The 6 Main Types of Management Consulting services
Management Consulting is what most people think of when someone says “consulting.” This field is dominated by large consulting firms like McKinsey, Bain, and Boston Consulting Group, which are hired to help enterprise businesses improve strategy and operations or manage significant business events like mergers and acquisitions.
Management consultants make some of the highest salaries in the professional world, and as you would expect with such a lucrative career, getting into the field is extremely difficult and ludicrously competitive. You need top-tier grades, you need to make the right connections at networking events, and you need to absolutely nail each stage of the interview process.
And things don’t ease up once you’re in. You will need to be a top performer at each level in a promote-or-be-fired progression system.
Management consulting can be further broken down into a number of difernet dicsiplines, the following six being most popular:
Strategy Consulting
Business strategy or “strategic management” is the uppermost level of decision making that drives a business. This is the domain of the C-suite and takes a top-down view of the business. It’s where the most fundamental directional choices are made that affect every aspect of the business.
Strategic management asks questions like:
- What is our long-term vision and trajectory?
- Should we allocate resources to entering a new market?
- Should we drop certain departments/businesses or retain our current portfolio?
Answering these questions requires in-depth data analysis and market understanding. These are huge decisions for a large business, and doing “due diligence” on the potential directions and outcomes is an intensive process.
This is why business leaders will often bring in strategy consultants who specialize in a particular industry or type of business decision. The consultants will be able to look at every possibility and probability and provide a thorough, unbiased brief the C-suite can then use in their decision making.
From a career standpoint, strategy consulting is considered the most prestigious and difficult to access track in management consulting. In order to get your foot in the door, you will need to be at the “top of the class” in every conceivable metric and have an exceptional capacity for data analysis.
Operations Consulting
The operational processes of a business are what drives the business itself. Operations covers things like:
- Process management
- Procurement
- Outsourcing
- Supply chain management
Businesses are always looking to better optimise their operational processes in a variety of ways, like increasing efficiency, cutting costs, improvement quality, etc.
In certain scenarios, however, such as economic downturns, changes in management, or technological rollouts, operations consultants will be brought in to advise on significant changes to a business’ operational processes.
Operations consultants work closely with senior business executives to extract the most value from a business’s operations. They primarily ask ‘how’ questions, like:
- How can we reduce costs in this business?
- How do we increase efficiency?
- How can we reduce bottlenecks in this supply chain?
- How do we improve quality control in the value chain?
Unlike strategy consultants, operations consultants will often work with a business beyond just giving advice, in many cases being involved through implementation and deployment. But like all management consultants, operations consultants are problem solvers, and getting into this career field is highly competitive.
IT Consulting
Technology is developing at a rapid pace, and businesses need to keep up if they want to achieve their goals and maintain a competitive edge.Information Technology (IT) has ballooned into a massive part of commerce and includes components like:
- Systems integration
- Enterprise architecture
- Software management
- Data analytics / Big Data
- eCommerce
The need for expert advice in creating, implementing, and managing these systems has catapulted the IT consulting industry – $408 Billion – to nearly double the value of the management consulting industry – $229 Billion.
Unlike management consulting, which tends to be the realm of enterprise businesses, IT consulting is relevant and even essential for businesses of virtually every size.
IT Consultants ask questions like:
- How can we use new technology to help us reach our strategic goals?
- Can we optimize the existing IT setup, or do we need to replace it?
- How do we effectively integrate changes into the existing framework?
IT consulting is incredibly demanding: “We live for our clients,” says Gerard Verweij, U.S. technology consulting leader for PricewaterhouseCoopers. “That sometimes means we have to make sacrifices because our clients are in need. Over-time, weekend work and travel are all part of the job.”
IT consultants need to possess a detailed knowledge of leading applications, analytics software, security practices, cloud computing, etc. They also need to keep abreast of emerging technologies. It’s a challenging field, but the ever-growing demand makes t very lucrative.
Financial Advisory Consulting
To survive and thrive, businesses must make objective and informed financial decisions. And, these decisions must take into account a huge number of complex variables.
This is why the market for financial services is so vast, including:
- Corporate finance
- Transaction services
- Restructuring
- Risk management
- Forensics and litigation
- Real estate
Financial Advisors work closely with clients to provide financial advice and expertise specific to the individual company. Financial Advisors ask questions like:
- How can we legally and ethically reduce the tax bill of this corporation?
- How can we improve cash-flow in this business?
- Which investment opportunities will provide the highest return, for the least amount of risk?
Financial Advisors must attain specific qualifications and a licence to provide financial advice.
Human Resources Consulting
“A company is only as good as its people,” said Kathryn Minshew, founder, and CEO of The Muse.
So, the need to manage employees effectively is crucial to a business’s long-term success. And, there’s a lot to take into account. Businesses need clear and effective processes in place to manage things such as:
- Training and development
- Employee engagement and satisfaction
- Conflict resolution
- Employee benefits and pensions
- Talent mobility
The human resource consulting industry emerged from general management consulting to help companies address these more specific tasks and decisions.
Human Resource Consultants ask questions like:
- Are these policies and procedures in-line with state/federal laws and regulations?
- How can we best implement these HR policies and procedures?
- Do we need to create and implement training sessions related to HR programs?
- How can we improve employee satisfaction and effectiveness?
Essentially, Human Resource Consultants work to ensure that an organization is using its personnel as effectively as possible.
These consultants must have a broad knowledge of many other fields, including accounting, marketing, IT, finance and labor laws. This enables them to fully understand a company’s HR issues and how to best remedy them.
Also, HR Consultants typically need a Bachelor’s Degree in a subject like human resources management or business administration, and a specialist HR certification administered by an organization like the HR Certification Institute (HRCI).
Risk & Compliance Consulting
All organisations need to adhere to laws, regulations, standards, and ethical practices. And, compliance is the process of ensuring they do.
Enforcing compliance using company policies helps to detect and prevent any violation of governance, such as fraud, abuse, or discrimination. In turn, this can protect the organization from fines and lawsuits.
In other words, the purpose of a compliance program is to protect an organization from risk.
Risk and compliance consultants ask questions like:
- How can we conduct an in-depth analysis of this organization’s compliance programs, in relation to applicable regulations and ethical standards?
- In order to minimise exposure, what are the business or industry-specific risks that we need to establish internal controls for?
- How can we improve this compliance program and integrate it into the company?
Risk and compliance consultants advise senior management on these issues. And, they often work to develop programs that ensure organisation-wide assimilation and compliance.
These consultants must possess a broad knowledge of legal regulations and organizational management, but they also need an in-depth understanding of compliance parameters specific to their industry or niche.
Risk and compliance consultants will virtually always need a Bachelor’s Degree. Many also possess an advanced qualification such as a Master of Business Administration (MBA) or Certified Public Accountant (CPA).