Consultancy in india


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Consultancy in india

  1. 1. Q. Discuss the Future Challenges for Indian Consultants/Consulting firmsfrom the Domestic and Global Perception.Introduction1. After Independence, the Indian Government had focused on investment incore industrial sector and infrastructure. The investment in these sectors attractedvarious construction and engineering companies to explore the businessopportunities and contribute their expertise in these sectors. Domain experts wererequired who could provide their core skill and competence in designing and buildingthe core industry, dams, roads, buildings etc. Over the years, as the Indian industrystarted maturing, the Indian consulting industry also started expanding, not only interms of size, but also in terms of the service offerings. Over the period, specialistconsulting advice was being sought by clients in India and this opened theopportunity for a number of specialist organizations to draw on their specialistknowledge base and resources to meet the demand for specialist consultingservices.Demand & Growth2. The business world is desperate for consulting help. With excess staff beingcut down, most organisations lack the technical, strategic and project managementskills to handle the benumbing rate of technological and market change. Despiteboom in the number of consulting firms, the size of individual firms is growing inresponse to another industry trend: one-stop shopping. The consulting industry istrying its best to accommodate the demand.3. Big consulting firms are inhaling new employees, gulping up smaller firms andmerging with peers. Consultancy providers who cant compete on size still try to offerone-stop shopping by outsourcing a chunk of a clients project to another firm whilemaintaining responsibility for the overall project.4. India has been globally recognized for its fast paced development. Theservice sector has been growing at a fast pace and now contributes more than 50%to the GDP. Thus in the scenario, fuelled by increased demand for consultancyservices by domestic and foreign firms, the sector in India is projected to grow at anannual rate of 30 per cent to become Rs 27,000 crore industry. The consultingindustry in India currently stands at Rs 19,000 crore. Rising opportunities due to abooming economy and growing demand for consultancy services are key factor forgrowth. There would be over 2.2 lakh people working in this field over the next threeyears in the 8500-9000 consultancy firms across the country. The Largestconcentration of consultancy organisations are in the four metropolitan cities: 1.Delhi (25.7%) has the highest number of consultancy organisation among four
  2. 2. Y KRISHNA MOHANID: 2012HZ580512 / 4metropolitan cities followed by, 2. Mumbai (25.5%), 3. Chennai (12.1%) and 4.Calcutta (9.1%).Coping to the Demand5. In a down economy, highly successful companies will invest more incustomers, not less. Companies will compete for customer share, not market share.Companies will realize customer satisfaction doesnt translate to loyalty and willstitch their customer channels together.6. Over the decades, the consulting industry has responded creatively to thechanging needs of clients, leading to the growth of a thriving industry. The insights ofhistory provide guidance as consultants seek the innovations to meet the futureneeds of clients. Knowledge management tools, best practices databases and theInternet make it possible for consultants to draw upon the knowledge of everyconsultant in the organisation. Finally, companies will shift to a long-term focus. Onlyone thing is for sure – the only thing that is constant in the consulting industry – likeany other industry – is change!Status of Indian Consulting organisations7. The major strengths of Indian consulting organisations include professionalcompetence, low cost structure, diverse capabilities, high adaptability and quicklearning capability of Indian consultants are the reasons why Indian consultantsscore over their global peers. The US, UK, Japan, China, Saudi Arabia and Gulfnations acknowledge Indias consultancy firms. Indian consultancy capabilities arestrong in areas like civil engineering, telecom, power, metallurgy, chemical andcomputer software.8. The major weaknesses of Indian consulting organizations, which has hinderedthe export growth of consulting sector in the country, are low quality assurance, lowlocal presence overseas, low equity base, lack of market intelligence, low level ofR&DPerception & Challenges9. It is generally opined within the consultancy service providers community, thedomestic market in India is a bit different from the international market. Keeping inmind the differences of the domestic market with respect to the international market;five major challenges consultants usually face in India, are :-(a) Expectations. The first thing that the client and the consultant tryto define is “scope” of the assignment i.e. what would be the deliverables atthe end of the engagement. But “scope creep” i.e. uncontrolled changes orcontinuous growth in a projects scope, a major phenomena in India, comes tohaunt the consultants and clients as the scope is inadequately defined eitherdue to the underlying complexity of the problem, improper pitch made by the
