Background and Definition
Management consultancy may be defined as a firm that has set of techniques to support its business and skilled workforce that does the various kinds of tasks needed by the respective clients. This has gradually grown and has occupied a significant presence at the global level. Clients rely on such firms for their different business related activities like the marketing, IT, finance, HR and much more. They are also being consulted to get the helpful strategies, so that, the client firms could become more competitive and could reduce the risk of rising market competition (Brandon-Jones et al. 2016). The concept can be analyzed with the help of lectures and the textbooks that have been provided as references. However, the study could also be justified by going with the self-analytical skills in the light of various journals and the trusted website resources. The study focuses on the relevant journals and the websites to fulfill the purpose of the paper, which is to understand & analyze the management consultancies and its contemporary challenges. Moreover, such management consultancies may also be judged based on innovative approaches that distinguish one consulting firm from various others.
Management consultancies have grown in existence with an increasing approaches which most business firms adopt nowadays (Khuong, Harindranath and Dyerson 2014). Management consultancies are being approached to get their extensive assistance on managerial skills which are their core expertise. On the other side, the consulting firms have competitions in them with one another. This is for a fact that top companies prefer only the high-rated consulting firms. Moreover, cost-effectiveness and the use of innovative approaches are the two most identified factors when business firms conduct a market research to get the best consulting firm for their needs (Kabir and Sumi 2014).
After defining the concept of management consultancies, it is important to know how both of the business and the consulting firms approach each other. Consultancies are generally believed to have a few approach strategy, which also includes a traditional approach. The traditional approach is governed by a fact that management consultancies do publish articles related to an identified issue in the chosen market segment. The publishing of an article in this way helps to catch the attention of clients that face the highlighted challenges as depicted in the published article (Manville, Matthias and Campbell 2017). This is nothing but a very smart piece of work that enables the consultancies to identify the selling issues and its relevant market. Nevertheless, consultancies do a lot of extensive research works in order to identify the most shouted problem in the chosen market (Manville, Matthias and Campbell 2017). The consulting firms pick up the few topics and then revolve around those by publishing several articles on it. This is done to catch the attention of business clients. Moreover, consultancies with this strategy are able to establish their good image which also helps to catch the business clients (Manville, Matthias and Campbell 2017). The fact also establishes the importance of innovation, which is needed to identify the right market and a most sought issue relevant to the chosen market (Miozzo et al. 2016).
Approaches to Management Consultancies
The value proposition can be defined as a contemporary process that helps to catch the attention of the target audience (Covin 2015). In the chosen market where two different firms are meeting each other to serve their distinguish purposes, it is highly required for the concerned firms that they have effective value proposition strategies (Covin 2015). The value proposition proposed by the consulting firms will help to attract the attention of clients. On the other hand, the client companies need to have an effective value proposition strategy, so that, it could make its issues communicable to the targeted or the unknown consulting firms (Covin 2015).
Value proposition message should be distinguished in nature as this will help the target clients to understand the importance of the message. Nonetheless, managing consultants need to show that they are the fittest firm to resolve the identified issue. On the other hand, the client company needs to establish a fact that they need a consulting support on the identified issue (Chandler and Lusch 2015). Purposes are the same; however, the needs appear to be different. This is understandable also as consulting companies need the clients to make it business running and growing steadily. On the other hand, the client companies require an external agent that could resolve its issues or could also design the strategies needed to attain a competitive advantage (Chandler and Lusch 2015).
Innovation can be defined as a process that is used to enhance the business competency and narrow down the market competition. The contemporary business requires the use of innovation at the various levels in order to mitigate the operational challenges and improve the business performance (Lee, Kao and Yang 2014). Innovation is indeed requiring the most of the consulting firms. This could be for many reasons such as satisfying its employee needs and the fulfilling the demands of the clients. In both such cases, relevant innovation will be of different forms and be used for different purposes (Lee, Kao and Yang 2014).
Employees at the consulting firms are needed to be well versed with an extensive set of skills that helps to analyze the business with much effectiveness. Moreover, innovation will be needed while recruiting the professionals to nurture them to help them become a skilled professional (Harrison et al. 2014). Innovation in terms of employees may be required for having an updated format of reaching to a wider applicant. In addition to this, innovative approaches will also be required during the professional development program to make it an interesting and engaging activity for them (Harrison et al. 2014).
