CONSULTING

AND
ADVISORY
SERVICERS
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CONSULTING AND ADVISORY

SERVICES
The rise of
Consulting Firms
While academics determined how
strategy was to be taught in
business schools, their insistence
that strategy was idiosyncratic to
each individual firm meant that
growing demand for standardized
strategic frameworks could be only
addressed by Consulting Firms.
This singular thought brought in

CONSULTING AND ADVISORY

SERVICES
The rise of
consulting firms
The Boston Consulting Group
(BCG), founded in 1963, for
example, was a pioneering
consultancy that introduced
influential concepts such as the
experience curve and the
growth-share matrix (Stern
and Stalk 1998).

CONSULTING AND ADVISORY

SERVICES
The rise of
consulting firms
The experience curve concept
held that total costs would
decline by a certain percentage
every
time
cumulative
production doubled.

CONSULTING AND ADVISORY

SERVICES
The rise of
consulting firms
The idea of experience
curve spurred corporations to
expand
aggressively
their
capacity,
focus
on
cost
minimization, and seek higher
demand, often by keen price
competition.
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CONSULTING AND ADVISORY

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The rise of
consulting firms
The growth-share matrix viewed
companies as a portfolio of
businesses and was intended to
help senior managers identity the
cash-flow
requirements
of
different businesses and take
resource
allocation
decisions
about them.
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CONSULTING AND ADVISORY

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The rise of
consulting firms
When using the growth-share
matrix, businesses are grouped in
strategic
businesses
units
(SBUs)and are mapped on a
matrix along two dimensions:
industry growth rate and relative
market share.`
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CONSULTING AND ADVISORY

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The rise of
consulting firms
Improved models of portfolio
planning techniques have been
developed, which address some
of the flaws, one example being
the McKinsey/GE matrix.

CONSULTING AND ADVISORY

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The rise of
consulting firms
Even though such models are
definite improvements over the
BCG matrix, in that they address
a much higher number of relevant
dimensions
of
industry
attractiveness
and
business
strength, they still have some
drawbacks.
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CONSULTING AND ADVISORY

SERVICES
The rise of
consulting firms
They still tend to regard
businesses
as
independent,
downplay diversification as a
strategy for creating value since
they focus on existing businesses,
and undervalue the need to
leverage distinctive competencies
and resources across business
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CONSULTING AND ADVISORY

SERVICES
The rise of
consulting firms

A
significant
alternative
approach is Hamel and Prahalads
view of the corporation as a
portfolio of core competencies as
opposed
to
a
portfolio
of
businesses (Hamel and Prahalad
1994).
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CONSULTING AND ADVISORY

SERVICES
The rise of
consulting firms
Building on the resource-based
view of the firm (Wernerfelt
1984), this view has important
implications
for
investment
decisions that are quite different
from the implications arising from
using portfolio tools such as the
BCG matrix.
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CONSULTING AND ADVISORY

SERVICES
The rise of
consulting firms
The aim shifts from strict
maximization
of
financial
performance of SBUs in the short
term, to longer-term investment
in the nurturing and creation of
core competencies across SBUs
that can enable the company to
be a winner in the future; they
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CONSULTING AND ADVISORY

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The Backdrop
The future is nothing but
realigned priorities
Looking for sustainable
growth
Staying in shape
Preparing for a new
landscape
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CONSULTING AND ADVISORY

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Offerings
Holistic thinking
Multidisciplinary skill
Organization
transformation
Optimization of risks
Restructuring operations
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CONSULTING AND ADVISORY

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Unfolding Consultancy
Management Consulting
Better decisions, reduce costs,
build more effective organizations
and develop appropriate
technology approach.

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CONSULTING AND ADVISORY

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Management
Consulting
Management consultancy is the
creation of value for organizations,
through
the
application
of
knowledge, techniques and assets,
to improve performance. This is
achieved through the rendering of
objective
advice
and/or
the
implementation
of
business
solutions.

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CONSULTING AND ADVISORY

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Risk Consulting
Transforming risk into
advantage.

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CONSULTING AND ADVISORY

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Transactions &
Restructuring
Response to business
opportunities and challenges

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CONSULTING AND ADVISORY

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Management
Risk Consulting

Consulting

Consultin
g&
Advisory
Services

Transaction
Restructuring

&

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CONSULTING AND ADVISORY

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Management
Consulting: A
Look Inside
Growth
Data and Insight
Efficiency
Cost Management
IT
Operations
Shared Chain

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CONSULTING AND ADVISORY

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Management
Consultancy:
Why?
Continuous exposure to
external and internal threats
Business has to achieve
superlative performance
Management Consultancy
provides 360 view of
challenges as against

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CONSULTING AND ADVISORY

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Risk Consulting:
A Look
Inside
Accounting
Development Sector Advisory
Financial Risk Management
Forensic
Governance Risk and
Compliance
Sustainability

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CONSULTING AND ADVISORY

SERVICESWhy?
Riosk Consultancy:
Embedded Risk management
culture
Tougher regulatory regime
Heightened expectations of
Stakeholders
Need for better discipline and
compliance.
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CONSULTING AND ADVISORY

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Risk Consultancy:
Why?
Financial Risks : brutal in
nature
Financial Curve Vs. Invisible
Curves.