  3. 3. Y KRISHNA MOHANID: 2012HZ580513 / 4consulting firms or because of the client simply focusing on the end resultswithout fully appreciating the problem at hand. Similarly the imagery ofbusiness class travels and luxury hotels that one commonly associates withconsulting may not be the rule in “price-sensitive” India.(b) Data. Getting accurate and adequate data is a major issue inIndia. If we go by the inputs, market assessment, feasibility or sizingassignments are very few and far between in developed economies whereasIndia is replete with such projects. One should not be surprise by the fact thatIndian-based KPOs and analytics firms do an excellent job crunchingnumbers for their foreign clients but struggle while coming up with suchinsights for Indian clients and most of the blame lies with quality of data. Theneed for 3-4 types of ID proofs in India is another proof that data is not“proven” yet. So you may have a hard time drawing meaningful insights out ofthem.(c) Experience. Consultants are not scientists who invent newofferings rather they rely on innovation or improvisation and a major sourcefor these insights is “collective wisdom” be it in the form of knowledge of thevarious team members or experiences gained through previous engagementsin similar industries or by handling similar issues. With major consulting firmshaving less than two decades of presence in India and the country witnessingmajor changes in the intervening period, one may still be some distance awayfrom being “too-old” to “know it all” as far as Indian landscape is concerned.Similarly for the clients, one of the major reasons for their apprehensions orexpectations is their limited experience of engaging with the consultants.(d) Diversity. It is hard to imagine a country as vast and diverse asIndia. A sector may be organised and consolidated down south but it may stillbe unexplored in the east. So, with time you may get an idea about aparticular market in India but to come up with findings that apply to the entirecountry, you may have to assess them separately and independently. Thiswould require covering the geography either as an individual or tapping intolocal resources if available. Different languages, cultures, disaggregatedpopulation, varying income levels etc. will give you a run for your money.(e) Openness. As a consultant, one has to conduct numerous interviewsat the client end, be a part of focused group discussions, touch-base withcompetitors and other stakeholders in order to draw useful insights. But blameit on the pesky telemarketers or the consultants‟ image, it‟s not easy toconvince the external stakeholders to spare a few minutes for you unless ofcourse if you have a feminine voice. One of the major roadblocks is theinability of the prospective interviewees to differentiate industry standards orinformation from strategic and confidential information. But things may changeif you have close contact that connects you with the right person. It could also
  4. 4. Y KRISHNA MOHANID: 2012HZ580514 / 4boil down to consultant‟s capability i.e. whether he is able to engage with theinterviewee or it could be because of the Indian culture of family ownedbusinesses where they mainly rely on close relatives for critical tasks.10. In addition to the above major challenges, a few other challenges that effectthe scope of consultancy in India are - lack of proper project management; inability tosell clients and their employees on recommended systems and procedures so theyare fully adopted; - over-promising results and finally the lack of communication withthe client.Conclusion11. In the preceding paragraphs, the different perspectives of consulting in India,along with explanations for such perspectives, have been presented. In addition tothe above perspectives a number of other factors – called state factors and Industryculture also play an important role affecting the perception. The state factors - stateshaving different labour laws, property laws and people of different cultural andeducational backgrounds determine - how industries do business, the kind ofregulations and taxes they are likely to face, and the quality of infrastructure to whichthey have access, the nature and level of bureaucratic hurdles, infrastructuralchallenges, archaic economy held back by traditional „obstacles to modernisation‟such as caste etc...; The Industry culture – varying Indian corporate culture frombeing old-fashioned to different degrees of modernisation, varying availability ofhighly skilled labour force, varying infrastructure standards, varying degree and typeof technological development; all these included further contribute to the varyingmanifestations of domestic and international perceptions.Y Krishna Mohan2012HZ58051