Extended Role of Management Consultants

Over the recent years the idea of management consultants have changed dramatically in both, management consulting and in other professional services. Management consultants have started to rethink and redefine their business, widening and enhancing their service offerings, merging or establishing alliances with other consultants and professional service firms, and abandoning self-imposed restrictions on the sort of work they are prepared to undertake. These changes have been triggered by a number of factors, including the growing complexity and sophistication of doing business in national and inter- national environments, market deregulation and liberalization, new opportunities for innovative consulting, growing demand for integrated and “one-stop” professional services, competitive pressure coming from other professions and, above all, the advancement of information technologies and their rapid penetration into management and business processes. In using consulting and other professional services the clients are asking “what will add value to my business”. Rather than identifying needs, devising a solution and implementing a new and “tailor-made” system for every client, a consulting firm has a range of products that are offered to all clients (or categories of clients).Advice and know-how have turned into a commodity. The client can choose among standard offerings “off the shelf” – diagnostic instruments, change and project management programmes, training and self- development packages, production control systems, enterprise resource planning or customer relationship management systems, e-business or knowledge management software and so on.Commoditization of methods and systems is currently a feature of knowledge management and transfer. It responds to demands from clients, who want to get the best system, methodology or approach at an affordable price, within reasonable time limits, and with a guarantee of applicability and standard performance. This is what the commoditized professional services aim to provide. Professional service providers who have commoditized their knowledge enjoy an enormous business advantage – if the product is in demand and sells well. They can serve large numbers of clients. Instead of using experienced and highly competent consultants for each assignment, the consulting firm can develop standard procedures for delivering standard products, and hence use more junior and less experienced staff, and cut the price.In larger IT and management consulting firms, outsourcing has become the fastest-growing area of service and an indispensable source of stable and long- term income. This reflects the fact that the consulting firm may be better equipped to carry out certain activities, which it can perform more efficiently and economically than the client while keeping up to date with advances in the field. It also reflects new ways of doing business and managing knowledge, in which clients focus on their core business and use intellectual capital and financial resources in areas of their principal strength.Consulting in finance, including financing the enterprise and financial control of operations, also started developing rapidly. A number of the new management consultants had a background in accountancy and experience drawn from working with firms of public accountants. To meet their clients’ needs and to attract clients from new sectors of economic and social activity, management consultants have developed various strategies, creating and offering new special services, specializing in particular sectors or, on the contrary, providing broad comprehensive packages of services.In recent years consultants have stepped out of the traditional limits of the management field and deal with plant automation, communication systems, quality control, equipment design, software development, economic studies, environmental protection and the like if these are of interest to clients and can enhance a consultant’s competitive edge. In addition to improving service quality and offering new sorts of services, management consultants have become more dynamic and even aggressive in searching for new clients and trying to convince potential clients that they can offer a better service than others. This has brought about many developments in the advertising and marketing of consulting services.Many large consulting firms have sought to internationalize their operations in searching for new markets, adapting to the changes in the international economy, and taking advantage of the new opportunities for consulting in the developing countries. In large consulting firms, foreign operations may contribute 30-70 per cent of income. Great efforts have been made to increase the long-term benefits derived by clients from consulting assignments, by diversifying and perfecting the intervention methods applied at all stages of the consulting process. Many organizations private and public have become experts in using consultants. They have developed their own criteria and methods for selecting consultants, collaborating with them during assignments, monitoring their interventions, learning from their approach and evaluating results. Consultants have become indispensable advisers in major business decisions and transactions.

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