically work downstream of research & development (e.g. product development, marketing) and upstream of sales and post-sale activities (e.g. sales, customer service).

The Sourcing & Procurement segment of operations management looks at all procurement activities aimed at finding, evaluating and engaging suppliers for acquiring goods and services. Consultants can, for instance, provide support through improving the sourcing cost and process of raw materials or product / service components, enhance contracting terms & conditions with manufacturers / suppliers, and manage interaction with suppliers (including outsourced contracts), also known as supplier-relationship management. Key offerings include conducting a spend analysis in order to find synergies, improving both the direct as well as indirect procurement operations and supporting clients with transitioning to a greener procurement portfolio.

Services geared at the Finance department, also known as CFO services, focus on a range of financial activities. More strategic offerings include financial planning and target operating model development, which belong to the field of operations consulting. The segment may also include mergers & acquisitions, capital budgeting and asset management, although these services are commonly also part of the Financial Advisory service portfolio of consulting firms.

Implementation services focus on improving the performance of one or a group of financial processes, such as order to cash, procure to pay, cash management, working capital and the financial closing and reporting process. Finance operations are also all about supporting decision-making, and consultants are frequently engaged to improve the flow of relevant information to the appropriate stakeholders (management reporting) through, for instance, data management, business intelligence and financial dashboards. Engagements that seek to raise the maturity of the entire finance organisation, known as finance transformations, represent the largest mandate that consultants can be given in the domain.

Business Process Management (BPM) focuses on improving operational performance by optimising a company's business processes – it is, therefore, also described as process management and/or process improvement. The BPM landscape consists of several streams such as business process design, which sets out to define the ‘to-be’ situation and model process-flow and activities to support the blueprint, and business process re-engineering (BPR), which re-designs the entire process cycle, commonly performed to reduce inefficiencies, complexity, or inefficient legacy ways of working. Continuous improvement techniques aimed at systematically removing waste from processes, such as Lean, Six Sigma or Lean Six Sigma, form another major part of BPM projects, and although they originated and flourished for long in industrial sectors such as automotive and manufacturing, lean principles are applied nowadays across industries, and expert consultants (or certified advisors) are frequently hired to facilitate such transitions.

The Research & Development (R&D) service area is all about the business side of innovation. Consultants are engaged to develop and improve the bottom-line of innovation spending, which ranges from optimising new product development (NPD) processes to boosting portfolio complexity management and improving the efficiency of the R&D organisation, both from a ‘hard’ (e.g. structure / process / system) as well as a ‘soft’ (e.g. human capital) point of view. Product lifecycle management (PLM) is another source of productivity- improvement in the area of innovation. Decisions involving how long to keep a product in a portfolio and when to take a product out of service can be particularly difficult to make internally – consultants are, therefore, frequently brought in to advise around the elimination of no-longer-profitable products and to extend the profitable life of products currently in the market.

Outsourcing advisors tackle all client dilemma’s related to the outsourcing of responsibilities and activities to third parties. While outsourcing focused mainly on the offshoring of labour-intensive activities to low wage countries in its early years, the domain has grown into one of the largest services markets over the past decades, and has become a mainstream line of operating models today. Consultants typically support clients with the design and build of outsourcing blueprints – mainly for back-office processes such as finance & accounting, HR and recruitment, legal, IT infrastructure and applications – and subsequently support the transitions. Of late, there has been a trend towards bringing certain activities back to home- base geographies and advisors are also intensively involved with such projects. Establishing Shared Services is also included as part of the Outsourcing domain by analysts, primarily because it essentially builds on similar skills & expertise (moving processes towards a new owner) and typically may include an outsourcing component if organisations choose for an external party. Prior to establishing a Financial (FSSC) or HR (HRSSC) Shared Service, consultants provide support through, among others, the harmonisation and standardisation of processes, as well the shift towards a common template.

Human resource (HR) consulting, also referred to as human capital advisory or HRM consulting, spans advisory and implementation activities related to the management of an organisation’s human capital and the HR function.

HR consulting services

The market for human resource consulting services consists of eight main disciplines: Human Capital Strategy, Compensation & Benefits, Organisational Change, HR Function, Talent Management, HR Analytics, Learning & Development and HR Technology.

