The big news stories dominating the Management Consulting industry are all related to the current global economic crisis. The recession is the news story in business in decades and it has produced ripple effects across just about every indu...more

The big news stories dominating the Management Consulting industry are all related to the current global economic crisis. The recession is the news story in business in decades and it has produced ripple effects across just about every industry, including Consulting. Some of the stories resulting from the recession's effect on the Consulting industry include:

- Negative impact on client companies in several industries (including automotive, airlines, energy, and retail)

- Consolidation within the Consulting industry as a strategic response to the down economy

- HR moves at Consulting firms in an effort to "right-size" due to potential pull-back by existing and propective clients
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Some trends that will drive growth in the industry over the next 12-24 months are:

- Consolidation among firms: M&A activities aimed at adding competencies, leveraging shared industry/functional strengths, promoting efficiency in...more

Some trends that will drive growth in the industry over the next 12-24 months are:

- Consolidation among firms: M&A activities aimed at adding competencies, leveraging shared industry/functional strengths, promoting efficiency in operations.

- Innovation in solving business problems: The current economic crisis is something that hasn't been seen for decades. Firms that develop innovative solutions will be presented with significant growth opportunities as client work toward an economic recovery.

- Entrepreneurship: Down economies often present the best opportunities for launching one's own business and that will likely happen in the current case. With so many talented professionals having been laid off, many people have turned to independent consulting/contracting as a means to make a living without a corporate paycheck. Chances are that many of these independent consultants will incorporate and form small boutique firms that will add to overall industry growth as the global economy recovers in the next 12-24 months.
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Some of the challenges currently facing the industry are:

- The war for talent between Consulting firms and with companies in other industries (investment banking, financial services, technology, etc.)

- Opinion among some ex...more

Some of the challenges currently facing the industry are:

- The war for talent between Consulting firms and with companies in other industries (investment banking, financial services, technology, etc.)

- Opinion among some existing and prospective clients that Consulting fees are a discretionary, non-core expense that should be reduced or eliminated in the face od a down economy

- Perception issues for Consulting in the greater overall market related to the current economic downturn

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Specific titles vary from firm to firm, but the individual roles are usually as follows:

- Analyst: Entry-level consulting role with candidates usually coming in straight from undergrad; Often a two-year program with Analysts expecte...more

Specific titles vary from firm to firm, but the individual roles are usually as follows:

- Analyst: Entry-level consulting role with candidates usually coming in straight from undergrad; Often a two-year program with Analysts expected to venture off and get some other experience (different job, grad school, etc) before coming back as an Associate; Role involves strategic analyses, participating in team problem solving, client interaction and leadership, and communication of recommendations and analyses

- Associate/Consultant: Candidates often come in after business school or some other graduate program, but there are also cases where Analysts are promoted directly to Associate and others when candidates come in as experienced hires from other industries; Role involves the same sort of tasking as the Analyst, but there's an expectation of greater business knowledge/insight and greater role in client leadership; People usually stay in this role for 2-4 years, depending on the firm

- Manager: At this point, the consultant start driving the problem solving effort and leverages the work of the Analysts and Associates to do so; Role involves high-level problem structuring, resource allocation, process management, direct client leadership, "managing upward", and providing quality control on final deliverables; People usually stay in this role for 2-3 years, depending on the firm

- Associate Partner: Transition role between Manager and Partner where a person begins to add value to multiple teams and/or clients concurrently; At this point, the consultant also takes a greater role in business development and selling work for the firm; By this point, the consultant should have developed an area of functional and/or industry expertise that he/she will leverage as a platform to work toward a promotion to Partner; Consultants usually stay in this role for 2-4 years, depending on the firm

