Consulting
Imagine spending your day giving advice to other people, telling them how
to run their businesses better or how to save money on hiring new
employees. You’ve spent your years at school or in the workforce acquiring
knowledge and now you’re able to sell it for hundreds of dollars an hour.
Consulting firms are traditionally among the largest employers of top MBA
and college graduates. With various specialties like IT, human resources
and business strategy consulting on the growth fast track, if you’ve got
the qualifications it’s likely that these firms will hungrily read your
resume.
More than half the people in top MBA programs and a significant number of
college seniors flirt with the idea of becoming a management consultant
after graduation. It’s a high-paying, high-profile field that offers
students the opportunity to take on a lot of responsibility right out of
school and quickly learn a great deal about the business world. But many
mid-career professionals, too, decide to take their expertise to consulting
firms or hang out their own shingle and begin selling what they know. Most
consultants specialize in a particular field, and if you have a big career
coup that you can tout—such as having success at a big company, or
launching a high-profile product or initiative—that’s exactly the kind of
calling card you can take advantage of to get clients.
In essence, consultants are hired advisors to corporations. They tackle a
wide variety of business problems and provide solutions for their clients.
Depending on the size and chosen strategy of the firm, these problems can
be as straightforward as researching a new market or as complex as totally
rethinking the client’s organization. No matter what the engagement, the
power that management consultants wield is hard to scoff at. They can
advise a client to acquire a related company worth hundreds of millions of
dollars, or reduce the size of its workforce by thousands of employees.
Consulting is a big, one-size-fits-all term that includes virtually any
form of advice-giving. Many people think first of management consulting,
also called strategy consulting, which specializes in providing advice
about strategic and core operational issues—but there are many other types
of consulting, including marketing consulting, technology consulting, human
resources consulting, just to name a few.
IT is H-O-T
At an estimated $14 billion in size, and with a compound annual growth rate
projected at 8.8% through 2009, the IT Strategy and Planning (ITSP)
consulting market is healthier than it’s been since the crazy days of the
dotcom boom. Consulting research firm Kennedy Information, publishers of
Consultants News, says that there are three key reasons for the growth: The
technology marketplace is maturing, with identifiable key players;
competition is forcing companies to make better use of technology to be
more efficient; and complex IT systems require companies to seek outside
help.
The Challenge to Outsourcing
Outsourcing has been one of the greatest revenue builders for many of the
IT firms like Accenture, but a number of India-based firms, such as
Infosys, are getting in on the game. These players can charge $30 an hour
versus the $150 IBM Global Services, Accenture, and EDS must charge. To
counter their overseas rivals, some consulting firms are throwing in
hardware and other consulting services to sweeten their bids. It doesn’t
seem to be enough to bridge the gap: Indian firms have advantages on both
cost and quality. Look for North American firms to begin acquiring Indian
firms (which is what IBM did with Daksh eServices, one of the world’s
largest call center operations) as well as Indian outsourcing to boom.
Firms are Cashing In
As more companies realize that it’s easier to hire someone who knows what
he or she is doing to fix a problem rather than fumble along in the dark,
consulting firms are getting more profitable. Kennedy Information reports
that consulting fee levels are expected to increase by 5 percent in 2007.
This is a welcome contrast to rampant fee discounting and lackluster
profitability growth over the last several years. This increased
profitability not only means higher fees to clients, but also more
competition between firms for the best clients.
These days, it seems like just about everybody and her brother professes to
be a consultant. "Hold on," you say. "How can Aunt Suzie,
who has her own consulting business, and those people in the blue suits at
the famous New York addresses all be doing the same thing?" All of
them may really be consultants, but you can bet they’re not all doing the
same thing. Just as there are many different sorts of doctors, there are
consultants with all manners of expertise and specialty.
This industry profile deals primarily with management consultants, the
elite consulting firms that make the most money advising the biggest and
most powerful companies in the world. However, there are a number of
specialized groupings within the management consulting field and many more
types of consulting firms that provide specialized advice and services in
other areas.
To help you get a better handle on the options, we’ve grouped the
consulting world into several different segments. Keep in mind, however,
that such groupings are arbitrary. Firms in one group can and do compete
directly with players in other segments.
Industry Elite
This group is populated by a few top strategy firms and a host of smaller
challengers. The bulk of these firms’ work consists of providing strategic
or operational advice to top executive officers in Fortune 500 companies.
For this, they charge the highest fees and enjoy the most prestige. They
also have the fattest attitudes, work the most intense hours, and take home
the most pay. Representative firms include Accenture, A.T. Kearney, Bain,
Booz Allen Hamilton, The Boston Consulting Group, Marakon Associates,
Mercer Management Consulting, McKinsey, and Monitor Group.
