Consulting Industry
A consultant is a professional who provides professional or expert advice in a particular area
such as management, accountancy, human resources, marketing, medicine, finance, economics,
engineering, or waste management. A consultant is usually an expert or a professional in a
specific field and has a wide knowledge of the subject matter. There is no limit about the types of
consulting. Some major types of consulting are management consulting, HR consulting,
marketing consulting, financial consulting etc.
Facts & Recent Trends
Global consulting industry revenues (including HR, IT, strategy, operations management and
business advisory services) will be about $345 billion in 2010, according to Plunkett Research
estimates. This represents a rebound from about $310 billion in 2009 and $330 billion in 2008.
In the U.S., accounting and related services (such as tax preparation), generated an additional
$119.7 billion in 2009, down from $128.4 billion in 2008, according to the U.S. Bureau of the
Census.
Consulting is a somewhat cyclical industry. After a decade of sizzling growth and enviable
profits, the consulting business was forced to pull in its reins during 2001-2003. The stock
market bust of 2000-2001, particularly in the technology and telecommunications sectors, caused
this setback. Startup companies that were once lucrative consulting clients disappeared under
crushing financial losses. Meanwhile, a general economic slowdown in most of the developed
world further hampered the consulting industry.
Consultancies posted significant growth from 2005 through 2007. However, 2008-2009 marked
a challenging period, in light of the global economic slowdown and shrinking corporate budgets.
Government budgets have been under pressure as well, at the state and local level, where large
deficits loom and tax revenues are down. Corporations, large and small, have been slashing
spending, employment and capital investment in a sometimes desperate attempt to pay down
debt while cutting costs. This has been particularly hard on some consulting sectors, since
corporations and governmental agencies are prime clients for consultancies. In general, major
consulting companies found themselves with substantial drops in business during 2009, in many
cases 5% to 10%. Some companies cut their employee rosters and/or restrained hiring.
However, as of late 2009 and early 2010, corporate profits in general had grown substantially,
meaning that executives may be more willing to authorize new consulting projects as long as
they see the potential for a good return on the cost.
Firms are looking for consultants with very specific knowledge in areas like logistics
management, knowledge management, data warehousing, multimedia, client-server
development, sales force automation, electronic commerce, brand management and value
management.
A new trend in consulting is to include members of the management of the client firm as part of
the consulting team. This eases implementation of recommendations and can commit the client
to buying into new ideas.
Relationship consulting" is on the rise. This involves working with a company over many years
to ensure continued monitoring, discussion and implementation of new ideas.
Future of Consulting Industry
1) Government-funded economic stimulus funds will boost business in certain sectors that will
produce new consulting projects, such as:
a) Major transportation infrastructure projects (including high-speed trains)
b) Health care reform, particularly a new focus on digital health records
c) Renewable energy projects, including biomass and advanced solar installations
d) Research and development projects in many fields, including advanced battery technology,
biotechnology and nanotechnology
2) Consultancies that focus on projects that clearly reduce business costs and enhance operating
ratios in a reasonably short period of time will find a ripe market (such as, consultants who focus
on cash flow enhancement, supply chain efficiency and manufacturing efficiency).
3) Consultancies that have deep experience in debt restructuring and financial workouts will
remain in high demand, particularly in the fields of commercial real estate and debt-financed
mergers and acquisitions.
4) Vast new labyrinths of government regulation, government investment and partial
nationalization of the U.S. auto industry will create numerous opportunities for consultants who
can show companies how to navigate rapidly changing relationships between government and
certain industries, or deal with government oversight.
5) Consultants who assist firms in lowering employee benefits costs are in high demand.
6) Consultants in environmental specialties, such as carbon emissions, and energy efficiency will
be in high demand.
Comparative Analysis
http://www.slideshare.net/sumeet85/consulting-in-india-the-present-and-the-future
http://www.businessgyan.com/node/1002
http://www.brijj.com/group/management-consulting--presentation--Consulting-Industry-In-India-
Problems-Solutions-Opportunities?eid=297852
http://www.consultingnetwork.co.in/indian-consulting-market-an-insight-into-the-factors-restricting-
growth/857/
http://www.scribd.com/doc/12998751/Analysis-of-Consulting-Industry
http://www.plunkettresearch.com/consulting%20market%20research/industry%20overview
