Amazement! That’s the word very appropriate for Consultants Industries today, the way they have played an important role in the development of the Indian business sector. In the past several years, the Consultants Industry has not only grown in size, stature and global reach, but it has also gone through several cycles of professionalization, making it one of the most developed fields within the professional services industry. Consultants are more than giving advice; it’s such a highly extensive, multi-sourcing growing field with experts having wide knowledge of a particular subject, which play a crucial role in helping organizations to embark on the path of success. Consultants render services spanning from recommendations for impractical data and poorly implemented processes in the Finance sector to Healthcare consultancy to deliver better value for patients, fuel innovation and reduce the cost and complexity of operating systems.
It was in the 90s, that McKinsey first brought the consulting strategy in India, setting up an office in Delhi. The growth was initially quite slow and in a decade, they were only able to bring in 100 odd consultants. However, that escalated very quickly in the next decade and today, in India, Consulting companies are offering services in Strategy/Management, Information Technology, and Process & Operations sectors. Other sectors include, Human Resource Consultants, Public Relations Consultants, Marketing Consultants, Legal Consultants, Financial Consultants, Social Media Consultants, and so on. Today, major players in Consultants Industry in India are McKinsey & Company, The Boston Consulting Group, A.T. Kearney, BAIN & Company. Some home grown big names are Tata Consultancy Services, Oracle Financial Services Software, Wipro Technologies, HCL, etc.
If we take a look in the past, consultants as a profession or formal business didn’t formally come into being until the late 19th century. Before that, the biblical kings had prophets and the Greeks had their oracles, Mauryan Emperors Chandragupta had Chanakya, and Akbar had Birbal. But, consultants have taken institutional shape only around the Industrial Revolution.
Today, Modern era organizations now face intense competition, demanding customers, product proliferation and greater exposure to the volatility of the global economy. In this changing scenario, business leaders have to constantly look for new sources of competitive advantage to win in their markets. This change in the market puts tremendous pressure on consultants to bring the best of their field.
The need to move ahead in the competitive structure and gain optimum market share in today’s highly competitive markets, has made companies across the world opt for third-party consulting and advisory services. This is making consulting an indispensable function for companies these days. The success for most companies lies in the fact that, each company provides a differentiating factor in order to achieve a competitive edge over their rivals/competitors. And specifically in the Indian market, this cannot be attained without the proper knowledge of market trends and behavior. Also, this success can be achieved only by implementing the right strategies from time to time and by taking pertinent decisions considering the market scenarios they cater to have prompted companies to subscribe to the products and services offered by consulting firms. The primary reason behind this urge is because consulting firms interact or are involved with all the market participants or industry participants on a regular basis and are very well informed about the market happenings in each of the sectors.
“Progress is impossible without change, and those who can change their minds can change anything”
Trying and maintaining a long-term relationship with existing clients is another key challenge that the small and emerging consulting firms are facing. The common trend has been that the Indian consulting market is more or less a buyer’s market. As a result, instead of convincing the companies to sign-up proposals, factors such as cost-benefit ratios, value added services and so on play a pivotal role. Numerous market participants and increasing market entrants with a variety of project deliverables have leveraged organizations by giving them the option to choose the right consulting firm for the right price for a project.
Smaller and emerging firms also face the challenge of gaining market share. Regional consulting firms have a lesser market share as compared to the bigger established firms who always top the competitive chain, even in the Indian market. However, a trend seen in the recent years, is that the smaller and niche firms are gradually taken seriously than the bigger ones.
Trends in Consultants Industries
Companies today, are not limited to a single consultant firm. There is a growing trend amongst clients to switch away from the mega-deal with one consultant, and pressure to get multiple firms to collaborate on projects. Clients may feel that, no one firm can handle either the scale or complexity of their large projects, and they may require a partnership with five or six firms. Clients may cut projects down into small pieces, which they gave to specialist firms.
The conclusion is that, clients want consultants to work together. They don’t expect one firm to supply everything. Multi-Sourcing intensifies competitiveness among consultancies, which makes consultancies to offer better services.
The business world is desperate for consulting help. With excess staff being cut down, most organizations lack in the technical, strategic and project management skills to handle the benumbing rate of technological and market change. The consulting industry is trying its best to accommodate the demand. Big consulting firms are inhaling new employees, gulping up smaller firms and merging with peers.
In addition to a boom in the number of consulting firms, the size of individual firms is growing in response to the other industry trend: one-stop shopping. Providers that can’t compete on size will still try to offer one-stop shopping by outsourcing a chunk of a client’s project to another firm, while maintaining responsibility for the overall project.
Top consulting firms such as Bain, BCG and Ernst & Young are hiring fresh engineer graduates like never before, and most of these have almost doubled the number of offers they made in this campus placement season in the country’s top institutes. Lately, many of the consulting firms are getting a lot of work in the engineering space and this is pushing the demand for the engineers at colleges such as IIT’s and NIT’s.
Theoretically, in the next few years, consulting could be driven more by collaboration than competition. That is, more cross-working between different consulting firms, which hopefully will result in a better product for the client.
“Consultant firms grasp these trends while preserving the unique attributes to accomplish tremendous things, of their brands in contrasting fields, stand to gain the most in future.”