Consultancy Services in

India
By
Vishnu R
S3.MBA
College of Engineering, Trivandrum
 Business consulting indicates practice of helping
organizations improve their performance.

 Organizations hire the services of management consultants

for a number of reasons.

 provide organizational change management assistance,

development of coaching skills, technology implementation,
strategy development, or operational improvement services.

 Both in the public and private sectors,

consultancy services help improve business
performance to enhance value and to
improve their competitive position in the
global market.

Consulting ??
 The first management consulting firm was Arthur D. Little,
founded in 1886 by the MIT professor of the same name

 Booz Allen Hamilton was founded by Edwin G. Booz, a

graduate of the Kellogg School of Management at
Northwestern University, in 1914 as a management
consultancy

 After World War II, a number of new management

consulting firms formed, most notably Boston Consulting
Group, founded in 1963,

Brief History
 lying somewhere along a continuum, with an 'expert' or prescriptive
approach at one end, and a facilitative approach at the other.

 In the expert approach, the consultant takes the role of expert, and
provides expert advice

 With a facilitative approach, the consultant focuses less on specific or

technical expert knowledge, and more on the process of consultation itself

 Many consulting firms are organized in a matrix structure,

Specialization
 such as information technology consulting, human resource consulting,
virtual management consulting and others

 "boutique" consultancies, however, are smaller organizations specializing

in one or a few of such specializations.

Types & Specialization

 The necessity of moving ahead in the competitive structure or chain
and gaining optimum market share in today’s highly competitive
markets.

 Made companies across verticals opt for third-party consulting and

advisory services.

 The differentiating factor that each company puts forward in order

to achieve competitive edge over their rivals has been one of the
important factors

 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 for the
products and services offered by consulting firms

Why consulting
  After Independence, the Indian Government had focused on
investment in core industrial sector and infrastructure.

 This attracted various construction and engineering companies

to explore the business opportunities and contribute their
expertise

 Management consulting has grown quickly, with growth rates of

the industry exceeding 20% in the 1980s and 1990s.

 Over the years, as the Indian industry started maturing, the

Indian consulting industry also started expanding

 specialist consulting advice was being sought by clients in India

 This opened the opportunity for a number of specialist

organizations to draw on their specialist knowledge base

Indian Consultancy Industry

 The Institute of Management Consultants of India (IMCI), is the premier body
of management consulting professionals and the only registered institute of
established management consultancy firms and practicing individuals in the
country.

 The MCAI was founded in 1963.

 consulting remains highly cyclical and linked to overall economic conditions.

 there are four main types of consulting firms:

◦ Large, diversified organizations that offer a range of services,
including information technology consulting, in addition
to a strategy consulting practice

◦ Medium-sized information technology consultancies, that blend boutique style

◦ Management and strategic consulting specialists that offer

primarily Strategy Consulting and Business Intelligence Models

◦ Boutique firms, which have focused areas of consulting

expertise in specific industries, functional areas or technologies.
 India has been globally recognized for its fast paced
development.

 The service sector has been growing at a fast pace and

now contributes more than 50% to the GDP.

 Consulting organizations are generally classified as

◦ Management consultancy organizations,

◦ Engineering consultancy organizations
◦ Legal consultancy organizations,
◦ Socio Economic consultancy organizations
◦ Financial consultancy organizations
Source:
http://www.consultingnetwork.co.in/indian-consulting-market-an-insight-into-the-facto
rs-
 The demand for consulting services tends to increase with the
economic development of the country.

 The requirement for consultancy services stems from a diverse

range of clients, largely governed by the large corporate sector.

 It is estimated that the consultancy business in India engages

about 100,000 persons in about 5000 consulting firms

 The current size of the consulting industry in India is about Rs.

10,000 crores including exports

 According to the 2002 data of the Federation of Indian Export

Organizations (FIEO), India's share in global trade in services
was about 1.3%. India’s share of consultancy exports is about
0.5% of global trade

Drivers for Consulting Services

 The trade policy in India reflects the strategic importance
of India’s comparative advantage of trade in services.

 The services sector has been identified as a thrust sector

for trade policy.
 Some of the key initiatives of the government in promoting
exports of consultancy services are

◦ Market Development Assistance (MDA), Market Access Initiative (MAI)

scheme, proactive EXIM Policy and EXIM Bank schemes.

◦ Government also provides exemption on service tax for export of

consultancy services.
Source:
http://commerce.nic.in/trade/export_promotion_cms.pdf
Government Initiatives
 Strategy Consulting Firms in the Indian consulting arena:
◦ McKinsey & Company

 McKinsey & Company is a global management consulting firm that focuses

on solving issues of concern to senior management

 In September 2007, the firm was hired by IDBI Bank, one of India’s
leading public-sector banks, to assist in smoothing out legacy issues
resulting from the bank’s 2006 merger with United Western Bank.

 McKinsey’s work will involve restructuring the bank’s branches,

reengineering processes and implementing business strategy

 In June 2007 teamed with the Confederation of Indian Industry worked

together to advise the Indian government on Bharat Nirman, an ambitious
initiative launched to strengthen the country’s rural infrastructure.

Source: http://www.consultingnetwork.co.in/strategy-
consulting-in-india/

Strategy Consulting in India

The major strengths of Indian consulting organizations include
◦ professional competence
◦ Low cost structure
◦ diverse capabilities
◦ high adaptability and
◦ quick learning capability of Indian consultants

The major weaknesses of Indian consulting organizations are

◦ low quality assurance
◦ low local presence overseas
◦ low equity base
◦ lack of market intelligence
◦ low level of R&D
Source:
http://commerce.nic.in/trade/export_promotion_cms.pdf

Strengths and Weaknesses of

Indian Consulting Industry
  Acquiring the right set of talent challenges the firm in matching the
client’s requirements

 Increasing rate of attrition affects the

organizational growth

 Maintaining long-term relationships with clients

affects the long-term existence of the firm

 Off shoring/Outsourcing to India acts as a

challenge as well as driver

 Threat of Substitutes impacts new business

development

Source: http://www.consultingnetwork.co.in/indian-consulting-
market-an-insight-into-the-factors-restricting-growth/857/

Challenges…
 Corporations sets up their own internal consulting groups,
hiring internal management consultants either from within
the corporation or from external firms employees.

 Are often formed around a number of practice areas,

commonly including: organizational development, process
management, information technology, design services,
training, and development.

Rise of Internal Corporate Consulting Groups

Advantages
 Internal consulting groups evaluate engagement on projects in light of the
corporation's strategic and tactical objective.

 The internal consultant requires less ramp up time on a project due to

familiarity with the corporation, and is able to guide a project through to
implementation — a step that would often be too costly if an external
consultant were used.

 Internal relationship provides opportunities to keep certain corporate

information private.

Disadvantage
 May not bring the objectivity to the consulting relationship that an external firm can.

 An internal consultant also may not bring to the table best practices from other corporations.

 It is often difficult to accurately measure the true costs and benefits of an internal consulting
group.
 Factors like globalization, off shoring and outsourcing have
made India a suitable destination for various companies.

 The regional smaller and emerging firms still face a lot of

challenges.

 Global firms who are eminent and well-known have a

better probability of converting proposals into projects
compared to the emerging firms with in India.

Conclusion
Thank you for
your
patient Listening