Management Consulting B2B Marketing

Management Consulting B2B Marketing

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Table of Contents Management Consulting Globalization ................................................................................ .................................. 3 Knowledge Sharing in Consulting .............................................................................................................. ............ 3 Approaches .......................................................... ................................................................. .................................. 4 Specialisations ..................................................... ................................................................. .................................. 5 Consulting – Good or Bad? .................................................................................................................................... 7 Advantages .......................................................... ................................................................. .................................. 7 Disadvantages ...................................................... ................................................................. .................................. 7 Current State of Industry ........................................................................................................................................ 7 Future Trends and Opportunities: ......................................................... ................................................................. . 8 Consulting Pricing .......................................................... ................................................................. ....................... 9 Marketing strategy .......................................................... ................................................................. ..................... 11 The 7ps of consultancy Services ........................................................... ................................................................ 11 Consultancy Service differing fro m others: ................................................................ .......................................... 11 ABC of Consultancy Service marketing: ......................................................... ..................................................... 11 How can consultants attract more clients? ................................................................. ........................................... 13 Communicating Value: .............................................................. ................................................................. .......... 13 How can consulting firms learn more about effective marketing? ............................................................. .......... 13 What are the most important skills/aptitudes required for today's consultants? ................................................... 14 Appendix .............................................................................................................................................................. 15







Management Consulting Globalization Manufacturing firms are well down the path of globalization. Beginning about thirty years ago, global forces, such as the emergence of low-cost competitors and rapid economic development in emerging markets, began to have profound effects on the structure and performance of manufacturers. Many firms responded by moving production to low-cost countries and attempting to penetrate new markets. Today, most manufacturers grapple not with the issue of whether to move outside their home countries, but the consequences of doing so, such as managing an international workforce and catering to diverse customer tastes. The world’s service firms have been slower to globalize. For some service firms, off shoring requires a highly skilled workforce, which can significantly limit options. Other service firms 2 may find it difficult to sell overseas, as demand for their services may be weak in certain parts of the world. For example, services such as consulting and commercial banking are sold mostly to large corporations and are virtually non-existent outside the developed economies. Firms may also find it difficult or impossible to deliver highly skilled services remotely, necessitating global operations. This ushers in a host of issues related to finding and training local talent. All of these obstacles have conspired to limit the responses of many service firms to global forces.

Revenue drivers of globalization:   

Client expansion Indigenous demand Concentration of industry expertise

Cost is not a key driver. Most globalization has been reactive, not proactive.

Knowledge Sharing in Consulting To be successful at the present time, it is imperative for global consulting companies to be knowledge intensive, apply reuse economics, create knowledge and deliver quality to keep pace with constant change. They need to harness knowledge and learn faster than competition. In order to achieve that, they need to eﬀ ectively ectively and eﬃciently organise and manage the processes of knowledge sharing internally in the organisation. Whether practised as a full time occupation or an ad-hoc service, Management consulting can







quintessential nature of consulting is to create, transfer, share and apply management and business knowledge. Knowledge transfer is concerned not only with knowledge and understating of facts and realities, but also with approaches, methods and capabilities required for the effective application of knowledge in particular economics, business, cultural, administrative and organizational environments. Management consultants can assume their roles in knowledge transfer because they have accumulated, through study and practical experience, considerable knowledge of effective ways of acting in various management solutions.

Approaches In general, various approaches to consulting can be thought of as lying somewhere along a continuum, with an 'expert' or prescriptive approach at one end, and a facilitative approach at the other. In the expert approach, the consultant takes the role of expert, and provides expert advice or assistance to the client, with, compared to the facilitative approach, less input from, and less collaboration with, the client(s). With a facilitative approach, the consultant focuses less on specific or technical expert knowledge, and more on the process of consultation itself. Because of this focus on process, a facilitative approach is also often referred to as 'process consulting,' with Edgar Schein being considered the most well-known practitioner. Many consulting firms are organized in a matrix structure, where one 'axis' describes a business function or type of consulting: for example, strategy, operations, technology, executive leadership, process improvement, talent management, sales, etc. The second axis is an industry focus: for example, oil and gas, retail, automotive. Together, these form a matrix, with consultants occupying one or more 'cells' in the matrix. For example, one consultant may specialize in operations for the retail industry, and another may focus on process improvement in the downstream oil and gas industry.







