The business consulting market in India is growing at a rapid pace as it is projected to rise over $12 billion mark by the end of the year 2018. The management consulting segment contributes nearly $1.5 billion to the overall revenue of the business consulting industry. After maintaining a consistent growth rate of 6.75% for a couple of years, the industry is now at the onset of major disruption, which will make it one of the fast-pacing industries in India. The digitalization, emerging market trends, and market-liberalization schemes and policies introduced by the Government of India back in 2014 are still wheeling the industry.
The organizations are opting for cutting-edge technologies like AI, Natural Language Processing, and IoT to digitally optimize their existing business operations as well as design and develop new innovative products. For this, the startups, as well as established firms, are seeking expert advice from external advisory firms armed with the tech-savvy workforce. With the simpler norms and procedures to enter into the market for MNCs, local advisory firms are leveraging the opportunity to assist international brands in positing themselves into the Indian market. However, the Indian market is full of ups and downs for which the consulting firm and its client have to stay prepared in advance:
Digital Transformation and Automation
The introduction of the latest advents in technology and digitization is leading to more tech-oriented consulting work for consulting firms. With the continual development of technology, the needs of businesses keep on changing. Be it healthcare or telecommunications, technology is greatly impacting how organizations work. Where startups are adopting digital technologies for bringing innovative services to its clientele, the well-established businesses are switching to AI, Robotics, and Machine-Learning technology for transforming their business culture and bring agility into their organizations. For serving the counseling organizations, the consultancy firms first have to adopt the disruptive change themselves and train their workforce enabling them to provide quick, profitable, and smart solutions to the clients. AI and automation significantly boost the productivity of the consultants and the customer experience.
For example, with the Robotic Process Automation Devices, the consultants can keep the mundane admin activities like creating invoices, matching payments with the correct invoice, keeping daily records. With AI-powered systems, they can make better strategic and data-driven decisions and thus, propose result-oriented solutions. Usage of AI-like technologies can enhance the firm’s business processes as well as bring innovation to the services promising them the higher growth. But, the budget, implementation, and training issues will be a great challenge for the consultancies.
Gig economy or open talent economy reshapes the way how business works. Because on-demand talent costs cheaper than a traditional counterpart and is specifically hired for working on a specific project, the organizations, especially the consulting firms are embracing the system of gig economy. For consulting firms, it is one of the best ways to tap on the right talent specialized in a particular area bringing to their clients the much-needed skill set and experience. However, quality of work, immediate availability, the efficiency of the non-permanent staff is a concern for the HR managers.
The revenue generation for the consulting firms depends on the strategies and services developed by the consultants in close interaction and collaboration with the clients. They might even require field-tests for which many on-demand or freelance employees are not ready. Also, the consulting firms have started going digital with intuitive platforms and software for which they have to pay a hefty subscription amount. Misuse or exploitation of such paid tools and software and the manipulation with data meant to be kept confidential is a threat for the consulting firms. Unlike traditional employees, the consulting firms have to face a tough time while grooming the flexible workforce and encouraging them to take a proactive approach to project completion.
Performance-based Billing System
Moreover, the consulting industry has also witnessed the emergence of fees based on outcomes or performance-based billing. In such a pricing system, the work hours of the consultant are not considered at the time of billing, instead, to which extent does the consultant achieve the objectives and targets given by the client matters. Not only such pricing style saves the client from paying extra bucks to the consulting firms based on the lengthy hours taken by the sluggish consultants, but also provides the consultant firms a benchmark to attain in order to prove their worth. However, the small-scale consulting firms lag behind when it comes to implementation of this performance-based billing system. Many a time, the client does not agree to change the tentative amount proposed to him earlier after the consultant achieves success. The effective implementation of the performance-based billing totally depends on the sophistication of both consulting firm and the clients entering into the contract.
Moreover, one of the biggest nightmares the consulting firms have is by the time a consultant prepares a research report or any strategic plan for the client after collecting data, analyzing it, and pilot testing, those trends and issues become outdated and are replaced with the new emerging disruptive forces. Such vulnerabilities affect the revenues of small-scale consulting firms which do not have an easy access to Big Data, Data Analytics, Cloud, and other cognitive technologies. However, the consulting giants who are the early adopters of dynamic next-gen technology dominate the market leveraging the relevant insights, automation devices, and scalable data gathering. They are better able to advise clients on the seamless implementation of disruptive technology as they themselves harness the potential.
About the Author
Lalit Khanna – Founder & Managing Director, SL Consultants
A dynamic leader with over 23 years of extensive cross-functional experience with some of the most trusted global brands such as SL Consultants, Max New York Life Insurance, Onida, Hindustan Unilever, Thomson, and Konka. Being the Founder and the Managing Director of SL Consultants, Khanna is responsible for all the core functionalities of the company worldwide.
He holds P.G Diploma in Sales & Marketing from NIS (a division of NIIT) and a Certificate in Enterprise Management from Indian Institute of Technology (IIT), Delhi. During the past 23-years in the corporate world, he made splendid efforts for the growth and success of both the organizations and people with his exceptional leadership & managerial skills in Strategic Management, Human Resource Management, 360-degree Marketing, Resource Optimization, and Capacity Management.