War Chest

Group 12
Anshul Pathal (PGP16148)
Devyanshu Sharma (PGP16152)
Shourya Prateek Rathore (PGP16165)
Shivang Garg (PGP16166)
Aman Verma (PGP16167)
Shahid V (PGP16169)
Contents
INTRODUCTION...........................................................................................................................................3
GROWTH & FIGURES...................................................................................................................................3
SUBPARTS OF THE INDUSTRY.....................................................................................................................4
INDUSTRY ENVIRONMENT..........................................................................................................................4
MAJOR PLAYERS IN THE INDUSTRY............................................................................................................5
KEY PERFORMANCE INDICATORS...............................................................................................................6
Utilization-...............................................................................................................................................6
Average Fee Per Hour-............................................................................................................................6
Leads Generated-................................................................................................................................6
Customer Acquisition Percentage..........................................................................................................6
Repeat Business Percentage...................................................................................................................7
 Consulting Industry Analysis

INTRODUCTION-
Consulting Industry is comprised of professionals who provide expertise to organizations to
help them maximize their profitability and efficiency by improving their management and keep
them running smoothly. Consulting Industry has a huge potential for growth in the upcoming
years as there are more and more startups popping up and this industry provides them with the
skills and expertise which are necessary for their growth and survival in the highly competitive
markets.
Management consulting is one of the earliest instances of outsourcing to the external firms.
Business firms and managers seek external advice and support for critical and challenging issues
such as strategy on seemingly procedural matters such as accounting and taxation.
The big three management consulting firms in the world are Mckinsey & Co., Boston Consulting
Group, Bain & Co. which hold a great prestige in providing management expertise to the
companies all over the world. Ernst and Young, KPMG, PWC, AT Kearney and Deloitte are also a
major players in this industry.

GROWTH & FIGURES-

Consulting Industry is growing at a CAGR of 4.1% since 2007 all over the world. India
contributes around 5.2% of the total revenues in this industry while Japan contributes 67.2% of
the total revenues in this industry.

The consulting industry, in 2014, recorded revenues of nearly $415 billion worldwide, from all
types of consulting, including management and strategy consulting, information technology,
other technical and scientific fields, and human resources. Of this, the US accounted for about
$191 billion.

Accounting services brought in an additional $152 billion in that country in the same year.
According to Plunkett Research, global revenues from consulting will soon be around $449
billion. India’s consulting and outsourcing industry, put together, had revenues of $89 billion in
2014.

According to the Associated Chambers of Commerce and Industry, the Indian consulting
industry is expected to record revenues of Rs.27000 Crore by 2020. One estimate says that
between 500 and 600 high-value consulting contracts, worth $250 million to $300 million, are
 awarded every year by Indian companies, including 30 or 40 projects worth over $2 million
each.

SUBPARTS OF THE INDUSTRY-

There are four major types of consulting:

1. Management/strategy consulting firms help in improving an organization’s structure,

management practices and efficiency. They help in planning the strategy for achieving the
short-term and long-term goals of the company. According to the Institute of Management
Consultants USA, common management consulting specialties include administration,
financial planning and control, human resources management and labor relations, incentive
compensation, information technology, manufacturing, organizational planning and
development, physical distribution, research and development, sales and marketing, strategic
and business planning, and wage and salary administration.   
2. Financial consulting firms provide expertise on financial issues such as capital
budgeting, project valuation, financial information integrity, profit-and-loss reporting, risk
management and insurance engagements, global finance operations, ongoing financial
control and compliance with laws, tax and treasury optimization, and corporate
restructuring.
3. Information technology (IT) consulting firms help clients in designing and implementing
IT systems or develop better IT practices; train staff members in IT areas such as
hardware/software design setup, network setup and administration, computer security, and
search engine marketing; or provide strategic advice on social media and IT issues.
4. Human resources consulting firms help clients make the most of their investments in
human resources they possess (salaried, temporary, and contract workers). These firms
manage compensation and benefits programs; advise firms on personnel policies; analyze
staffing needs; recruit, hire, and train workers; provide advice on diversity issues; and
develop leadership training programs.

INDUSTRY ENVIRONMENT-
Drivers for Consulting Services

After independence, the Indian Government had focused on investment in core industrial
sector and infrastructure. The investment in these sectors attracted various construction and
engineering companies to explore the business opportunities and contribute their expertise
in these sectors. Domain experts were required who could provide their core skill and
competence in designing and building the core industry, dams, roads, buildings etc. Over the
 years, as the Indian industry started maturing, the Indian consulting industry also started
expanding, not only in terms of size, but also in terms of the service offerings. Over the
period, specialist consulting advice was being sought by clients in India and this opened the
opportunity for a number of specialist organizations to draw on their specialist knowledge
base and resources to meet the demand for specialist consulting services.

Inhibitors to Consulting Industry

Geographically, the main inhibitors of consulting growth are the lack of new major regulations in
the US and EU, as well as faltering global economic growth. Military and political tensions have
increased from last year while the upheaval in the Middle East has become literately explosive. In
Asia, China’s buildup of artificial islands over known gas deposits in the South China Sea is
becoming a new conflict zone. Meanwhile, the Latin America consulting market is almost in crisis
mode, due to the low commodity prices that have caused a chain reaction, wrecking government
budgets and driven companies to insolvency across all industries.

MAJOR PLAYERS IN THE INDUSTRY-

The major players in the industry along with their revenue figures are given below-
KEY PERFORMANCE INDICATORS-

Utilization-
Consulting firms often charge an hourly fee for their services. The number of hours charged to
clients is termed billable hours. An extremely important KPI is utilization, the number of billable
hours during a specific period, such as a month, divided by all the available work hours of the
staff. Increasing the utilization percentage translates into higher revenues. Utilization can be
computed for the firm as a whole or for each staff member. The owner and senior partners’
optimal utilization percentage may be lower than that for the junior staff members because the
senior partners have to devote some of their time to acquiring new clients for the firm and to
the strategic planning function.
Average Fee Per Hour-
As with any business, the owner of a consulting firm has to determine a pricing strategy. He
doesn’t want to charge more than the client is willing or accustomed to paying. He must also be
careful to not undercharge just to obtain the client engagement. Various types of services the
firm performs may be billed out at different rates, and senior partners may charge more on an
hourly basis than junior staff members. Over time the business owner learns how to strike a
balance between making sure the firm secures new clients and earns a profit on each project.

Leads Generated -

The firm’s business plan should include goals for the number of customer prospects generated
through each of the marketing methods the firm employs, such as obtaining referrals from
existing clients and inquiries through their website and networking at business events or
through social media. If the number of leads generated begins to decline, the firm’s partners
need to devote more time and energy to finding more client prospects. For the firm to grow, it
must continually add new clients to its roster.

Customer Acquisition Percentage

Also termed "closing rate," this KPI is calculated by dividing the number of new clients acquired
during a period by the number of project proposals that were sent out. Because there is a cost
involved in meeting with prospective clients and developing proposals for their projects, the
business owner seeks to keep this percentage as high as possible. If he sees the closing rate
declining over the course of the year, he may want to review his pricing structure. He may also
review his strategies for finding new prospects -- the firm may not be targeting prospects that
have a strong need for and can afford its services.

Repeat Business Percentage

This KPI could also be termed "measuring customer satisfaction," because clients that are
extremely satisfied with the consulting firm’s work are inclined to hire the firm for additional
projects. Follow-on projects with existing clients are welcome because the client relationship is
established. The consultants that work with the client have already invested the time to
understand the business and the needs and personalities of the client’s management team.