Specialisations Management consulting refers generally to the provision of business consulting services, but there are numerous specializations, specializations , such as information technology consulting, human resource consulting, virtual management consulting and others, many of which overlap, and most of which are offered by the large diversified consultancies listed below. So-called "boutique" consultancies, however, are smaller organizations specializing in one or a few of such specializations. There is a relatively unclear line between management consulting and IT consulting. There are sometimes overlaps between the two fields, but IT consultants often have degrees in computer science, electronics, technology, or management information systems while management

consultants

often

have

degrees

in accounting, economics, Industrial

Engineering, finance, or a generalized MBA (Masters in Business Administration).According to the Institute for Partner Education & Development, IT consultants' revenues come predominantly from design and planning based consulting with a mixture of IT and Business







Human resource consulting is a $18.4 billion industry that has emerged from management

consulting, as clients' needs have become more complex and specialized, widening the gap between HR needs and work force capabilities, and thus accentuating the ability of HR management consulting firms to fill this gap. While the multi-faceted nature of business sometimes causes overlap in consulting industries (i.e., with regards to human resources, general management and information consulting), the following are core fields around which most HR consultancies are based: 

Human capital , including remuneration (also called total rewards), employee rewards

and incentive programs, and talent acquisition and management 

Health & Benefits; i.e., orchestrating optimal employee health plans with the carriers

themselves 

Mergers and acquisitions , examining fit across culture, job-type, transaction costs, etc.



Communication, including surveying employee attitudes, satisfaction, engagement, and

other employee behaviours 

Retirement



Outsourcing

Services may also include legal counselling, global initiatives, investments consulting, and the implementation of HR technologies to facilitate human capital management. The HR consulting industry also employs more actuaries than any other in order to assist in their services. Virtual management , brought about by the rise of the internet, globalisation, outsourcing,

telecommuting, and virtual teams, is management of frequently widely dispersed groups and individuals with rarely, if ever, meeting them face to face. Following below is a sociological critique of certain forms of virtual management: Its major advantage, according accord ing to supporters, is to focus f ocus on the customer and the t he value chain from which the customer derives value. Its major drawback, according to detractors, is that commodity commod ity and product relations "outsourced" to developing nations do tremendous tremendo us harm. Others see benefits, but note that it tends to specialize these nations, as under colonialism, when they fed "natural resources" and "human resources" to developed nations, into narrow and limited supply roles. While seeking organisational organi sational effectiveness effectiven ess in the current cur rent capitalist mode of production, especially profit-making organisations are increasingly recognising the competitive









customers as long as possible. In addition, companies may consult users for research and development purposes to increase customer satisfaction. These operations may also be more project-based, involving organisations that may or may not formally belong to any of the units involved. All this creates new kinds of interlinked networks of suppliers, buyers, producers and customers, where the factors of production are being acquired as conveniently as possible to make deliverables that can be seamlessly supplied to the people who need them, to where and when they need them.

Consulting – Good or Bad? Consulting has its own advantages and disadvantages which a company need to weigh before opting for their services.

Advantages      

Get service of special expertise Use the service as needed without any long term commitment Save on tax contributions Save on benefits to be given to full time employees Have flexibility in the relationship. Can terminate them easier than terminating employees.