The Value Proposition
Innovation is indeed highly required in attracting the attention of employer or the clients. This is so because there is number of consultants available in the market. There should be a valid reason why the clients from the target market will approach the concerned consultancy. Such valid reason will be the professional competency level which will be developed by implementing innovative thoughts in regards to the existing circumstances (Boudreau and Lakhani 2015). Innovation is required at the different stages like at the time of designing an appropriate value proposition strategy, so that, it could communicate the eligibility to the clients in the target market (Boudreau and Lakhani 2015). It is also required for being experts in the different activities like marketing and the IT-related activities. For such purposes, innovation will be needed to understand the latest technologies for marketing and IT activities (Boudreau and Lakhani 2015).
The innovation of the consulting firm will be beneficial for the clients when it approaches the selected consulting firm. Innovation in this circumstance will help to get the required work done from the consultancies. However, on the other hand, the use of innovation in consulting firms will also attract the various other clients that may be threatening to the concerned company. Market competition will then be increased and may prove to be a potential threat to the existing firm (Boudreau and Lakhani 2015).
The Consultancy Value Framework developed by the MCA is helpful for the clients in analyzing the level of support that the client firms will get from the consultancy (Consultancy Buyers Forum 2018).
The above figure does very well establish an understanding of how the clients get to know the various helps that it will receive from the selected consultancy. The value framework has been divided into few segments like the business needs, what consultancy brings in regards to the different business needs, what all that leads to and the creation of results (Consultancy Buyers Forum 2018). The framework has identified the several business needs that will serve the purpose of the clients in the target market.
Innovation has been given high importance in the consultancy value framework. This was the use of innovation only that helped to distribute the framework into the four most communicable stages included in this model. The framework was able to know the different business needs, which will serve the needs of the target clients. Innovation is also important for the management consultancies to enable it to become much more competitive in the industry. The framework has highlighted some important contributions of consultancy in resolving the issues of its clients. Those contributions are the capability, the knowledge and the insight (Kogan et al. 2017).
The Importance of Innovation
The capability identified in the consultancy value framework will be competent in nature if it has been supported with an up-to-date innovative approach. The capability will be enhanced if the consulting firm has expertise in multi-domains like the marketing, finance, HRM and other activities. For an example, the consulting firms are required to have its acquaintance with the different marketing modes like the online marketing and the digital marketing (Gubiniova and Bartakova 2017). In terms of the financing works, the consulting firm will require having a thorough knowledge of the accounting works. Nevertheless, the knowledge will be delivered by the employees who work for the consulting firm. For such purpose, skilled employees will be needed. A consulting firm may have the skilled workforce if it is able to use the latest technologies to reach to larger applicants at the time of recruitment process and is able to train its employees to nurture them with the latest knowledge on the consulting works (Kogan et al. 2017).
The approachability or the insight is another thing that can effectively raise the competency level of a management consultancy. Approachability can be increased in numerous ways like by giving easy access to the clients or by using innovative technologies that could influence the concerned client’s perception (Bloom, Draca and Van Reenen 2016). Business clients approach to different consulting firms because such consultancies have expertise in handling challenging situations. On the other hand, business companies look for the consultancies which have proven records in the required field (Bloom, Draca and Van Reenen 2016).
Clients can assess the value of working with the chosen consulting firm by analyzing the different stages involved in the selected framework (Serra and Kunc 2015). The framework supplies the few very important parameters that can be used to judge the effectiveness of the chosen consulting firm. Moreover, in this way a highly appropriate consulting agency will be identified (Serra and Kunc 2015). Assessment can also be done by following the ratings of the consulting firms. Ratings and the experience level will both help to make the assessment at the time of selecting the consultancies or after the consultancies have performed its work (Serra and Kunc 2015).
The consultancy offers values to its clients in several forms like the capability, the knowledge, and the insight. It offers a very skilled workforce which takes care of the different consulting works like marketing, human resource management, IT and the finance. A skilled workforce will be able to design an effective marketing plan which will ensure a probable success at the time of launching a new product or in representing the existing product (Bryson et al. 2017). A skilled workforce will be able to present the best accounting solution for the different accounting related issues. Accounting related tasks can be like the taxation, balance sheet, and others. This will also provide the IT related solutions like supplying knowledge on the latest technologies that could help the clients in improving its efficiency and the competency level (Bryson et al. 2017).
The Consultancy Value Framework
One consulting firm will compete with another in regards to its strategic capability, subject knowledge, and the approachability level. Different consulting firms will have the variable level of competency measurable in regards to different resources like the physical, human and the technological resources. Nevertheless, consultancies do not make sufficient investments to improve its business capabilities. It rather depends much on the skilled workforce, which helps such firms in completing the different activities. There is a need to invest much in improving the technological and the infrastructure capability. Indeed, such improvements will attract innovative approaches that will bring the difference between each of the consultancies (Khuong, Harindranath and Dyerson 2014).
