What are Consulting Companies?
Consultants are people who”consult” or counsel others on particular subject matters. They answer their clients’ concerns, from the simplest questions to the most innovative, complex ones. Another term to refer to when talking about consultants in the business context is”problem solver”, that are compensated and obliged to develop into the entity’s doctor, fixing and identifying any problem clients may encounter in their day-to-day operation. In that way, recent years have witnessed the growth of consulting companies across multiple businesses and functions.
There is no official classification system for different kinds of consulting. We do our best to establish a structure that’s as thorough and easy-to-follow as you can.
1) Purpose-based classification
Management consulting companies
This is perhaps the most popular kind of consultancy and the whole focus of MCP ourselves. Management consulting firms are broken up by top-tier, or MBB companies and smaller boutique firms, classified by standing and prestige. MBB is an acronym. It stands for the top 3 management consulting firms in the market today. The top 3 are McKinsey & Co, the Boston Consulting Group, and Bain & Company. Smaller firms are Big4 Consulting, Oliver Wyman, A.T. Kearney, etc.
What consulting companies do on a daily basis is work closely with their customers and supply recommendations based on qualitative and structured analyses. These companies are hired to reply strategy-level questions that require extensive analysis both on market and client’s capacities in a cross-functional manner. The scope of work normally ends at providing actionable answers or recommendations to allow their clients to follow. Some questions tackled by management consulting companies are:
Should our company enter this marketplace?
How to reverse decreasing profit margin?
It is worth noting that strategy consultants aren’t experts in any field. They don’t provide deep knowledge on a single subject matter. Rather, they’re a group of smart and impartial individuals that are able to pool knowledge across levels, functions and parties to form data-driven approaches and provide informed solutions. At higher rates, for example, Supervisor or Partner, the responsibilities are much higher since they have to control the progress and quality of multiple projects while media and converting customers at the same moment.
If there’s one single most frequent complaint on management consulting companies, it’s that the tips are too generic and theoretical. What direction consultancy does is to make certain that the customers know what to do, but that only 50% achievement. Another 50% pretty much depends upon how clients really execute the strategy. When the recommendations are on stage but there is something wrong with the real implementation stage, clients are not satisfied. And unhappy customers lead to a bad reputation for consulting firms. This can be followed by the appearance of implementation consultancy.
Some big management consulting companies have now developed their particular implementation teams, helping customers to proceed with the action plan. The work is generally more focused than that of management consultancy, either help customers to launch a new solution, to enhance sales pipeline, or to design a credit rating system for banks, etc. What these consulting firms do would be to operate end-to-end with clients for months, or perhaps years on the jobs, to deliver a clear-cut outcome and guarantee those results are sustained.
2) Area-based classification
Function concentrate firms
A less popular kind of consulting firms is one which solves the problems of a specific function, such as IT, HR, finance, legal procedures, etc.
IT Consultancy: helping customers solve a particular business problem utilizing technology. Ordinarily, the clients propose an overall idea about what they need, or exactly what they want the technology to perform for them. The IT advisers then figure out ways to adopt the desired system with the resources available.
Human Resources Consultancy: ensuring human resources function customers in their best interests, regarding both productivity and cost efficiency.
Finance/Investment Consultancy: providing advice on how to best utilize financial resources and the best way to plan future fiscal circumstance.
Marketing Consultancy: advising customers on marketing strategies towards merchandise, brand image, etc.
Industry concentrate companies
Industry focus firms are constrained to market service to customers within a particular business, such as FMCG, healthcare, financial institutions, etc. The benefits of these companies are specialty and expertise in that specified sector. Nowadays, among the most well-known businesses that need consultancy is a relatively big one: healthcare. They are a set of specialists in the market who apply their profound understanding in assisting clients to handle the most pressing issues. Some of these issues are examining the shifting dynamics of the market, upgrading on policies, licensing, aligning physicians, controlling quality throughout amounts, and monitoring competition.