Disadvantages 

  

May not have the same continuity in the relationship as you would have with an employee. May sometimes have to pay high fees to the consultant. Have limited control over the consultant as they are not employees of the company Run the risk of tax problems if the consultant in fact operates like an employee.







firms on strategy and organization. McKinsey & Company, Inc., Bain & Company, Inc., Boston Consulting Group, Inc. and a handful of other companies are the most elite. Such firms may charge their clients anywhere from $300,000 to $1 million in monthly fees, with top consultants billing as much as $5,000 daily plus expenses, and associates at $1,500 or so. By early 2010, many European governments, from the UK to Spain to Greece, remained saddled with daunting debt loads. Higher taxes and cuts in government spending loom, and this will be hard on business in general, including consultants. In Asian nations, however, as well as Brazil, high growth in GDP and a positive business climate are creating myriad opportunities for consulting firms, both in government and private sector contracts. In North America, the U.S. appeared to be in an economic recovery by the beginning of 2010, and Canadian companies of most types remained on firm financial footing. Consultancies should see reasonable growth in these nations.

Future Trends and Opportunities: Over mid term in future, some of the opportunities and trends to be witnessed in the consultancy industry are: 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 in the U.S. 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







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.

Consulting Pricing Any service that has been provided comes with a price. And Consulting is no exception to this rule. The two common pricing models that have been popular in most outsourcing deals have been used in consulting assignments too. They are the Fixed Price Model and the Time & Material (T&M) Model. In a Fixed Price Model, the two parties (client and the consultancy) agree to a fixed sum of money to be paid as contract fee irrespective of the number of people engaged in the work. The work, as defined by the contract, needs to be performed to get the contract amount. On the other hand, in a T&M Project, the two parties agree on the rate (in monetary terms) which needs to be paid for the service provided. So, the amount to be paid by the client is not fixed, or pre-defined, and depends completely on the number of people assigned to do the work, and the total number of hours worked by each person. One important aspect that has been driving these models is the Service Level Agreement or SLA between the two parties. The disbursing of fees to the outsourcing service provider also depends on meeting the expectations of these SLAs. Although, all of these might be sound concepts theoretically, but lot of practical difficulties have been observed in the area of SLA Management. Storing and tracking the required SLA data becomes difficult at times. Also, SLA, as a concept, has not been understood in totality at the base level, thus, rendering its adherence difficult. Similarly, certain SLAs (like customer satisfaction) have ceased to be objective and measurable, and become subjective and person dependent, thus, leading to its inability to serve its purpose.







Define - Define the Key Performance Indicators or KPIs for the client organization. KPIs should be tangible and measurable, and should have the highest impact on the existence of the organization. Some of the KPIs that are adopted are Increase in Revenue, Improve in Profitability, Reduction in Lead Time, Reduction in Inventory Levels, Increase in Market Share, Better ROCE, etc.

Define the benefit target, the benefit realization timeline, and the linked payment schedule. The payments would be based on achieving the benefit targets. As a baseline for setting the benefit targets, the latest KPIs should be measured, and the cut-off date defined for accepting the KPI base values. Suggest & Implement - Analyze the existing processes and systems, and prepare a blueprint for incremental changes as well as Business Process Re-engineering. Also, an automation roadmap for the client organization is prepared.

Once the suggestions have been accepted and validated through pilot runs or simulations, hand-holding with the customer through the implementation phase is of utmost importance. Often, the client organization doesn't have enough expertise and experience to implement the solution and, thus, the beauty of the suggestion is lost. Benefit Realization - On implementation of the solution, the biggest step is reaping the benefits of the same. Benefit realization is important to both the client organization, as well as the consultant. For the client organization, it marks the repose of the faith it had on the consultant, and starting of tangible benefits to its firm. For the consultant, it marks the start of the payment schedule and return on investment in the project. Optimization - After incorporating the changes as a part of the new solution, the biggest challenge that many client organizations face is to institutionalize it. Unless the changes are institutionalized, the benefits derived from the solution are temporary at the maximum. So, consultants continue to work with the client organizations to ensure that the benefits are not short-term. So continue to work with the client to ensure continuous benefit realization.

The consultancy company also benefits from this model: -







Marketing strategy The 7ps of consultancy Services



Product: Experience of the consultants, his knowledge and expertise on the subject.



