management consultancy: an overview · what is management consultancy? “the creation of value for...

Management Consultancy:

An Overview

Dr. Joe O’Mahoney

www.consulting-ideas.com

Me…..

• 12 years as consultant

• 6 years researching consultancy

• Taught 1500+ MBA students

• Publishing: journals, books & articles

• www.consulting-ideas.com

• joeomahoney@gmail.com

1. Industry Background

2. Industry Trends & Challenges

3. Careers: Background & Trends

Agenda

Management

Consultancy

Industry Background

What is Management Consultancy?

“The creation of value for organisations, through the application of

knowledge, techniques and assets, to improve business performance.

This is achieved though the rendering of objective advice and/or the

implementation of business solution”

(MCA 2010)

Identifying a problem

Researching and recommending a solution

Helping implement that solution

IT Systems

Development

Outsourcing

Services

Outsourcing

AdviceIT Consulting

Tax

Audit

Finance

Engineering

Asset

Management

Infrastructure

“Pure”

Management

Consuting*

*Program/Project Management, Strategy, Change

Management, Human Resources, BPR, Operations, Marketing,

Corporate Communications

Defining Management Consultancy

By Geography: a $300bn pie

N.America51%

Europe32%

Asia14%

Others3%

By Sector

Financial Services26%

Public Sector25%

Energy & Utilities17%

Health15%

Comms & Media10%

Retail7%

Implementation

- IBM

- Accenture

- Cap Gemini

Strategy Consulting

- McKinsey & Co.

- Boston Consulting Group

- Bain & Co.

Program Management

- Deloitte

- PWC

- E&Y

- KPMG

Board Level

- Strategy

- Business Case

- Vision

Management Level

- Project Management

- Program Management

- Planning

Operations Level

- Systems Interation

- Training

- Process Work

HIGH VOLUME

LOW VALUE

HIGH INVESTMENT

HI-VALUE

LOW-VOLUME

MED-VOLUME

MED-VALUE

Segmentation by Focus

Who clients buy from:

Growth of the Big 4 (% of total revenue - 2011)

23%

26%

32%

36%

0 10 20 30 40

PWC

Ernst & Young

KPMG

Deloitte

• 2004 – ave. 24% of total revenue

• 2011 – ave. 31% of total revenue

100 years of growth…..

$(bn)

300

200

100

Until….

($bn)

Worldwide

• EU & US roughly $100bn, but flat growth

• Growth in Asia & S.America

• Increasing competition from India & China

• Strategic & varied globalisation by consulting firms

StrategyProgram

ManagementImplementationOperation

PWC / EY

ADL, BCG

McKinsey

Bain & Co

Accenture / IBM

KPMG / Deloitte

Siz

e

Accenture / IBM

PWC / EY

KPMG / Deloitte

ADL, BCG

McKinsey

Bain & Co

ADL, BCG

McKinsey

Bain & Co

So……Who’s doing what?

What is doing well in 2012?

Industry Trends & Challenges

Industry Trends

• Sophisticated clients

• Procurement

• Increased competition

• Fewer partnerships

• Commodified Products

• Lower Fees, Pay & Margins

• Demonstrating value

• Higher utilisation

• Pressure on innovation

What does this mean for Careers?

MBA: Top Companies to Work for 2011

1. Google

2. McKinsey

3. Boston Consulting Group

4. Bain & Co.

5. Amazon

6. Deloitte

Salaries by Qualification & Sector

Av. International Consulting Salaries ($)

Junior Senior Manager Principal Partner

Australia 84,046 125,875 157,347 216,265 304,886

USA 72,547 110,011 136,593 189,502 280,150

Europe 72,867 110,921 137,438 191,224 286,697

UK 66,422 102,214 127,971 180,084 262,442

30% of Top MBAs ���� Consulting

Terminology

McKinsey Bain BCG BAH Oliver Wyman

Business Analyst Associate

Consultant

Associate Consultant Analyst

Senior Business

Analyst

Senior Associate

Consultant

Senior

Associate

Senior

Consultant

Consultant

Associate Consultant Consultant Associate Associate

Engagement

manager

Case Team

Leader

Project

Leader

Senior

Associate

Senior

Associate

Associate

Principal

Manager Principal Principal Principal

Partner Partner Partner Partner Director

Career Structure

• Analyst

• Consultant

• Associate / Senior

• Project Leader

• Principal Consultant

• Partner Sell &

Manage

DeliverGrinders

Minders

Finders

Easy to

RecruitDifficult to

Recruit

Most

Required

Least

Required

Consultant

Partner

Senior

Consultant

Principal

Consultant

Analyst

Project

Leader

By Grade…

Easy to

Recruit

Hard to

Recruit

Increasing

Staff

Decreasing

Staff

Financial Services

Manufacturing

NGOs

Public Sector

Services

By Sector…

Skill Shortages

Listening more important than math……

Training (average hours / year)

35

37

39

41

43

45

47

49

2007 2008 2009 2010 2011

Utilization rates 2009-11

Av. Lifespan: 7 years (all), 5 years (MBA)