This presentation provides the basic information about Management Consultancy, the steps involved, life cycle, how to prepare proposals, client management, expectations, benefits to business and some tools, tips and techniques

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Management
Consulting
D. Vasudevan
Consultant

2. Origin of Management Consultancy
 The ‘Youngest’ Profession or the “Oldest”?
 How Professions evolve?
 Lord Krishna advised the Pandavas on battle
tactics and warfare
 Chanakya mentored Chandragupta Maurya
 Birbal was principal consultant to Akbar
 Corporate Maharajas seek advice from
consultants and consulting firms
 Consulting profession serves a human need for
external advisors, mentors, experts, etc
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3. Source: Rajkumar S. Adukia
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Pioneers in Consultancy
 The first management consulting firm was Arthur
D. Little, founded in the late 1890s by the MIT
professor of the same name. Arthur D. Little
originally specialized in technical research, but
later became a general management
consultancy.
 The first pure management and strategy
consulting company was McKinsey & Company,
still considered a leader in the field. McKinsey
was founded in Chicago during 1926 by James O.
McKinsey

4. Management Consultancy
- What it implies ? -
 Providing expert advice and assistance on
a functional or a sectoral subject
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5. Consultants help
businesses run smoothly
and efficiently to stay
competitive
What Management Consultants Do?
 Work with clients to
define opportunities or
problems
 Collect and analyze data
 Recommend client
actions
 Work with the client to
implement the
recommended solutions
 Bring about healthy
change

6. Consultants work with
clients to complete projects
that they can’t (or don’t
want to) do themselves
Face large scale business
issues/problems
Need an objective, fresh
insight into their situation
Need expert information
not available “inside” their
organization
Need help making change
Why MCs are needed?

7. Management Consultancy entails:
 Problem definition
 Data gathering and analysis leading
to conclusions
 interviewing
 number crunching
 outside research/benchmarking
 modeling new processes,
organizations, or IT systems
 utilizing the tools in your toolbox
 Team-based problem solving
 Communication

8. MCs Deliverables
 Recommendation
 findings & conclusions
 recommended approach
 costs/benefits
 Action plan
 project work plan
 resources required
 progress milestones
 performance measurement
 Implemented change
 new process, organization, or system
 education/training
 tangible results

9. Domains of
Management Consultancy
 HR and Organisation
 Marketing and sales
 Strategy and Corporate Restructuring
 Operations
 Risk
 Finance
 IT and ITES
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10. Functional Subjects
 Relate to different functions of management
 Examples :
 Accounts & Finance
 Information Technology
 Collaboration Arrangements
 Planning
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11. Sectoral Domains
 Relate to different business and public
service sectors
 Examples:
 Tourism
 Small Scale Industries
 Financial Services
 Infrastructure
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12. Potential Clients
 Expert advice and assistance in the
different functional and sectoral areas are
required by a wide spectrum of clients
ranging from private sector, public sector,
government and non-government
organizations.
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Qualities needed in a
consultant
 Skills in writing reports
 Skills in structuring task
 Technical knowledge
 Industry experience
 Communication skills
 Political skills
 Presentation skills
 Willingness to take risks
 The ability to create a support system and make things
recover if anything goes wrong
 Ability to tolerate insecurity
 Desire to learn continuously

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 Commitment to both work and people
 Business understanding;
 Change management skills;
 Ownership, management and delivery of
solutions to clients;
 Project delivery and risk management;
 Excellent interpersonal skills;
 Ability to transfer skills to others;
 Creative and analytical thinking; and
 Adherence to a code of conduct and ethical
guidelines
Qualities needed in a
consultant

15. Some Specific
Consultancy Opportunities
 A few examples of such opportunities are :
 Conversion of cash based accounting system
to accrual based double – entry accounting
system for para-statal agencies and
government departments
 Development of computerized accounting
system / Financial Management System
 Preparation of financial manual and
regulations
 Financial planning, analysis and projections
for commercial and non-commercial entities
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16. Some Specific
Consultancy Opportunities
 Costing and pricing of products and services
 Due delegence, Valuation of assets and
companies
 Structuring of joint ventures, special purpose
vehicles and public-private partnership models
 Implementation assistance
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17. Extended Opportunities
 Every function has linkages with other functional
areas
 Hence, apart from stand-alone consultancy, there
is scope for collaborative consultancy with other
functional and sectoral experts
 Examples with regard to finance function:
 Tariff studies with economists
 Project feasibility studies with
engineers/technocrats
 Computer applications with software
professionals
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18. Conducive Conditions
 For effective utilisation of emerging
consultancy opportunities, it is important to
have:
 Ethical practice code
 Level playing field
 Assistance in registration / empanelment
with various national and international
institutions and agencies
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Bidding Stages & Process for
Management Consultancy
Notice Inviting EoI
Review of Responses
from Consultants
Short Listing of
Consultants
Issuance of RFP
Pre-bid Meeting
Evaluation of Bids
Selection of Consultant

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Finding the Right Consulting Partner for
a Consortium Bid

