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The Unit
About this workbook
The Unit
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This unit is about understanding the stages of the consultancy cycle and how to manage interventions effectively.
The main purpose of this workbook is to support you as you study for the Chartered Management Institute Level 5 Qualification — Professional Consulting, so it specifically focuses on the content of the syllabus for Unit 5030, Planning and Managing Consultancy Interventions. This workbook provides underpinning knowledge and develops understanding to improve your skills as well as to prepare you for future assessment. If you are studying towards the Level 5 in Professional Consulting then, if you choose to do so, you will be assessed on ‘your knowledge and understanding of’ the following learning outcomes:
Learning Outcomes L O 1.
Understand the need to adopt a structured approach to managing consultancy interventions. 1. Discuss different types of consultancy interventions and approaches available to a consultant 2. Evaluate the role of planning in consultancy interventions 3. Explain the stages of the consultancy cycle 4. Identify the inputs and deliverables at each stage of the consultancy cycle 5. Explain how to overcome challenges and risks which may arise during the consultancy cycle 6. Evaluate the importance of scoping to a consultancy intervention
Assessment Criteria
L O 2.
Be able to use project management techniques in a consultancy intervention 1. Identify the components of an effective project plan 2. Evaluate the need for budgeting of financial and non-financial resources 3. Develop systems and practices to identify and manage potential risks to the achievement of project objectives 4. Identify an appropriate infrastructure to support project delivery 5. Assess the impact of the consultant’s own role and skills in project delivery 6. Evaluate the importance of the project leader quality assuring the work of the project team
L O 3.
Know how to conduct a consultancy intervention 1. Identify the resource implications for gathering different types of data/information and evaluate their contribution to the project 2. Select a range of data analysis tools/models and evaluate the contribution to the success of an intervention project in using a range of tools/models 3. Explain how to develop a cohesive set of conclusions/findings 4. Describe the process of developing recommendations from the analysis
Consultants can be found in nearly every sector and firm. They are hired by banks, insurance, law firms, retail businesses, government organisations, into procurement divisions, and auditing tasks, to name a few popular industries and roles for consultants. They do everything from evaluating management efficiency through to protecting computer systems from hackers. Some pitch themselves as problem-solvers, subject matter experts, generalists, strategists and technical specialists. For a decent article about how to (or not to) approach consultancy and impress potential clients please take some time to read an article, The Three Types of Consulting Approaches by Lewis Auder (2014). (The URL is provided below in our references.)
Two popular definitions of ‘consultant’ can be found below:
Engaged in the business of giving expert advice to people working in a professional or technical field. (Cambridge Online Dictionary: 2020)
The provision to businesses of objective advice and assistance relating to the strategy, structure, management and operations of an organisation in pursuit of its long-term purposes and objectives. Such assistance may include the identification of options with recommendations; the provision of additional resources; and/or the implementation of solutions. (Iconsulting.com)
The diversity of roles within the consulting space offer many opportunities for individuals to specialise in areas that appeal to them. Nevertheless, there are
also risks, because companies will not retain external consultants who either do not show clear value to their business, or who cannot demonstrate sufficiently enhanced levels of specialist expertise that cannot be accessed from within the existing (internal) employee pool.
Tip 1: Consultants are often paid by the hour, or by the day, therefore they must be perceived to add value to their client business.
Consulting roles usually fit into one of five main categories: strategy consulting, financial consulting, information technology consulting, operations consulting and human resources consulting.
To help you get a sense of which types of consulting you might be most interested in, we provide an overview of these five categories below.
Strategy consulting
Strategy consulting focuses upon the assistance of shaping the longer-term vision of a company. Such consultancy roles become available because very busy internal senior executives are often diverted from longer term goal achievement by the ‘cut and thrust’ of day-to-day business development and management.
The goal of strategic consultants is to see the bigger picture, and to identify ways in which to increase the company's overall profitability and competitiveness. They form strategies to reach long-term goals and oversee the implementation of these, ensuring that the firm does not get diverted off-course by the turbulence of everyday events and market conditions. Such consultants will need to be able to communicate the overall (strategic) business vision by honing defining its longer-term objectives and mission.
Firms that are best known for pure strategy services are McKinsey, Bain and Boston Consulting Group (BCG). Each have most informative websites that will help you to develop your strategic consultancy skillset.
Case Study Example:
The client is a food retailer who specialise in low-calorie healthy products. They begin to notice their competitive edge slipping and profits are nosediving. They seek the expertise of a retail strategy consultant. The consultant identifies a major point of difference between the client and its more successful competition. The client is advised to provide higher energy food products for the increased target audiences that go to gyms and fitness classes. The consultant then develops a successful strategy to expand the retailer’s products, marketing and distribution channels in this segment. During a three-year transformation plan profits rise from 4% to 18%, equivalent to £36m, in financial year 3. The project team cost £6m over three years. The Return on Investment (ROI) is several thousand per cent and the consulting team use this project as a golden case study to win future business.
Financial consulting
Financial consultants assess a client’s financial position in order to develop and propose a plan on how to better manage the money-side of the business. This is likely to involve providing information and advice on investment strategies, tax issues and how to manage the everyday business expenses. Financial consulting also covers insurance advice and saving (efficiency) strategies. One of the surest ways to make healthy profits is to control costs (spending).
The so-called ‘Big Four’ accountancy firms – KPMG, Deloitte, PWC and Ernst & Young - are well known for their financial consulting services, although they do offer services in other areas too. This type of consulting could be the perfect match for individuals with a finance, economics or business-related degree.
