CONSULTANCY

MANAGEMENT

What is Management
Consulting?
It is the practice of helping
organizations improve their
performance through analysis of
existing organizational problems and
development of plans for
improvement.
Examples are
HR consultants: specializing in HR
ISO Consultants: specializing in the
process of

Why are management consultants

needed?
Management Consultants are needed
by firms who wish to bring about
some improvement in their
organizations or are facing a problem
and wish to solve it.
Management Consultants are hired
by firms to gain external advice and
the consultants specialized
expertise.

 Since the consultants are exposed to

and have relationships with many
organizations, they are aware of the
best practices in the industry, which
the firm can use.

What do consultants do?

Provide organizational change management
assistance.
Development of coaching skills
Technological implementation
Strategy development skills
Operational improvement services.
Consultants have their own methodology of
identifying problems which form the basis of
recommendations for improvement.

Functions of a Consultant
Providing information to the client
Solving a clients problems
Making a diagnosis which may
necessitate redefinition of the
problem
Making recommendations based on
diagnosis
Assisting with the implementation of
the recommended actions

 Building a consensus and

commitment around the corrective
actions.
Facilitating client learning.
Permanently improving
organizational effectiveness.

Difference between a consultant

and an advisor
Although to a layman, both seem to
be the same, there is a difference
between consultants and advisors.
A consultant is called when the firm
has a clear cut problem in need of a
solution, whereas an advisor is called
when the firm has already thought of
several solutions and is not sure
which one to adopt.

 Consultants are problem solvers.

They excel at developing and selling
ideas and can be great simplifiers.
Advisors are better problem definers
than problem solvers. They often
broaden the view of the clients. They
contribute to strengthening the
clients capacity to solve problems.

 Advisors can provide early warning

about emerging problems which are
often missed by the consultants
because of their sharp focus on
solving the problem at hand.

Why are Consultants Used

1. Achieving Organizational Purposes and
Objectives:
Organizations, when they hire a
consultant, generally have the purpose of
getting help in achieving their business,
social or other objectives.
These goals may be sectoral leadership,
competitive advantage, corporate
excellence, profitability, effectiveness,
growth etc.

 Whatever the purpose may be, but

the fact remains that consulting has
to add value to the client
organization.
At times the job of the consultant
may be to advise client on how to
maintain status quo or even how to
get out of business.

 2. Solving Management and Business

Problems:
The most common purpose of hiring a
consultant is to help managers and
decision makers with problem solving.
In this context, the consultants task is
described as professional assistance in
identifying, diagnosing and solving
problems concerning various areas of
management and business.

 3. Identifying and Seizing new Opportunities:

Consultants are also used to identify new
opportunities .
Consultants are regarded as a source of
valuable information and ideas that can be
turned into a wide range of initiatives like
developing new markets, improving quality,
becoming more useful to customers, finding
new business contacts.

 4. Enhancing Learning:
In the modern concept of consulting,
this dimension is omnipresent.
Many clients turn to consultants not
only to find a solution to a specific
problem, but also to acquire the
consultants special technical
knowledge and the methods used in
doing so.

 5. Implementing Changes:
Consultants are often known as
change agents.
They help client organizations to
understand change, live with change
and make changes needed to survive
and be successful in an environment
where continuous change is the only
constant.

How are Consultants Used?

There are ten principle ways in which consultants are
used:
1. Providing Information: Quite often, more complete
and more relevant information is the only need of a
client to make the right decisions.
The consulting firm may have this information already
available with it, or it may know where to find it.
There is no consulting that does not involve working
with and providing information.
But in providing this information, consultants have to
distinguish between what information can be given
and what cannot be given to a client.

 2. Providing Specialist Resources:

In some cases, expertise is required for a
short term. In other cases, there are
organizational constraints about hiring
experts .
This is where consultants are used .
A special case is interim management. In this
client firms borrow staff members of
consulting firms to occupy a position in their
management hierarchy on a temporary basis.