21. Objective
 Win the Bid !!
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Criteria
Technical Competence

23. Implies
 Experience of the bidder in similar
assignments
 Relevance of expertise of bidder’s
specialists in relation to current assignment
 Appropriate approach & methodology
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24. Experience
 List requirements as per Scope of work
 Compare the requirements with similar
work / work having allied components
undertaken
 Gaps, if any, call for association / Joint
venture / Consortium
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25. Experience
 Identify key positions for the assignment
 List tasks for each key position
 Select in-house experts for the key positions
 Compare listed tasks for each key position with
the expertise of selected personnel
 Skill gaps, if any, call for external experts /
association
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26. Selection Parameters
 A. Technical
 Possess the requisite experience that
addresses the gap
 Availability of specialists to meet the gap in
expertise
 Participation in bid preparation, especially
methodology of work
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27. Selection Parameters
 B. Commercial
 Cost effectiveness
 Association arrangement suiting the client’s
needs –
• Joint venture
• Associate
• Sub-consultant
• Specialist secondment
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Preparing the Technical Proposal

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Basis for Technical Proposal
 Terms of Reference
 Request for Proposal
 Defined format (in some cases)
 Eligibility documents

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Purpose
 Explain and clarify the understanding of the
scope of work and the way it will be
undertaken
 Respond to queries, if any, of the client on
the contents of the proposal
 Demonstrate the professional expertise,
experience and suitability to carry out the
assignment
 Showcase client testimonials

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Contents
 Background of the consultancy
 Objective of the assignment
 Understanding of the scope of work
 Approach & Methodology
 Work Plan & Deliverables
 Consulting Team
 Experience of the Consultant
 Support facilities from the client

32. Points to Consider
 Meet the evaluation criteria
 Understanding of scope of work
 Approach & Methodology
 Relevant Experience
 Expertise of key personnel
 Weightage on
 CVs
 Experience
 Methodology
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33. Other Issues
At times, client may ask for
recommendations
Though inappropriate and premature
at this stage to present
recommendations
However, by way of examples, may be
mentioned as part of the methodology
outcome
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34. Carrying out a Management
Consultancy Assignment
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35. Case questions
 Case questions provide an interviewer the opportunity to
assess your:
 Analytic skills
 Logical thinking
 Problem structuring
 Ability to filter information
 Tolerance for ambiguity
 Poise and communication skills
Case questions are typically used in management
consulting interviews:

36. Industry Analysis
Market Expansion
Investment
What is a case interview? -
Sample Business Problems
Simulates a consultant/client situation
 Profitability
 Pricing
 Wildcard
An opportunity to evaluate a candidate’s analytical skills

37. Hypothesize SynthesizeFrame
• Get the facts
straight
• Ask pertinent
questions
• Develop
plausible
answers
• Develop
framework to
test hypotheses
• Tell the story
• Make
recommendations
And when things aren’t going as well as you’d like…
• Recognize you’re stuck
• Ask for more information
• Pursue different paths
Approach the case logically
Listen and
Clarify

38. Think creatively
DO
 Approach the problem
methodically
 Raise multifunctional
aspects
 Adopt CEO/shareholder
perspective
 Consider organizational and
cultural issues
 Challenge conventions
DON’T
 Worry about solving the
case – thought processes
are paramount
 Shotgun potential solutions
without appropriate analysis
 Force fit a standard
framework
 Speak before thinking
carefully
 Rely on finding a “silver
bullet”
 Use buzz words

39. How to do well?
 Matrices
 Strategy Tools
 Porters 5 Forces
 SWOT Analysis
 Marketing Tools
 Economic Tools
 Competitive Analysis
 Decision Tree Analysis
 Financial Analysis (profitability, cost driver)
Open your TOOLBOX

40. Strategy Tools - Expanded
Used for industry insight and attractiveness

41. Marketing Tools - Expanded
Useful for marketing analyses - to ensure you’ve covered the issues

42. Useful for marketing analyses - to ensure you’ve covered the issues
Economic Tools - Expanded
 Break-Even Analysis
 Marginal Cost
 Demand Analysis
 Supply Analysis

43. Financial Tools - Expanded
Profitability Analysis:
 Profits = revenue - cost
 Revenue = units x price
 Costs = fixed cost + variable cost
 Variable cost = cost/unit x # of
units produced
Cost Driver Analysis:
 Materials – commodity prices,
product formula
 Direct Labor – wage rates,
throughput rates
 Indirect Labor – staff size,
wage rates, plant output
Useful analytics to surface revenue and cost issues

44. Useful References
 International Council of Management Consulting
Institutes (ICMCI): www.icmci.org
 THE INSTITUTE OF MANAGEMENT CONSULTANTS
OF INDIA: http://www.imcindia.co.in/
 Institute of Management Consultants, USA:
http://www.imcusa.org/
 Management Consultancies Association, UK:
http://www.mca.org.uk/home
 Wikipedia - http://en.wikipedia.org/wiki/Management_consulting
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mail@dvasudevan.com