Example: Our healthy food retail client has now expanded globally. Revenues are huge, but costs seem to be spiralling out of control. Supplier costs appear to rise heavily and a weak Pound sterling is blamed. Not quite feeling confident that the weaker Pound is the reason, the resurgent retailer now seeks the advice of a team of qualified financial consultants, with imports and exports market expertise, to better understand the international market and provide advice on tax and other financial regulatory laws they need to be aware of (Ainsworth: 1997).
Tip 2: Most consultants will need to have industry-specific qualifications to carry out and advise on the tasks that they are undertaking on behalf of their client
Operations consulting
In larger organisations there are often more inefficiencies such as task duplication, departmental mission creep and overly siloed managers. It is not uncommon in larger organisations for employees to suggest that they were unaware certain people, teams or even company locations even existed!
Operations consultants specifically look at the systems that clients use to reach their goals and work to enhance their efficiency. They assess all levels of operations including production, sales, distribution and customer service. They are interested in how processes can be refined in terms of costs, time, staff involvement and steps required, to best meet targets. From this, we can see that operations consultants can experience ‘mission creep’ into a whole range of systems. Therefore, it is vital that they are both strong at project management as well as defining and agreeing the scope of their original task.
Strategy consulting and operations consulting are closely linked. As we have seen, Strategy Consultants should focus on long term goals. Whereas operations consultants evaluate the behind-the-scenes structures and systems that enable fulfilment of these goals. Many leading consultancy firms offer both of these services.
One firm that has a strong business footprint in operational consultancy is Partners in Performance (PIP). Moreover, the ‘Big 4’ advisory firms have a strong presence in operations consultancy for larger firms and government organisations.
Continuing our Case Study example from above: An operations consultant might now be commissioned by the retail client to improve their production costs, making the production lines and supply chains leaner, which ultimately allows the client to sell their healthy retail products at a cheaper rate, making them
much more competitive as well as much more attractive in emerging markets where consumers might be less wealthy.
Information technology consulting (IT consulting)
A consultant in this area provides advice on how to best use technology to enhance a client’s business. With concerns around data security and privacy, and the advent of legislation such as the EU General Data Protection Regulation (2018), IT consulting has increasingly come to include cyber security and information security risk management services. Such consultancy could involve designing unique software application for a company, designing a safe piece of customer payment software, assisting a firm-wide transition from PC’s to Macs, or testing the efficiency and security of current devices and programs within the business. External auditors often come into businesses to audit security procedures and official national or international standards. (Companies are likely to lose contracts or face large fines if they are not compliant with data regulations.)
Consulting work in this area is called by many titles including: tech consulting, IT advisory, business technology services or IT consulting. With hacking highly prevalent, and employees brining their own devices into work (BYOD) IT consultants are increasingly being called upon to ensure there are no security breaches and sensitive information is kept confidential. Such consultants can be typically called Cyber Security or Information Security advisers (Talwar et al: 2015).
Prominent firms in this space are Accenture, PA Consulting and BAE.
Case study example: The retail food client has now decided to launch their own app - ‘fastenergy’ - for retail staff to manage sales on the shop floor. They utilise IT consultants to oversee the app’s development, and install a secure, encrypted, payment platform, then troubleshoot any issues and train staff in the use of the new system. They use consultants to war game and stress test the new app for cyber vulnerabilities, before it is released publicly into the consumer market. The tests initially fail, because the app has vulnerabilities that were exploited by a penetration tester. However, each consultant has signed a non-
disclosure agreement (documents designed by legal consultants) and therefore the glitch remains private to the company and the team of consultants.
Human Resources consulting (HR consulting)
Human Resources (HR) consultants handle matters concerning a firm’s employees – co-ordinating their personal development and documentation – in alignment with the business’s daily requirements and overall strategy. They deal with the people side of business! (Grout and Fisher: 2011)
They work with clients in the recruitment and transition phases to place the best people in the correct roles. They research and implement well-being systems, attend to communication issues and handle remuneration and change management. They're expected to become experts in a company's culture, and therefore have the capacity to consult on whether two companies could successfully merge without a clash of ethos. HR consultancy firms also manage outsourcing.
Many UK and US consultants or aspiring consultants might have heard of Randstad or ManpowerGroup? These are popular brands in HR consulting.
Case study example: Our food retail client – and its ‘fastenergy app’ - has decided to open specialised stores with health and wellbeing instructors who will be involved with a lot of remote working. They seek the expertise of a HR consulting firm to restructure the business and build management and operational teams who are suited to working in the new market.
Reflective Learning:
During this section we have looked at the different types and sectors of consultancy interventions and why clients might wish to use consultancy services. But now it is time for you to imagine that you are a consultant in your chosen profession? What type of approach will you take to potential clients and what will be your areas of expertise to add value to their company? Write down your answers in your notebook.
Further Reading:
Grout. J, and Fisher, L. (2011) What You Need To Know About Leadership. Chichester: Capstone Press
Dale Carnegie Training (2009) Leadership Mastery. London: Simon & Schuster
Talwar, R. (ed.) (2015) The Future Of Business: Critical Insights Into A Rapidly Changing World. New York: Futurescapes
References:
Auder, L. (2014) The Three Types of Consulting Approaches, Consulting 101 Career Management, accessed on 10/01/2020 at: http://blog.consulting101book.com/3-types-consulting-approaches/
Cambridge Online Dictionary
Iconsulting accessed on 07/01/2020 at: http://www.iconsulting.org.uk/purchasing-consultancy/why-use-an-icconsultant/what-is-consulting
Ainsworth, J., (1997) How to Become a Successful Financial Consultant: Making a Living Investing Other People's Money. London: John Wiley & Sons
Talwar, R. (ed.) (2015) The Future Of Business: Critical Insights Into A Rapidly Changing World. New York: Futurescapes
Grout. J, and Fisher, L. (2011) What You Need To Know About Leadership. Chichester: Capstone Press
