The Role of Consulting
in Achieving Business
Success
Dr. Francine Schlosser
Odette School of Business
1
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
2
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)
3
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
4
Summary Stats for Ontario
(CANSIM data Table 360-0001)
Management Consulting Operating Revenues and Expenses
4000
dollars x 1,000,000
3500
Operating revenue (dollars x
1,000,000)
3000
2500
Operating expenses (dollars
x 1,000,000)
2000
1500
Salaries, wages and
benefits (dollars x
1,000,000)
1000
500
0
1998 1999 2000 2001 2002 2003 2004
Years
Operating Profit Margin has increased from
18.5 to 21.2%
5
Nature of Consulting in Windsor
5416 Management, scientific and technical consulting service
2001 Census
Table 5
Number
Total Labour Force
Total
Male
Self Employed
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
Ontario
100
0.3492
Windsor
100
0.252
A % of total consult
6
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)
7
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)
8
For Clients…
9
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 2004/5
Cocheo, ABA Banking Journal 2005
10
For consultants….
11
Industry Entry
• Low barriers to entry
• Little or no regulation
• Relatively few or no formal
certification requirements
12
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 2003
Niewiem and Richter, Business Strategy,
2004
13
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
14
Targeting your market
You
Staffing
execs
Staffing
casuals
Staffing
hourly
?
?
?
Competitor x
1
Competitor x
2
x
x
15
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
16
Entry and Promotion
•
•
•
•
•
•
Publish
Seminars, training and workshop leads
University affiliations
Alumni groups
Pro bono work
Use other professional contacts
(accountants and lawyers)
17
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
18
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
19
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
20
Opportunities in Windsor….
21
Develop relationships with peers
and clients in Windsor…
22
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?
23
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)
24
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
25
Three Paths to CMC
1.
2.
3.
Entry path (candidates less than 8 years
experience)
CAMC approved MBA path
Experienced Path
Consider needs and roles of University of Windsor and
of professional consultant partners
www.camc.com
26
Be current in your service
offering! Find your niche!
Keep an eye on new business
environment developments….
27
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
28
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
29