What is Consulting

Business consulting is the practice of, helping organizations improve their performance, primarily through the thorough analysis of existing business problems and development of plans for improvement. Organizations hire the services of management consultants for a number of reasons, including, for example, to gain external, and presumably more objective advice and recommendations, to gain access the consultants' specialized expertise, or simply as temporary help during a one-time project, where the hiring of permanent employees is not required. Because of their exposure to and relationships with numerous organizations, consultancies are also said to be aware of industry 'best practices,' although the transferability of such practices from one organization to another is the subject of debate.

Consultancies may also provide organizational change management assistance, development of coaching skills, technology implementation, strategy development, or operational improvement services. Business consultants generally bring their own, proprietary methodologies or frameworks to guide the identification of problems, and to serve as the basis for recommendations for more effective or efficient ways of performing business tasks.

Management

Management consulting

Management consulting is the practice of helping organizations to improve their performance, operating primarily through the analysis of existing organizational problems and the development of plans for improvement. Organizations may draw upon the services of management consultants for a number of reasons, including gaining external (and presumably objective) advice and access to the consultants' specialized expertise.

Consultancies may also provide organizational change management assistance, development of coaching skills, process analysis, technology implementation, strategy development, or operational improvement services. Management consultants often bring their own proprietary methodologies or frameworks to guide the identification of problems and to serve as the basis for recommendations for more effective or efficient ways of performing work tasks.

Strategy

Strategy Consulting

At its core, business strategy is all about earning superior profits and beating the competition. Strategy consulting is the industry and practice of assisting businesses with high-level decisions that enable them to do this. Strategy is distinct from operations in that strategy addresses the question "What do we do?", while operations addresses the question "How do we do it?"

A strategic question might be: "What should we do to differentiate ourselves from the competition?", while an operational question might be: "How can we operate this plant most cost-effectively?" Operational questions cover many siloes of the organization, from manufacturing to IT to human resources to finance. Strategic questions operate at a higher level, prioritizing resources among the competing demands to maximize shareholder wealth.

A common question that strategy consultants face is, "Why don't these companies do that themselves?" Indeed, if the questions are so critical and strategic, it might seem that they shouldn't be outsourced. Clearly, executives at client firms do not abdicate their decision-making responsibility to consultants. Rather, they incorporate the additional input into their decision-making process.

Some questions are so important that they deserve an extra dose of talent and brainpower to ensure that they're answered properly. Getting the answer wrong could devastate the company or mean the company misses great opportunities to their competition, so it's worth spending a couple million dollars ensuring that they get it right.

Executives are often tied-up in the day-to-day decisions of the company and simply can't dedicate the time and mental resources required to get to the right answer. Executives' days are tied up with meetings, operational crises, personnel issues, customer relations, and dozens of other obligations. A strategy consulting team, however, can devote 60 hours (or more) a week focused on answering a single important question.