Consulting – A Primer
Most students respond to job market trends by changing their innermost convictions and long-term career goals with the slippery ease of a chameleon. The consulting industry is one such beneficiary of a structural shift in aspirations. Banking was brought down to its knees in 2007, and it continues to be in limbo, with companies like UBS, Bank of America, HSBC, Citigroup announcing major job cuts across service lines and especially in investment banking. Management consulting, on the other hand has remained fairly insulated from all the bad news about the economy, and has emerged as the preferred option for India’s best and brightest. Here’s a primer on the consulting industry, the types of consulting firms, pros and cons of working in a consulting firm.
Why do companies hire consultants really? Don’t they understand their own business?
1. They do, but once in a while, it genuinely helps to have a person from outside look at your problems with a fresh pair of eyes. The consultant, being an outsider, will not be restricted by the tunnel vision that often impairs the judgment of long-entrenched senior management, and will be able to give a more impartial, independent and possibly more creative solutions.
2. To know what the competitors are doing, or (politely) benchmarking. Benchmarking is a useful tool to set sales targets, build your employee incentive schemes, change your business processes and generally justify any changes that may otherwise appear unpopular.
3. To validate management’s own conclusions. The CEO is answerable to the board of directors, and his or her strategic decisions (like Starbucks deciding to increase number of outlets in India) will look totally whimsical to the company’s board unless they are backed up by research and analysis done by external consultants.
Types of consulting firms
There is a clear hierarchy here, a caste system, with the strategy consulting firms occupying the top tier followed by others (business consulting, process consulting, IT consulting, HR consulting and supply chain consulting) who all claim to be strategy consultants.
Strategy consulting firms: These firms (Mckinsey, BCG) have built their brand over the years by hiring the best and brightest minds from the top B schools, and advising the world’s best companies. There are some boutique firms in this list which focus on a limited set of industries (like the Parthenon group which focuses mainly on education) while the bigger firms have a broader industry focus. All are decidedly snooty when it comes to hiring. The problem posed to a strategy consulting firm will be extremely vague, like: What should be Tesco’s entry strategy in India?
Process consulting/Operations consulting firms:
The big 4 audit firms play in this space, although they have moved into the ‘strategy’ space as well. They have patiently acquired knowledge of their client’s businesses and industries by studying their accounts over a period of years. The big 4’s work varies from the glamourous (“What programming content should I show on Colors TV to maximize TRPs?”) to the mundane (“How do I reduce my company’s tax bill”). There is a conflict of interest, as the company doing the consulting is in many cases the company keeping the books. The problem posed to an operations consulting firm will be more specific – “How do I procure my raw materials at the lowest possible cost”.
The question posed to an IT consulting firm will be even more specific. “Should I or should I not upgrade to Windows 8”. Or maybe “Financial Times’ content management software is out of date. What are the upgrade options in open source and licensed software?” Having worked with a large number of industry peers on similar projects, IT companies are well placed to advise their clients on these issues. Again there’s a conflict of interest here, as the company doing the advising will often try to make sure that the actual implementation of the project is awarded to itself (in the above case, once TCS decides the best option for Financial Times, it will actually do the migration of all the content to the new content management software).
Pros and cons of working in a top-notch consulting firm:
• Better quality of work as compared to other options like investment banking. Sure, you won’t be able to buy a Merc with the first year’s bonus, which you might have been able to pull off as an i-banker. However, the work is generally described as intellectually stimulating, given the novel nature of the problems facing companies, as compared to the grinding monotony of excel sheets. The pay is not bad by the way. Instead of being stinking rich, you’ll be merely well-heeled.
• Work with brainy people. Most Mckinsey-ites are a bunch of insecure, super-determined, hyper-diligent and obsessively analytical overachievers. Your connection with clients will be at the level of senior management (CEO, CIO, CFO etc).
• Exit options. Many consultants exit these firms to join at top executives at leading companies of the industries they cover.
• Travel. Most engagements will require you to be at the client-site throughout the week, with the option of returning home for the weekend (assuming the client is in your country). See places, meet new people.
• Choona lagane ka kaam hain – told to me by a BCG consultant whose identity I wish to protect. Enough said.
To get a view of the qualities you need to become a consultant, see this article. To summarize, you need to be
• A smart and confident communicator – This need not mean you have to be an extrovert or a sales-guy. An introvert can be a very good communicator in his area of expertise. You also need to be someone who can stand up to 50-something CEOs and tell them they’re wrong.
• An analytical thinker. Alas, the world of consulting is not for the dreamy, creative types. You will have to demonstrate a structured and logical problem-solving thought process. Creativity is good to have, but not essential.
The next section will look at realistic job previews at two or three job profiles in the consulting roles that are offered to B school students, as well as some tips on how to get through consulting interviews.
IT Consulting: The role of a consultant in IT firms like TCS, Cognizant etc. is comparable to that of a business analyst. The job description of a consultant in such firms is listed below:
1. Requirements gathering: Working with client to decide scope of the project, map the business requirements into things the developers can understand, i.e making screen mock-ups, process flow diagrams, mapping business fields into database fields etc.
2. Industry Analysis: Studying latest trends in the industry, adding some gyaan from your company’s experience with clients. The result will be a marketing ppt that can be used to start a conversation with prospective clients.
3. Pre-sales support: Taking responsibility for preparing documents in response to Request For Proposals (RFPs) from clients. This will involve speaking to various people in the different horizontals of your company (i.e if it is a Testing project, call up the Testing Head) to collect all the relevant materials demonstrating your company’s credentials for the project, and tailor them to the requirements of your client.
The last two roles don’t require client interaction, while the first gives you a real taste of consulting.
We’ll be back with some dope on other job profiles and tips to clear consulting interviews..
– Shyam Sunder Ramakrishnan
(The author is an alumnus of IIM Indore, and has worked with Cognizant Business Consulting in the past.)
Perspectives – Career perspectives from those who have faced the battles and reached the top.