We often describe the consulting market with the capabilities and the industries served. And most consulting firms will start there to introduce themselves. But to understand its structure, you will need to take a much deeper dive into what markers “make” the structure.
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte talks about how understanding the consulting market will help you source the right consultants .
Key Takeaway: Sourcing the right consulting firm is key to get the best outcomes from your consulting project. Understanding how consulting is structured will certainly allow you to improve the results of your sourcing efforts. It means deciphering the dimensions that make the market, including the human dimension.
Hello and welcome to episode 48 of our podcast: Smart Consulting Sourcing, THE podcast about Consulting Procurement.
My name is Hélène, and I’ll be your host today.
Each week I’ll give you the keys to better use, manage and source consulting services.
This week, I’ll explain how Understanding the consulting market will help you source the right consultants
Last week, I talked about the US Consulting Market
We saw Consulting usually follows the ups and downs of the Economy. North America is one of the largest Economy in the world and the cradle of modern consulting. And with no surprise, the Us consulting market is strong and dynamic. Demand for consulting is driven by rapid growth and uncertainty.
We often describe the consulting market with the capabilities and the industries served. And most consulting firms will start there to introduce themselves. But this is just scratching the surface.
The Consulting Market is extremely diverse and complex. And to understand its structure, you will need to take a much deeper dive into what markers “make” the structure.
I won’t teach you that having a good grasp of the supply market is key to get the best Sourcing outcomes. But if I ask you how many consulting firms you can name, most Executives cannot name more than 10 to 15 rather large companies.
And Procurement Executives don’t necessarily score better at that little game.
Let’s have a quick look at how the market is structured and how you can use that knowledge to choose the right consulting firm for your projects.
How is the market structured?
- The overall management consulting market is estimated at approximately $250 billion worldwide, with a CAGR of roughly 6%, clearly outpacing GDP in all countries.
- There are roughly 10,000 Consulting Firms globally, representing 250,000 consultants, without independent Consultants. As a rule, large Consulting Firms tend to be one-stop shops (offering all capabilities and industries in most geographic regions). At the same time, smaller companies are often focused on one or two dimensions only.
- Most Procurement Executives are looking at the market through the capability/industry lens. They know that one-stop shops such as Mc Kinsey, Bain & Company, Booz Allen, Big 4, and consorts can cover the full spectrum. They identify a few other players focused on one capability or one industry.
- Another effective way is to screen the market through the Strategic Operational dimension. Strategic Consulting is about high-level strategy, transformation, large organization projects, very often at the highest level of the Company, as opposed to more operational projects such as lean, team effectiveness, purchasing, etc.
- Sometimes, the same capability can be approached with either a Hard or a Soft angle. If we take the org design capability as an example, Hard would be org charts, job descriptions, processes, handbooks, while Soft would be team alignment, culture, change management, and talent.
And many other dimensions can be used to screen the market: Strategy Players with a touch of digital vs. Digital Players with a zest of strategy, Global vs. Local, Blue Chips vs. SMEs, Diagnosis Experts vs. Implementation Specialists, etc.
How important is the human component of consulting?
Consulting Firms are rarely present on the whole spectrum for one dimension, even the large ones, but the odds are quite high that whatever your problem is, there is a Consulting Firm focused on it.
People make all the difference – as surprising as it may sound, identifying a Consulting Firm with the right expertise only gets you halfway there.
Consulting is a human-to-human service, and consultants are not commodities. To better source a project, executives need to understand who the people are behind the Consulting Firms and to assess the fit with your Company’s context and culture.
The background of consultants can be essential to understand the type of projects they can work on. For instance, life-long consultants will bring you perspective and benchmark, while former executives can bring you hands-on experience.
If you want to accelerate the execution of a project and mobilize a significant amount of resources in a top-down fashion (post-merger integration, for instance), large firms with their pyramidal organization and structured processes and methodologies can be the right fit.
Suppose you want to align and embark your management team on a disruptive transformation. In that case, you may want to leverage a boutique firm’s expertise and seniority that can customize on the fly their methodology to maximize appropriation.
How to find the right match for you and your specific case?
- Evaluate the Consulting Company on all dimensions
- Understand their range of projects
- Pinpoint where their value lies
- Assess their proposal with reasonable expectations
Sourcing the right consulting firm is key to get the best outcomes from your consulting project. Understanding how consulting is structured will certainly allow you to improve the results of your sourcing efforts.
That’s it for today. Next time, I’ll give you 5 reasons why Executives love to hate consultants.
In the meantime, if you have any questions, or want to learn more about what we do at consulting quest, just send me an email at firstname.lastname@example.org
You can also have a look at our website smartconsultingsourcing.com to know more about our book and download free templates & guides to improve your consulting sourcing.
Bye and see you next week! Au revoir!