Price

: Trust and believe of the clients is mor e important for the aspect of pricing. “Value

based pricing is followed” i.e. the more the value created for clients, the more profitable the

pricing is. 

Place : As the service delivered is more at the place of the clients and the service is inseparable from the consultants



Promotion: Promotion can be done through personal sales, publicity, advertising, direct mail and tel-marketing.



People: The service delivery depends upon interpersonal skills, aptitude and service knowledge of the consultants.



Process: The efficient service delivery process is the differentiating factor.



Physical evidence : The sight of o f service provision and the how a consultant carries himself

Consultancy Service differing from others:

•

Not Regulated by Statute and lack of formal institutionalization

•

Management consultants lack an authoritative body of knowledge

•

Quality of the services cannot be assessed prior to the assignment

•

Consultants co-produce the outcomes, in a process of mutual learning and cooperation

This makes the cas e for “Relationship Marketing” .

ABC of Consultancy Service marketing:









A (Assess the Situation)

C(Contact Potential Clients)



B(Build a Potential Client Base )

Assess the Situation: Examine internally your organisation and externally client’s

organisation and also the competition. A ll the above determines the marketing mix. 

Build a Potential Client Base Base : To determine which client to target and with what marketing techniques



Contact Potential Clients : This is actually the sales part of marketing process .In this following come across opening and closing of sales , cold calls and rain making .







How can consultants attract more clients? Clients are under increasing cost pressure to cut expenses. They are examining their health, legal and consulting bills more critically. They want value for their money. This should not be a threat to a consulting firm. A consulting firm cannot last that wants revenue without generating proportionate value. The consulting firm's challenge is to constantly figure out how to generate more client value per dollar of cost, and to demonstrate this. Whenever possible, the consulting firm should estimate the ROI value they hope the project will create for the client. Consultants need to identify the specific clients they want to acquire. It needs to distinguish between soliciting business and positioning itself for business. The latter is much better and consists of building a reputation for doing something so well that word of mouth acts as the soliciting force, not sales calls. Consultants can generate buzz through giving speeches, writing articles, and joining organizations and soon word of mouth will convey their true reputation. Clients like to believe that their consultants, especially those on retainers, are thinking about their businesses. Smart consultants will send occasional articles that they come across that might interest a client. They may go further and send articles that would have more of a personal, non-business interest for the client. One consultant who works with a major candy company is in an enviable position. The candy company found his ideas to be so useful that they said to him: anytime you want to think







What are the most important skills/aptitudes required for today's consultants? The most important skill is client relationship management. Some people have a natural aptitude for gaining trust and respect from their clients. They are caring and sensitive people, good listeners and learners, and good problem solvers. The firm that hires more of these people will succeed regardless of other things. Build a good database on each client's activities, interests, opinions, and other pertinent information. This will enable the firm to customize its services and communications to each client. The firm's marketers must also develop brand-building skills that go far beyond brochures and advertising. Brand building also occurs through event management, sponsorships, and contributions to good causes and other activities.







Appendix 1. http://division.aomonline.org/mc/contemporary%20consultant%20toc.pdf 2. http://www.managementconsultingnews.com/interviews/kotler_interview.php 3. http://books.google.co.in/books?id=Wzjb55Gv5zoC&pg=PA265&lpg=PA265&dq=I ntervention+Strategies+in+Management+Consulting&source=bl&ots=OWpi1N6BIh &sig=IRvMYkHiOPPkSn_6RYBG8HaGeXI&hl=en&ei=KfMITenPGYfWrQe04ozV Dg&sa=X&oi=book_result&ct=result&resnum=6&ved=0CDsQ6AEwBQ#v=onepag e&q=Intervention%20Strategies%20in%20Management%20Consulting&f=false 4. http://en.wikipedia.org/wiki/Main_Page 5. http://www.plunkettresearch.com/Industries/Consulting/ConsultingTrends/tabid/178/Default.a spx 6. Plunkett Research, Ltd.

7. http://www.liveperson.com

Management Consulting B2B Marketing

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