- Partner: The "mountain top" of the consulting industry; Partners work to balance the tasks of maintaining the client relationship at the highest levels, working to sell work at current and prospective clients, and provide value to individual project teams (which are often geographically dispersed); Partners are relied upon for their industry and functional expertise often drive the problem solving effort of on-the-ground team based on their previous experiences in addressing similar client issues
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Consulting is a "people business" and, as such, the majority of each firms cost structure goes toward salaries and benefits for staff. So, on the cost side, the primary drivers of profitability are compensation/benefits expenditures and uti...more

Consulting is a "people business" and, as such, the majority of each firms cost structure goes toward salaries and benefits for staff. So, on the cost side, the primary drivers of profitability are compensation/benefits expenditures and utilization of consulting staff. Compensation can vary from person to person, but usually stays within a certain range for staff in a given role. The utilization point is a key one because the goal should be to have consultants staffed on projects more often than not so they can generate revenues to account for their individual people costs. That said, consulting firms usually keep a close watch to make sure consultants don't end up with utilizations that are too high, which brings about the risk of burnout.

On the revenue side, companies focus on the number and duration of projects and the pricing of each of those projects. The goal of the Partners (and often the Associate Partners) is to strike a balance between these factors to maximize revenue to be booked while concurrently building a backlog of work that will generate more revenues in the future. Also, an important issue on the revenue side is the length of relationships with clients, which reduces the effort to sell new project work and allows teams to leverage institutional knowledge built up over time.  less

According to Wikipedia, "Currently, there are four main types of consulting firms:

1. Large, diversified organizations that offer a range of services, including information technology consulting, in addition to a strategy consulting...more

According to Wikipedia, "Currently, there are four main types of consulting firms:

1. Large, diversified organizations that offer a range of services, including information technology consulting, in addition to a strategy consulting practice (e.g. Accenture, Capgemini, Deloitte, IBM). Some very large IT service providers have moved into consultancy as well and are also developing strategy practices (e.g. Wipro, Tata, Infosys)

2. Medium-sized information technology consultancies, that blend boutique style with some of the same services and technologies bigger players offer their clients (e.g. IDS Scheer, arinso).

3. Large management and strategic consulting specialists that offer primarily strategy consulting but are not specialized in any specific industry (e.g. Bain & Company, Booz & Company,McKinsey & Company, The Boston Consulting Group, Oliver Wyman, A.T. Kearney).

4. Boutique firms, often quite small, which have focused areas of consulting expertise in specific industries, functional areas or technologies (e.g. Heidrick & Struggles, Towers Perrin, the Avascent Group, Newton Industrial Consultants, Kaiser Associates) . Most of the boutiques were founded by famous business theorists. Small firms with less than 50 employees are often referred to as niche consultancies (e.g. Agility Works, iProCon HCM). If they have a unique concept and market it successfully, they often grow out of this segment very fast or are bought by larger players interested in their knowhow."

It's difficult to provide strengths and weaknesses of all of the players in the industry because I've only worked at two of the large consulting firms. Also, the determination of strengths and weaknesses for specific firms are rather subjective. When evaluating a firm, a prospective hire should look at several factors that could be indicators of job satisfaction and interest in the role, including company culture, specific area(s) of focus, growth potential and advancement opportunities within the firm, brand in the overall marketplace, and methods used in completing projects.  less

Some good ways to get smart about this industry are as follows:

- Review the Management Consulting sections of general business sites, like Vault.com

- Visit sites or read periodicals devoted to the Consulting industry to le...more

Some good ways to get smart about this industry are as follows:

- Review the Management Consulting sections of general business sites, like Vault.com

- Visit sites or read periodicals devoted to the Consulting industry to learn about industry, such as ConsultingMagazine.com and its companion periodical

- Read case interview prep guide books to get an idea of the type of problem solving and issue analysis used at Management Consulting firms (examples include "Case in Point" and "Ace the Case")

- Review corporate websites of a range of consulting firms across specializations and company sizes

- Read books focused on the type of work done in Consulting firms (examples include "The McKinsey Way" and "Perspectives on Strategy From the Boston Consulting Group") less