management consultancy: an overview · what is management consultancy? “the creation of value for...
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Management Consultancy:
An Overview
Dr. Joe O’Mahoney
www.consulting-ideas.com
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Me…..
• 12 years as consultant
• 6 years researching consultancy
• Taught 1500+ MBA students
• Publishing: journals, books & articles
• www.consulting-ideas.com
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1. Industry Background
2. Industry Trends & Challenges
3. Careers: Background & Trends
Agenda
Management
Consultancy
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Industry Background
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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
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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
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By Geography: a $300bn pie
N.America51%
Europe32%
Asia14%
Others3%
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By Sector
Financial Services26%
Public Sector25%
Energy & Utilities17%
Health15%
Comms & Media10%
Retail7%
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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
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Who clients buy from:
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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
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100 years of growth…..
$(bn)
300
200
100
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Until….
($bn)
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Worldwide
• EU & US roughly $100bn, but flat growth
• Growth in Asia & S.America
• Increasing competition from India & China
• Strategic & varied globalisation by consulting firms
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StrategyProgram
ManagementImplementationOperation
PWC / EY
ADL, BCG
McKinsey
Bain & Co
Accenture / IBM
KPMG / Deloitte
Siz
e
Accenture / IBM
PWC / EY
KPMG / Deloitte
ADL, BCG
McKinsey
Bain & Co
ADL, BCG
McKinsey
Bain & Co
So……Who’s doing what?
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What is doing well in 2012?
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Industry Trends & Challenges
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Industry Trends
• Sophisticated clients
• Procurement
• Increased competition
• Fewer partnerships
• Commodified Products
• Lower Fees, Pay & Margins
• Demonstrating value
• Higher utilisation
• Pressure on innovation
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What does this mean for Careers?
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MBA: Top Companies to Work for 2011
1. Google
2. McKinsey
3. Boston Consulting Group
4. Bain & Co.
5. Amazon
6. Deloitte
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Salaries by Qualification & Sector
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Av. International Consulting Salaries ($)
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
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30% of Top MBAs ���� Consulting
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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
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Career Structure
• Analyst
• Consultant
• Associate / Senior
• Project Leader
• Principal Consultant
• Partner Sell &
Manage
DeliverGrinders
Minders
Finders
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Easy to
RecruitDifficult to
Recruit
Most
Required
Least
Required
Consultant
Partner
Senior
Consultant
Principal
Consultant
Analyst
Project
Leader
By Grade…
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Easy to
Recruit
Hard to
Recruit
Increasing
Staff
Decreasing
Staff
Financial Services
Manufacturing
NGOs
Public Sector
Services
By Sector…
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Skill Shortages
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Listening more important than math……
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Training (average hours / year)
35
37
39
41
43
45
47
49
2007 2008 2009 2010 2011
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Utilization rates 2009-11
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Av. Lifespan: 7 years (all), 5 years (MBA)