Knowledge is the other domain where competing consultancies can create values by having a distinguished level of knowledge management. Consulting firms rely much on its employees (Back, Parboteeah and Nam 2014). It has already been stated from the “consultancy value framework” that employees in consultancies do build up the knowledge blocks (Back, Parboteeah and Nam 2014). If one consulting firm has much competitive workforce than its competitors, it will definitely get the advantage of the market. The advantage will thus be evident in the form of market values.
Added or additional value in the context of consulting will be referred to the benefits that it provides to its clients (Niñerola et al. 2016). Clients indeed approach such consultancies when there is a need to have an enhanced business capability. Clients those which approach the different consultancies do have some pre-existing values especially in case of multinational companies. This is why those firms have been able to sustain its business. However, the intention of moving to a consultant is to attain the maximized potentialities that are hardly practical due to the limitation of various resources to the clients (Niñerola et al. 2016).
There are various circumstances where employing a consultant will yield a much reduced potential value to the clients. One of such circumstances is a market that has become saturated with a particular product or the service (Lalonde and Adler 2015). In such circumstance, this will be advisable to, not to approach the consulting firms as products or the services have already been stagnant in the market of operation. It is indeed beneficial to move to the consulting firm when there is a need to launch a new product or a service (Lalonde and Adler 2015).
Another circumstance can be like the target consulting firm does not have the competitive resources. Such decision will also produce a less potential value to the business (Kabir and Sumi 2014). This has already been stated with the help of the consultancy framework that the consulting firms need to have a sound knowledge of the process. The identified quality will only be realized if the consulting firm has the skilled workforce. It is indeed necessary to approach to a right consulting firm, which has capable management & the infrastructure facilities and the skilled workforce. Such consultancies with its prior experience in the same field will add highest values to the clients (Kabir and Sumi 2014).
Cost-effectiveness is the other factor which can establish a circumstance where consultancies will appear as if like it provides very less values to the client’s needs (Beaumont, Maynard and Butt 2015). For an example, tasks have been given to a consultant that asks for higher money than the others. The client was not able to identify whether the decision was valuable and went ahead with the deal. Such circumstance may not produce the expected values to the client’s requirements (Beaumont, Maynard and Butt 2015). This will be a loss of not only the investment but will also be of the values that could have been delivered if it had approached the most appropriate consultancies.
The consultation will also yield fewer values if it has not approached at the appropriate time (Bens 2017). In the contemporary world, there is a need to make quick decisions in order to be competitive and to take the advantage of the available opportunity. However, if during such times consultancies are not being approached then others will capitalize on the opportunity and will take the advantage away from the organization in concern (Bens 2017). In such circumstance, this will be less productive and have fewer values as well to move to a consulting firm. Such organizations will get to know the strategies that have already been used by the others. Moreover, productivity will be quite less as chances are higher for a reduced opportunity by the time the company in concern approaches the consulting firms (Bens 2017).
Conclusion:
To conclude, consulting firms have become a very good option for the contemporary organizations using which they capably pose a competitive fight to its respective rival companies. Consulting firms have become a great resource for getting equipped with the utmost capabilities and the knowledge that it may or may not attain on its own. Such organizations may not have the required resources or it may not have the relevant workforce that could produce the desired result. This is one of the reason why business firms approach to the management consultancies. Another reason for approaching the consulting agencies is the increased market competition. Every single company, in particular, the multinational companies look for an improved solution to its day-to-day challenges. Nevertheless, there are different other requirements like to get innovative ideas before entering a new market or bringing a new product or a service to the market. Nevertheless, organizations are getting benefitted from the numerous tasks that may not have handled by those on its resource capabilities. However, it has already been stated that options are open to other companies as well. It is indeed important to know the exact time of frame when this will be much wiser and safer as well to approach the selected consulting firms. Apart from the fact, it is also important to identify the best feasible consulting firm for the needs. There are many options; however, not all the consultancy will satisfy the needs of every single organization. Different organizations have different resource capabilities which mean that criteria for selecting the consulting firm will be different for different organizations. Some companies may not have the financial constraints that could be a barrier to others in particular to the small size companies. Those firms that have financial constraints should approach the consulting agencies that offer the most cost-effective services.
References:
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