A consulting firm is a specialist service organization that offers expert advice at a fixed rate. Consulting firms can have just one employee or thousands; they can consult in an array of areas, such as finance, architecture, management, and many more. A professional consulting firm has its own set of credentials, which they have to show to gain clients. These credentials are what give the consulting firm its professional status. The following are the most common consulting firm credentials:
Experience. The experience of a consulting firm can be gauged from the experience level of the consultants who work for them. The most experienced consultants are usually located in the top five countries in consulting. A few notable consulting firms that have a good number of experience specialists are Bain or A.T. Kearney, Booz & Co., Cogent Power, McKinsey, Mercer, Potomac, Saturn, Stone Street, and Align. A few lesser known consulting firms that have a good amount of industry presence include advisory services firms, investment banks, government agencies, technology companies, venture capitalists, and legal professionals.
Strategy. The strategy of a consulting firm reflects its purpose. For instance, an investment bank might have a strategy for identifying attractive homebuyers and setting up financing for them. An information technology company might have a strategy for establishing strategic alliances and acquiring allied technologies. A management consulting firm might have a strategy for automating processes and using technology in management. All these strategies have to be grounded on the firm’s purpose.
Expertise. Although it isn’t mandatory for a consulting firm to possess extensive experience in every industry domain that it works in, it is almost always a good indicator of how serious the consulting company is about its strategy and what it hopes to achieve through its work. An investment banking firm, for instance, might not need to know too much about alternative energy to develop an effective energy strategy. However, if it has vast amounts of industry knowledge and experience at its disposal, it can help guide better decision-making regarding almost every business function.
Analytic capability. A consulting firm, even though it might have an expertly developed strategy and a well-grounded analytical capability, will not be successful if it cannot communicate effectively with its clients. This means that every aspect of the strategy – from the analysis to the implementation – should be managed through an efficient communication program. Communication is virtually every element of business consulting, from advising the client to assisting the implementation process. For instance, the financial planning and risk management department of a company might require a consultant to handle a specific annual revenue goal (e.g., $500 million) by a certain date. In order to achieve this goal, the consulting firm must communicate clearly and precisely how much funding will be required and how quickly it will materialize.
Management consultants also need to know the right time to engage the services of outside talent when necessary. While independent contractors can serve as effective outsourcing solutions to some management tasks, such as implementing an effective supply chain or improving customer relations, their most important role is as an information-gathering tool. As such, consulting firms should ensure that they keep track of their employees’ development – both on a continuous basis and over time – so that these talented individuals can be properly added to their payroll in situations where their skill set is needed.
Prestige. Without a doubt, one of the most important factors that all management consulting firms look at is their clientele. Typically, a management consulting firm works with a large number of companies, many of which are relatively small. In order to grow, these companies require steady guidance from management consulting firms, which usually translate into prestige for the company. Management consulting firms might have to work with a company for many years before they gain enough trust to recommend them to other clients. In addition, the size of a firm ensures that only serious and capable people will take part in its projects, further guaranteeing prestige.
Finally, consulting firms often offer additional perks to draw in new talent. This includes offering apprenticeships, educational seminars, and other opportunities that allow potential workers to get the experience they need while developing their skills. Management consulting firms often work with other companies to provide opportunities to potential workers that might not otherwise be available. These benefits become especially important when consulting firms are working with a limited client base. While some companies have a need for consultants all throughout their operations, other companies might need additional services from consultants after they’ve been hired on a regular basis.