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CONSULTING AND ADVISORY

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Risk Consultancy:
Why?
Risks from Suppliers: default in
contacts
Fraud Risk
Risks from Disputes/litigations
Internal Audit office turns into
a mere function
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CONSULTING AND ADVISORY

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Transaction
& Restructure: A
Look Inside
Sales
Due Diligence
Financial Modeling
Integration
Mergers and Acquisitions
Private Equity Advisory
Restructuring Advisory

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CONSULTING AND ADVISORY

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Transaction
& Restructuring:
Why ?
To preserve and create value in
major transactions
M & A Advisory Skill
Value Driver + Risks +
Opportunities = Value Creation
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CONSULTING AND ADVISORY

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Transaction
& Restructuring:
Why ?
Diligence
Financial
Tax
Commercial
Operational
Vendor selection
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CONSULTING AND ADVISORY

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Transaction
& Restructuring:
Why ?
Synergy Assessment
Post-deal support

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CONSULTING AND ADVISORY

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Transaction
& Restructuring:
Why ?
Underperforming Business:
Support & Advice
Improvement in Cash flows
Corporate balance sheet
In short, how to make a business
transaction successful.
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CONSULTING AND ADVISORY

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Consultancy
: Traditional two
streams
Operations Consultants
fine-tuning & tinkering with
internal processes to run them
better
Strategy Consultants
Advice on make-or-break deals
Business Model Innovations

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CONSULTING AND ADVISORY

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Consultancy
:Traditional two
streams
A caricature
Strategy consultants stay in the
back, not paying attention,
throwing paper airplanes. But
they still get the girls and get
rich (Source: The Economist, 9th
Nov,
2013).
Like
so
many
caricatures, this one is cruel but
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CONSULTING AND ADVISORY

Consultancy
:Traditional two
SERVICES
streams

Although in practice their work overlaps, the

two have until now remained distinct
businesses. Strategy firms like McKinsey,
Bain and the Boston Consulting Group hire
from the top universities, are packed with
highly paid partners and whisper their
counsel in CEOs ears.
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CONSULTING AND ADVISORY

Consultancy
:Traditional two
SERVICES
streams

In contrast, operations specialists such as

IBM, Accenture and the Big Four
accounting firms (Deloitte, EY, KPMG and
PWC) employ armies of lower-paid grunts;
and tend to answer to the client firms
finance or tech chiefs.
Operations
Specialists

Strategy
Specialists
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CONSULTING AND ADVISORY

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Consultancy : Blurring the
Distinction?

This year, however, that line has begun to

blur. In January Deloitte became the largest
of the Big Four by scooping up the assets of
Monitor, a strategy firm that had gone bust.
And on October 30th its closest rival, PWC,
said it would buy another strategy firm,
Booz & Company, for a reported $1 billion. If
Boozs partners approve the deal, it will
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CONSULTING AND ADVISORY

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Consultancy
: Blurring the
Distinction
The accountancies push into strategy has been a
decade in the making. During the late-1990s
technology bubble they beefed up their ITconsulting arms. But in 2001 Enron, an energytrading firm, went bust and took its auditor, Arthur
Andersen down with it.
In response, Americas Congress passed the
Sarbanes-Oxley
corporate-governance
reform,
which banned firms from doing systems consulting
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for companies they audited.

CONSULTING AND ADVISORY

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Consultancy
: Blurring the
Distinction
Just as the workload from Sarbanes-Oxley began to
dwindle, the 2008-09 financial crisis hit, causing
consulting revenues started to dip

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CONSULTING AND ADVISORY

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Consultancy
: Blurring
Distinction?
But once the economy recovered, the climate for
the Big Four started to improve.
They began to rush back into consultancy,
encouraged by its high margins and double-digit
annual growth rates at a time when revenue
growth from auditing and tax work had slowed.
Deloitte and PWC began gobbling up operations
consultancies as they sparred for the top spot.
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CONSULTING AND ADVISORY

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Consultancy:
Blurring
Distinction
For years the strategy firms remained beyond the
Big Fours grasp. During the 2000s they had mostly
prospered on their own.
After the financial crisis, however, midsized
strategy consultants hit hard times. Cost-conscious
companies with globalizing businesses wanted
either to hire boutiques with deep knowledge of
their industries, or to benefit from the scale of
generalist firms with offices everywhere.
Too big for some clients and too small for others,
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Monitor went under, and Booz-a spin-off from Booz

CONSULTING AND ADVISORY

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Consultancy
: Blurring
Distinction
Both Booz and PWC say that the two
sides of consulting are converging, and
that more clients want a one-stop shop
that can both devise a strategy and
execute it.
Deloitte
and
Monitor
claim
their
integration is already bearing fruit.
Theres been a very healthy two-way
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CONSULTING AND ADVISORY