Boutique Strategy Firms Firms that specialize along
industry or functional lines. Although often smaller, these firms may have
top reputations and do the same operations and strategy work the elite
firms do, but with more of an industry focus. Representative firms include
Cornerstone Research (litigation support), Gartner (high tech research),
and PRTM (high tech operations).
Technology and Systems Consulting Firms
Firms here typically take on large projects to design, implement, and
manage their clients’ information and computer systems. Technology
consulting often takes place in the bowels of the client organization. In
general, this kind of consulting job requires large teams of people who
actually do the computer work. As a result, there are usually more
opportunities for people from undergraduate or technical backgrounds than
from MBA backgrounds, but it’s not the same high-prestige work strategy
consultants are known for. Representative firms include Accenture,
BearingPoint, Capgemini, Computer Sciences Corporation, EDS, HP Technology
Solutions Group, IBM Global Services, Novell, Oracle, SAP, and Synopsis.
Human Resources Consulting
This can include everything from designing an employee evaluation and
compensation system to conducting organizational effectiveness training to
helping an organization through a significant change event, such as a
merger. HR consultants often work as long and travel as much as their
counterparts in general management consulting. Representative firms include
Accenture’s Change Management Group, Buck Consultants, Hay Group, Hewitt
Associates, Mercer Human Resource Consulting, Towers Perrin, and Watson
Wyatt.
While outsourcing consulting was the bread and butter of many firms over
the past few years, that’s all changing. The BLS expects consultants in
business, technology and health care to enjoy a whopping 60 percent growth
rate between now and 2014—more than four times the cross-industry average
of 14 percent, and making it the fifth–fastest growing employment segment.
Increased profitability reported by top firms bodes well for fueling that
growth. With a tight labor market, it’s actually cheaper and easier to hire
specialized expertise in the short term than it is to try to find an
appropriate staffer to bring onboard.
The BLS says that the growing number of businesses means increased demand
for advice in all areas of business planning as consultants draft business
plans and budgets, develop strategy, and determine appropriate salaries and
benefits for employees. Some of the key areas of growth include:
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Location and marketing planning for franchised restaurants and retail
stores.
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Logistical consulting, mapping the most efficient links between suppliers
and customers.
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Human resources and workplace safety experts who can help companies
navigate increasing federal, state and local employment law, as well as
how companies can better attract and retain talented employees.
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IT consultants who can help companies take advantage of technology.
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Environmental compliance and “green” consultants who can help businesses
navigate stiffer environmental laws and regulations, while helping
companies find ways to be more sustainable, which is of increasing
importance to customers.
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Love My Job
Most people who work for consulting firms talk about how intellectually
stimulating their work is. They enjoy the challenge of going into new
settings and facing some of the most difficult issues business leaders have
to deal with. Although most don’t admit it openly, there’s also a palpable
excitement associated with being able to sit down with a CEO of a large
firm and tell him or her what to do. Consultants also take pride in seeing
the impact their advice has on clients’ businesses.
People Power
The key resource of consulting firms, and some would say the only resource,
is their people. All of the top-tier firms fill their offices by skimming
the cream of the undergraduate and business school elite. Insiders tell us
that working at a consulting firm is very much like being on a team with
the best people from school: "People are universally bright,
interesting, hardworking, and motivated." Many insiders also say they
enjoy socializing with their colleagues.
Learning Environment
One of the thrills for many consultants is the constant learning that comes
with the consulting workload. Whether you’re learning about a new company
or industry, talking to people in various parts of a client organization,
or brainstorming ways to deal with challenging technical problems,
consulting offers a steady diet of new cases and settings. Many consultants
believe they wouldn’t face such a wide variety of challenges in another
profession.
A Dog’s Life
The travel, the hours, and the difficulty of maintaining a personal life
top everyone’s list of consulting complaints. "There is limited life
outside of work," says one insider. It’s not that people in other
professions don’t work long, hard hours, but the consulting lifestyle,
which often requires the consultant to be out of town four days a week for
months at a time, is hard to maintain over the long run, especially for
people with families. Some individuals actually thrive on the pace and
excitement of the energetic schedule. For many others, a few years are
about all they want to put up with.
"I’d Rather Be…"
Consultants often express their desire to get into the thick of managing a
company and start making management decisions. This may be partly a case of
the grass being greener, but after giving advice to so many companies and
executives, many consultants are eager to try their hand from the client
side. They also complain about not getting the in-depth experience they’d
get if they worked at a company. A large number of consultants leave after
a few years to start businesses or work in operating companies.
What Difference Does It Make?
Most people who go into consulting as a career say they do valuable, highly
meaningful work. However, a common complaint among ex-consultants is that
the work didn’t seem as meaningful to them as they would have liked. As one
explains, "I felt like we did a lot of ephemeral strategy stuff for
big companies that didn’t really amount to much. I really didn’t want to be
working with conservative, old Fortune 500 companies. I wanted to be making
a difference in a smaller setting, with real people."