 3. Establishing business contacts and linkages:

Many clients take the help of consultants to
search for new business contacts,
representatives, agents etc.
The consultants task is to identify one or more
suitable candidate from among the available
alternatives, depending upon the suitability of
the candidate.
The consultant also advises the client on the
conditions of alliance or business deal.

 4. Providing Expert Opinion: The

consultant may be approached to
provide expert opinion in cases
where the client has many
alternatives.
Consultants may also be invited to
act as an expert witness, testifying
witness in lawsuits or arbitrations
calling for specialized knowledge.

 5. Doing Diagnostic Work : Clients

use consultants for a wide range of
diagnostic tasks concerning the
organizations strength and
weakness, potential for
improvement, barriers to change etc.

 6. Developing Action Proposals: The

diagnosis is followed by development
work in any organization.
The consultant may be asked to do
the whole job, share the task with
the client or act as an advisor to the
client who has undertaken to take
the developmental work.

 7. Developing Systems and Methods: The

consultant may be asked to develop systems
and methods for a client in his field of
expertise.
These fields may be organization
development, management information,
business planning, operations scheduling and
control.
Traditionally, consultants develop one or more
of these areas as their field of operation.

 8. Planning and managing organizational Change:

When organizational changes are inevitable and
the client does not have the necessary skills or
expertise to undertake it, they turn to the
consultant for help.
The consultant may provide expertise and advice
both on specific methods and techniques that are
being changed.
They also advise on how to deal with the
interpersonal relations , conflicts, motivation
problems that arise as a result of the change
undertaken.

 9. Training and Developing

Management Staff:
The client may need to be trained in
the new methods and techniques
provided by the consultant.
This may be undertaken as a distinct
client service or in conjunction with
and in support of other services.

 10. Counseling and Coaching: management

consultants can render an excellent service
to managers and entrepreneurs who need
strictly personal feedback on their
leadership style, behavior, work habits.
Personal counseling is necessarily a one to
one relationship based on trust and respect.
It can be informal and should be strictly
confidential.

The Consulting Process

Whenever there is a consulting intervention,
the client and consultant undertake certain
activities required to achieve the desired
goal.
These activities are known as consulting
process.
This relationship has a clear beginning and
a clear end.
Between the beginning and end, the
process can be divided into many phases.

 There are many ways of subdividing the

intervening process. One of them is as
under.
It contains the following phases:
- Entry
- Diagnosis
- Action Planning
- Implementation
- Termination

 Entry:
In this phase, the consultant starts working with
the client.
This is a preparatory and planning phase and
lays the foundation for everything that will
follow.
This phase includes the fist contact, discussions
on what the client would like to achieve, the
clarifications of their respective roles, the
negotiations and agreement of a consulting
contract.

 2. Diagnosis: This phase is an in

depth diagnosis of the problem at
hand.
During this phase, the consultant and
the client cooperate in identifying the
sort of change required, defining in
detail the goals to be achieved, and
assessing the clients performance,
resources, needs and perspectives.

 3. Action Planning: This phase aims at

finding the solution to the problem.
It includes work on one or several
alternatives, the evaluation of alternatives,
the elaboration of plan for implementing
changes, and presentation of proposal to
the client.
Action planning requires imagination and
creativity as well as a systematic approach
in identifying feasible alternatives.

 4. Implementation: This is the phase where

the changes proposed start taking shape.
This is also one of the most testing phases
because this is the phase where things
begin to happen either as planned or
differently.
Unforeseen problems arise and faulty
assumptions are uncovered.
The original design and action plan may
need corrections and rectifications.

 5. Termination: This is the final phase in the

consulting process and includes several activities.
The consultants performance during the
assignment is evaluated by both the client and
the consulting firm.
Final reports are presented and discussed.
Mutual commitments are settled.
If they want to pursue the relationship further,
agreements are drawn up.
Once these activities are completed, the
consulting assignment is terminated.

The Consulting Assignment

A typical consulting assignments scope includes:

- The purpose to be achieved
- the expertise to be provided by the consultant
- the nature and sequence of tasks to be
undertaken by the consultant
- the clients participation in the assignment.
- the resources required
- the timetable
- the price to be paid
- other conditions as appropriate.