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Consultancy
: Blurring
Distinction
On the other hand, Boozs leadership faced a
hard sell to get a deal passed. In 2010 the
companys partners voted down a proposed
merger with A T Kearney, another midsized
strategy firm.
This marriage involved far more risks. A significant
number of Boozs clients would immediately be in
doubt because PWC audits them strategy
consulting for audit clients is banned in many
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countries, and even where it is legal it is frowned

CONSULTING AND ADVISORY

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Consultancy
: Blurring
Distinction
Most important, each of Boozs 300 partners
would have to trade meaningful sway over the
direction of a highly profitable firm for a minuscule
stake in a diversified, lower-margin empire.
If the sale is approved, the test of its success will
come in a few years, after Boozs partners receive
their full payout and can head off. An exodus would
leave PWC empty-handed.
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CONSULTING AND ADVISORY

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Consultancy
: Blurring
Distinction
The Big Four are also running a risk far greater
than the cost of their purchases. A decade ago
they placated regulators by retreating from
advisory work. High-profile deals like the Booz-PWC
tie-up put the conflict of interest between auditing
and consulting back in the spotlight: after it was
announced.
Arthur Levitt, a former head of Americas
Securities and Exchange Commission, warned that
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the firms were slipping back towards old, bad

CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
The rise of alternative professional
services
firms
such
as
Eden
McCallum and Business Talent Group
(BTG),
is
indicative
of
the
modularization story.
These firms assemble leaner project
teams of freelance consultants
(mostly midlevel and senior alumni
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
They can achieve these economies
in large part because they do not
carry the fixed costs of unstaffed
time, expensive downtown real
estate, recruiting and training.
The have also thus far chosen to
rely on modular providers of
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
Although these alternative firms
may not be able to deliver the entire
value proposition of traditional firms,
they do have certain advantages, as
Harvard Business School researcher
Heidi Gardner has learned through
her close study of Eden McCallum.
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
Their project teams are generally
staffed with more experienced
consultants who can bring a greater
degree of pragmatism and candor to
the engagement, and their model
assumes much more client control
over the approach and outcome.
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
These attributes are particularly
compelling when projects are better
defined and the value at risk is not
great enough to justify the price of a
prestigious consultancy.
BTGs CEO, Jody Miller, puts it,
Democratization and access to data
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
Eden McCallum and BTG are
growing quickly and zipping up
market. While its fair to question
whether they will need to take on
some of the cost structure of
incumbents as they expand, their
steady growth suggests that theyve
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
Eden McCallum launched in London
in 2000 with a focus on smaller
clients not traditionally served by the
big firms. Today its client list includes
Tesco, GSK, Llyods and Whitbread,
among
many
other
leading
companies. In addition, some of its
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
Modularization has also fostered
data-and
analytics-enabled
consulting, or what Danier Krauses, a
research director at Gartner, calls,
asset-based consulting, of which
McKinsey solutions is an example.
This trend involves the packaging of
ideas,
processes,
frameworks,
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
The amount of human intervention
and customization varies, but in
general its less than what the
traditional consulting model requires,
meaning lower expenses spread out
over a longer period of time (usually
through a subscription or licensebased fee).
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CONSULTING AND ADVISORY

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Consultancy
: Towards
Modularisation
This approach is most pertinent for
consulting jobs that have been
routinized-that is, the process for
uncovering a solution is well-known
and the scope of the solution is fairly
well defined.
Often these jobs must be repeated
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CONSULTING AND ADVISORY

Consultancy
: Towards
SERVICES
Modularisation

For example, determining the pricing

strategy for a portfolio of products is
no small feat, but experienced
consultants well understand what
analytics are needed. The impact of
such projects, which involve copious
amounts of data, can erode quickly as
circumstances change; the analysis
must be updated constantly. In such
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CONSULTING AND ADVISORY

Consultancy
: Towards
SERVICES
Modularisation

Scores of start-ups and some

incumbents are also exploring the
possibility
of
using
predictive
technology and big data analytics to
deliver value far faster than any
traditional consulting team ever
could. One example is Narrative
Science,
which
uses
artificial
intelligence
algorithms
to
run
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CONSULTING AND ADVISORY

Consultancy
: Towards
SERVICES
Modularisation

Similar big data firms are growing

explosively, fueled by private equity
and venture capital eager to jump
into the high-demand, high margin
market
for
such
productized
professional services.
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CONSULTING AND ADVISORY

Consultancy
: Towards
SERVICES
Modularisation

Only a limited number of consulting

jobs can currently be productized, but
that will change as consultants
develop new intellectual property.
New IP leads to new tool kits and
frameworks, which in turn lead to
further automation and technology
products. We expect that as artificial
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References:
1. Management Consulting in Practice,
Fiona. C & Paul May
2. Strategic Moves, The Economist,
Nov, 2013
3. Consulting
on
the
cusp
Of
Disruption, Clayton M.C., Dina W
and Derek V.B. October, 2013
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THANK
YOU
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