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Consulting Firms that Ranked in the Fortune Top 100
MBA Employers
|
|
Rank
|
Firm
|
|
2
|
McKinsey & Co.
|
|
4
|
Bain & Co.
|
|
5
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The Boston Consulting Group
|
|
16
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Booz Allen Hamilton
|
|
18
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Deloitte (includes consulting and audit units)
|
|
23
|
IBM (includes entire company, not just Global
Services)
|
|
36
|
Accenture
|
|
37
|
PricewaterhouseCoopers
|
|
57
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A.T. Kearney
|
|
78
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Monitor
|
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86
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Oliver Wyman
|
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95
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BearingPoint
|
Source: Excerpted from
Fortune; WetFeet research.
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As each firm has its favorite buzzwords, it also has unique terminology for
its rank and file. While the titles may vary from firm to firm, the roles
can basically be divided up as follows: analyst (also called research
associate or staff consultant at some firms), consultant (or senior
consultant), manager, and partner or VP. In addition, consulting firms hire
a cadre of highly capable nonprofessional staff into administrative and
support positions—this is not a bad place to be if you've got skills in
PowerPoint and you like to create slides.
Administrative Assistant
Most consulting firms have a fairly large pool of college-educated
administrative assistants and support staff on board so that the
consultants can keep focused on tasks that justify their $200-plus per hour
billing rates. In addition to performing standard support functions, many
have specific roles (recruiting, office administration, or website
maintenance, for example). Most firms also have a group of graphic
designers on staff to prepare materials for presentations. Salary range:
$26,000 to $42,000 or more.
Analyst/Research Associate/Staff Consultant
This is the position at the bottom of the professional pyramid. The vast
bulk of analysts are young, talented, and hungry college graduates. Many
firms structure this position to last for two to three years, after which
the analyst is expected to move on—perhaps to graduate school or another
employer. Some firms do allow people to progress up the management ladder
without leaving the firm. The work itself—as well as the hours—can be quite
demanding. It often includes field research, data analysis, customer and
competitor interviews, and client meetings. In IT, analysts may do
heavy-duty programming. Salary range: $56,000 to $84,000, often plus a
signing bonus and year-end bonus.
Associate/Consultant/Senior Consultant
This is the typical port of entry for newly minted MBAs (and increasingly
for non-MBA graduate students as well). Senior consultants often perform
research and analysis, formulate recommendations, and present findings to
the client. Oh, and at many firms, they have to implement those great
ideas, too. Although this is usually a tenure-track position, a fair number
of consultants will leave the business after two or three years to pursue
entrepreneurial or industry positions. Salary range: $43,000 to $93,000 or
more with bonus.
Manager
After a few years, a senior consultant will move up to manager. As the
title implies, this usually means leading a team of consultants and
analysts toward project completion. Some firms may hire MBAs with
significant work experience directly into the manager position,
particularly in their IT practices. In addition to having more-rigorous
responsibilities for managing the project team, the manager will typically
be a primary point person for client interactions. Salary range: $89,000 to
$150,000.
Partner or VP
Congratulations! You've forded the River Jordan of consulting and
arrived at the Promised Land. Note that some firms further subdivide
partners into junior and senior grade. And, if you aspire to it,
there's always that chairman or CEO position. As a partner, one of your
big responsibilities will be to sell new work. Fortunately, as with other
big-ticket sales jobs, the pay can be quite rewarding. Salary range:
$250,000 to several million dollars at leading firms.
There are two main routes into consulting. One goes directly from campus
(undergrad and MBA, primarily) into entry-level positions (analyst or
consultant). The other leads from industry into midlevel positions in
specific practice groups (e.g., aerospace, energy, and financial services),
functions (e.g., marketing or supply chain management), or technologies. If
you're set on landing a consulting job, keep these things in mind:
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Competition for consulting spots is intense—major firms review hundreds
of resumes for each hire they make. To stand out from the crowd,
impressive schools, impressive grades, and a demonstration of significant
work or leadership experience are almost essential.
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In addition to your bulletproof resume, you'll need to show evidence
of strong analytical skills—usually by acing a series of the notorious
case interviews, in which recruiters ask you to analyze a hypothetical
business problem—your raw intelligence, and your ability to work well
with people. Check out WetFeet's Ace Your Case series for help
preparing:
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If you're applying for an IT consulting position, you may well be
asked to write some code.
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In almost all cases, you will be screened for your fit with the firm. So,
for the duration of your interviews at least, try very hard to scale back
your most irritating habits.
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Remember, this is a very conservative industry. A pale blue resume, white
loafers, and off-color comments will certainly earn you a rejection
letter.