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