The Role of Consulting in Achieving Business Success

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The Role of Consulting in Achieving Business

Success

Dr. Francine Schlosser

Odette School of Business

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Presentation Outline

• Consulting as a profession in Canada

• Role of the consultant from client perspective

• Role of the consultant from the consultant perspective

• Opportunities in Windsor

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The Management Consulting

…industry comprises establishments primarily engaged in providing advice and assistance to business and other organizations on management issues, such as strategic and organizational planning; financial planning and budgeting; marketing objectives and policies; human resource policies, practices and planning; production scheduling; and control planning(54161) North American Industrial Classification System (NAICS)

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Potential Industry Earnings (

www.icongrouponline.com - INSEAD)

Region PIE US$B % of Globe

Americas 117 33.8

Asia 110 31.9

Europe 87 25.2

Middle East 14 4.0

Africa 13 3.9

Oceana 4 1.2

Total 345 100

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Summary Stats for Ontario (CANSIM data Table 360-0001)

Management Consulting Operating Revenues and Expenses

0

500

1000

1500

2000

2500

3000

3500

4000

1998 1999 2000 2001 2002 2003 2004

Years

dolla

rs x

1,0

00,0

00

Operating revenue (dollars x1,000,000)

Operating expenses (dollarsx 1,000,000)

  Salaries, wages andbenefits (dollars x1,000,000)

Operating Profit Margin has increased from 18.5 to 21.2%

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Nature of Consulting in Windsor5416 Management, scientific and technical consulting service

2001 Census Table 5

Number Total Labour Force Self Employed

Total Male Female Total Male Female

Canada 120,930 68,885 52,040 44,620 29,915 14,705

Ontario 57,690 32,635 25,055 20,145 13,360 6,785

Windsor 615 355 260 155 125 30

Canada % 100 0.5696 0.4303 100 0.6704 0.3296

Ontario % 100 0.5657 0.4343 100 0.6632 0.3368

Windsor % 100 0.5772 0.4228 100 0.8065 0.1935

Canada % 100     0.369 A % of total consult

Ontario 100     0.3492

Windsor 100     0.252

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Fast Facts• Business supplies 2/3 of all consulting

revenues in Canada• 70% of all business and government

organizations in Canada have used the services of a consultant at least once in the last five years (Industry Canada 2001)

• 66% of employees in the consulting industry work in firms with more than 100 employees

• R&D has doubled in the industry (new methods/collaborative technology)

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E-Business in Consulting

• 50% of mgmt consultants using Internet to share or perform collaborative R&D

• 40% use the internet to access databases of suppliers for cooperative purposes

• Canada is way behind the U.K. on Website development, Intranet and Extranet (Industry Canada 2002)

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For Clients…

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Choosing a consultant• Credentials and qualifications• Size and structure of firm (specialized?)• Check references• Meet with them on their homeground• Proposal – including clear price structure and projected costs• Define your deliverables • Realistic timeline with milestones• Have they worked for your competition?• Will they have your best interests at heart?• Who exactly will you be working with?• Don’t expect earthshaking revelations (expect clarity)

Lewis, IEE Engineering Management Dec/Jan 2004/5Cocheo, ABA Banking Journal 2005

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For consultants….

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Industry Entry

• Low barriers to entry

• Little or no regulation

• Relatively few or no formal certification requirements

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Balance of Power• Global consulting per annum – growth

rates steadily decreasing (21.9% growth in 1998 down to -6% in 2002)

• Suggest that high price high margin environment is thing of past

Sources: Kennedy Information 2003Niewiem and Richter, Business Strategy,

2004

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Determining Consulting Niche

• Do you have an expertise, marketable skill or unusual access?

• Research the market – consider firms who currently use this type of service, also those who don’t but could benefit by it

• Understand your competition

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Targeting your marketStaffing

execs

Staffing casuals

Staffing hourly

You ? ? ?

Competitor 1

x x

Competitor 2

x x

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Entry and Promotion

• Location and mailing address – consider leasing joint space

• High quality advertising brochures

• Newsletter

• Join professional and trade associations and go to the shows

• Join consulting associations and get the journals

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Entry and Promotion

• Publish

• Seminars, training and workshop leads

• University affiliations

• Alumni groups

• Pro bono work

• Use other professional contacts (accountants and lawyers)

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Response to market challenges?• More young and highly specialized players • Ownership of results• Create longer term trust based client

relationships• Build efficient internal architecture –

consider 20-40% avge utilization of office space

• Ensure optimal involvement of consultants (consider purpose of job)

• Knowledge sharing between firms

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The Consulting Game

• Your goal is to make money or add value

• Both goals entail a ‘saviour’ strategy

• This includes: – build power; – claim and use specialized knowledge,

processes, tools and techniques; – develop ‘self’ skills for gaining more

business

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Masterful Consulting• Your goal is to make a difference• Use an empowering partnership strategy• Share your knowledge openly and freely• Act with integrity to enhance transformation

and learning

• Merron, 2005, Consulting to Management

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Opportunities in Windsor….

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Develop relationships with peers and clients in Windsor…

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Consultants in Windsor

• Chamber of Commerce affiliations:– Only 15 consultants listed under

‘consultant’– Only 9 under Advertising Agencies and

Consultants

• Are you listed?

• If you are a client – would you search here?

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Performance

• 75% of consulting activity consists of client-referred and repeat business (Cosier and Dalton 1993)

• Serve your clients personally (limit active clients or hire more consultants)

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CAMC(Canadian Association of Management

Consultants)• CMC designation has: university

degree, 6-8 years experience, industry relevant experience in non-consulting roles in the private or public sector, successful completion of courses on professional ethics and consulting essentials, passed exams and work examples

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Three Paths to CMC

1. Entry path (candidates less than 8 years experience)

2. CAMC approved MBA path3. Experienced Path

Consider needs and roles of University of Windsor and of professional consultant partners

www.camc.com

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Be current in your service offering! Find your niche!

Keep an eye on new business environment developments….

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Downturn in Economy• Consider dedicating some time to the United

Way or other NFP organizations • Consider changes in services to reflect

changing human resource needs: like outplacement, EAP programs, new employment strategies and markets (weeks in Alberta)

• And financial /strategic services that support new venture development

• Consider cross-border consulting

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Other Services• Small business survey 2006: “we need

market and competitive research!”• Unique diversity of Windsor population

brings immigrant ideas and experience• We might expect new investment to the

region – private and public – note importance of Financial Times ranking

Windsor as best place in North America to invest

– Consider potential government investment / aid in Windsor-Essex – small local consultants are closer to the pulse