Human capital strategy includes a variety of strategic work in the HR domain, such as defining a corporate culture, organisational design, setting up a people strategy that supports key pillars in the business, as well as the design of HR-related strategies in the area of diversity, recruitment and talent management among others. Compensation & benefits, a segment also known as total rewards, looks at all aspects of employee compensation and benefits from base and variable pay to bonus schemes and other secondary benefits across the entire organisation – from board level to employees on the workfloor. The discipline also includes pensions / retirement consulting, and advisory services tied to health and welfare.

Organisational change encompasses the people side of change, aimed at successfully guiding and embedding changes in organisational structure, ways of working, or cultural changes within an enterprise. Change management stands at the heart of the service area, spanning advisory expertise to tools and interventions, with leadership alignment, stakeholder management, change interventions and cultural management being the main offerings. Organisational change services can be sold as standalone offerings by consultancies. However, they are typically bundled into larger functional transformations to safeguard the people side of change. The HR function area focuses on all activities related to improving the functioning of the human resource department. Offerings vary from developing and implementing an HR target or delivery model, to the implementation of HR systems and technologies, or other HR transformations that boost processes and organisational efficiency.

Talent management encompasses all activities required to recruit, retain and develop talent, as well as establishing the right structure and processes to ensure that professionals can perform optimally. Key propositions include strategic workforce planning – the science to anticipate on present and future human capital needs by matching business goals with HR data – recruitment & retention, workforce effectiveness and performance management. Through the rise of data and new technologies, HR analytics has grown into a full-fledged service area within HR consulting. HR analytics focuses on applying analytic processes to the human capital spectrum, with the key objective of adding insights and value to HR activities.

The learning & development service line, also referred to as training & development, is concerned with activities aimed at improving the performance of individuals and groups. The scope ranges from organisational and competency development across leadership, departments and functions to support the training and education needs of individuals. Learning & development also includes the soft side of development, such as coaching and mentoring, as well as the technological side of training, such as the development and implementation of learning management systems. Lastly, HR technology is the field that specialises in all systems and tools used in the HR department, including large ERP modules by SAP, Oracle or Microsoft, and more niche solutions per functional domain.

IT Consulting

IT consulting, also referred to as technology consulting, relates to services aimed at helping clients with utilising information technology (IT) and digital assets to optimally achieve their business goals. The IT consulting segment spans both advisory and implementation services, but excludes transactional IT activities. 

IT consulting services

The (broader) market for IT consulting services consists of eight main disciplines: IT Strategy, IT Architecture, IT Implementation, ERP services, Systems Integration, Data Analytics, IT Security and Software Management.

IT strategy focuses on strategic IT propositions and IT advisory, offerings which commonly represent the first phase of any IT undertaking. Engagements typically last between six weeks to six months depending on the complexity, with the average lying at two to three months. Examples of projects include defining a corporate IT strategy, setting up a business case for an ERP system or designing a cybersecurity vision – engagements that set the stage for further IT work. IT architecture looks at the IT processes and systems, and defines the technological blueprint that enables business processes. Projects typically last between six to 12 months and architecture services precede any IT implementation or systems integration efforts. Consulting offerings include, among others, defining an enterprise landscape, implementing a service-oriented architecture (SOA), or guiding the outsourcing of architecture processes to an external vendor.

Enterprise Resource Planning (ERP) services are activities that support clients with designing, implementing and/or maintaining ERP systems and modules. Key propositions include ERP package selections, business process redesigns based on an ERP template, and implementations of, for instance, SAP or Oracle products. The systems integration domain looks at how different computing systems and software applications can link together in order to ensure that systems act as a coordinated whole. It often involves ensuring that ERP systems/modules can interact with other, more tailored applications that run in the IT landscape. IT security focuses on risk, security and compliance responsibilities in the IT landscape, while the IT implementation line of business encompasses all services related to the design and implementation of technology-driven projects.

Software management refers to the practice that involves managing and optimising the purchase, deployment, maintenance, utilisation, and disposal of software applications within an organisation. Lastly, data analytics, an upcoming domain, centres around techniques and tools that can turn large amounts of data into valuable information in order to support decision making. Typical propositions in this segment are business intelligence, workforce analytics, customer intelligence, data warehousing (big data) and predictive modelling.

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