Management Consulting Business Models

A knowledge based industry, where relationships are key.

Often, the consulting industry is based on being able to connect companies with experts in various fields.

Typically makes money in one of 3 ways:

1. On a per hour basis

2. On a per project basis (fixed fee)

3. On a retainer (monthly fee)

business consultant example 1

business consultant example 2

For other types of consultants, please visit the Consulting business models page

Wikipedia on "Management Consulting":

The A Conslutant Management consulting (sometimes also called strategy consulting) refers to both the practice of helping companies to improve performance through analysis of existing business problems and development of future plans, as well as to the firms that specialize in this sort of consulting. Management consulting may involve the identification and cross-fertilization of best practices, analytical techniques, change management and coaching skills, technology implementations, strategy development or even the simple advantage of an outsider's perspective. Management consultants generally bring formal frameworks or methodologies to identify problems or suggest more effective or efficient ways of performing business tasks.

Management Consulting is becoming more prevalent in non-business related fields as well. As the need for professional and specialized advice grows, other industries such as government, quasi-government and not-for-profit agencies are turning to the same managerial principles that have helped the private sector for years.

There is a relatively unclear line between management consulting and other consulting practices, such as Information technology consulting.

Currently, there are three main types of consulting firms. First, there are large, diversified organizations, such as Accenture and IBM Global Services that offer a range of services, including information technology consulting, in addition to a management consulting practice. Second are the large management and strategic consulting specialists that offer purely management consulting but are not specialized in any specific industry, such as Bain & Company, Boston Consulting Group, and McKinsey & Company. Finally, there are boutique firms, often quite small, which have focused areas of consulting expertise in specific industries or technologies.

Added to these approaches are corporations that set up their own internal consulting groups, hiring internal management consultants either from within the corporation or from external firms whose employees have tired of the road warrior lifestyle. Corporations such as SunLife, IBM, Fidelity, Siemens, Chevron Texaco, Metlife and Bristol Myers Squibb have found these groups to be particularly helpful. Many of these corporations have internal groups of as many as 25 to 30 full-time consultants.

The internal consultant approach is chosen for three reasons. First, the corporation does not want to pay the large fees typically associated with external consulting firms. Second, they want to keep certain corporate information private. Finally, they want a group that more closely works with, and monitors, consulting firm relationships. Often, the internal consultant has less ramp up time on a project due to familiarity with the corporation, and is able to guide a project through to implementation - a step that would be too costly if an external consultant was used.

Criticism

Management consultants are often criticized for overuse of buzzwords, reliance on management fads, and a failure to develop executable plans that can be followed through. A number of highly critical books about management consulting argue that the mismatch between management consulting advice and the ability of business executives to actually create the change suggested results in substantial damages to existing businesses, see, for example Dangerous Company by James O'Shea.

Further criticisms include: analysis reports only, junior consultants charging senior rates, reselling similar reports to multiple clients as "custom work", lack of innovation, overbilling for days not worked, speed at cost of quality, unresponsive large firms & lack of (small) client focus, lack of clarity of deliverables in contracts, and more.

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Worldwide directory of management consulting firms:

http://en.wikipedia.org/wiki/Category:Management_consulting_firms