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0 Lecture One
The Latitude of Consultancy
Objectives Lecture 1
1. Define clearly what business consultancy is
2. Differentiate clearly between training and consulting
3. Identify correctly the areas that consulting concerns itself with
4. Explain clearly why consulting need has arisen in the last few years
5. Identify correctly the various types of consultancies

Consultancy has been defined in a number ways by various scholars.

Larry Greiner and Robert Metzger
Consulting is an advisory service contracted for and provided to an organization by specially
trained and qualified persons who assist, in an objective and independent manner, the client
organization to identify management or business problems, analyze such problems, and
recommend solutions and help, when requested in the implementation of the solutions.
Peter Block
Consulting is the process of trying to improve or change a situation without necessarily having
direct control over the implementation.
Fritz Steele
Consulting is any kind of providing help on the content, process or structures of a task or series
of tasks where the consultant is actually not involved in implementation task.
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.
Consulting and Training
Consulting and training are not synonymous. Although both involve learning, they hold different
meanings. In most cases, it is the consulting process that brings forth the need to train. In this
case, training, therefore, becomes a subset of the consulting process. Sometimes, the client may
see the need to organize a training session for his staff without necessarily having to go through
the consulting process.
We can therefore conclusively say that whereas consulting is the process of assisting the client to
identify business and management problems, analyze such problems, recommend solutions and
assist in the implementation of such solutions, training is the process of imparting
requisite business and management knowledge, information and skills to the client
organization’s management and staff.
The Main Concerns of Consulting
In business, consulting mainly concerns itself with the following areas:
1. Functions and processes of management – business will mostly seek consultancy services in
the following areas:
a. Methods of production (production management) e.g. TQM, Business Process
Reengineering (BPR) – the process of scrutinizing processes and aligning them to business goals.
b. Marketing management e.g. identification and development of a market
c. Financial management e.g. sourcing and using financial resources
d. Human resource management e.g. the processes of recruiting, selecting, hiring, developing,
compensating and motivating employees
e. General business concerns
2. Problems and challenges faced by management: these would either be peculiar to that type of
business or general in nature. Their range is quite wide. They may include high costs of
operation and production, poor productivity, inefficient technologies or even marketing
problems.
3. Systems development and improvement – many businesses suffer the problem of
uneconomical or strongly unworkable systems. This particular concern may cover areas such as
IMIS and general information structures. Other organizational aspects that may warrant the
intervention of a consultant are the links / bridges of various components of the said systems
such as technology and equipment that make the systems work.
4. Organizational performance and change – change is the only constant. Organizations face
continuous change that impacts either negatively or positively on the overall performance,
depending on how that change is managed. As such, the client needs professional advice on how
to manage change with respect to organizational performance.
5. Sectoral consulting – some business consultants exist to handle specialized business concerns
such as financial investments or E-commerce.
The Growing Need for Business Consulting
The recent past has been characterized by a sustained acceleration of change in virtually all
industries. For different businesses this change has had far-reaching effects on their modes of
management and eventual profitability. For businesses that have been able to anticipate and
positively manage change, investments have been well rewarding. However, for those businesses
whose strategies, systems and modes of operation have remained static, efficiency has been
compromised and costs have sky-rocketed resulting in reduced profits or losses altogether. With
businesses and other corporate bodies having to operate in increasingly complex environments,
the problems they have to contend with have become both complex and resource-intensive. The
net effect of the scenario created above has been an almost insatiable need for consulting
services in a wide range of areas. The following trends point towards continued growth in
various areas of consulting:
1. Technological development: the rapid rate of technological development will continue to
have an impact on lifestyles, organizational management, product development, marketing,
reporting systems etc. As a result complex problems of interdependence, technology
dependence and competition are being created. Consultants are needed to help deal with these
changes.
2. Crisis in human resources: role definitions are continually changing. Every other day some
roles are becoming obsolete while others are gaining in importance. Others are still going
through radical transformations. This rapid dynamism has implications on the people upon
whom these roles are vested. It is the work of the consultant to help organizations to handle this
crisis professionally and cost-effectively.
3. Socio-economic changes: firms are no longer cushioned against the forces of open market.
African economies are rapidly embracing liberalization and companies are now serving much
more cosmopolitan markets. The social as well as economic values that ruled trading a few years
ago are now radically different. To continuously align themselves with the prevailing socio-
economic conditions businesses need the services of competent consultants.
Types of Business Consultants
Currently, there are four main types of consulting firms:
1. Large, diversified organizations that offer a range of services, including information
technology consulting, in addition to a strategy consulting practice (e.g. Deloitte). Some very
large IT service providers have moved into consultancy as well and are also developing
strategy practices.
2. Medium-sized information technology consultancies that blend boutique style with some of
the same services and technologies bigger players offer their clients.
3. Large management and strategic consulting specialists that offer primarily strategy
consulting but are not specialized in any specific industry (e.g. The Boston Consulting Group).
4. Boutique firms, often quite small, which have focused areas of consulting expertise in
specific industries, functional areas or technologies. Small firms with less than 50 employees are
often referred to as niche consultancies. If they have a unique concept and market it successfully,
they often grow out of this segment very fast or are bought by larger players interested in their
know-how.
A fifth type that is emerging is the sourcing advisory firm, that advise buyers on sourcing
choices related to in-sourcing, out-sourcing, vendor selection, and contract negotiations.
The following are the types of business consultants:
i) General consultant and Specialized consultant
ii) Internal consultant and External consultant
a) General consultant and Specialized consultant – While some people argue that a general
consultant is a ‘jack of all trade and a specialist of none, others argue that a specialized
consultant, though thorough in his area, is too limited to well understand the bigger picture of an
enterprise’s concerns. Some people contend that a general consultant is an all-round professional
who is well-placed to offer dependable advice on an array of business problems, and as such is
the real business consultant. Others, still object to this and point out that a generalist lacks in-
depth knowledge on any one area of business and is thus ill-equipped to help solve problems in
today’s complex business environments. They, therefore, argue that they are the real consultants.
However, it is safe to argue that both generalists and specialists have their place in today’s
business consulting. Whereas some businesses require general guidance in a variety of areas,
others need specialized advice on specific technical areas. Generalists and specialists should,
thus, be viewed more complimentary than competitive agents of change. The combination of
general and specialized business consultants in business should result in a better total effect on
business performance if each is used when and where most needed. A wrong choice could result
in higher costs of consultancy and less or less benefit.
b) External and Internal consultants share the characteristics of helping their clients address
problems and improve business and organization results; they have a passion for the wisdom and
expertise they bring to the organization, and they have the ability to galvanize clients into action.
Yet, we know there are significant differences in perspectives, challenges and requirements.
External consultants are often brought in because they bring wisdom, objectivity and expertise to
the organization. They are seen as gurus or saviors bringing wise counsel. Internal consultants
have expertise, but it is valued differently as an organization insider.
SUMMARY
•Consulting is an advisory service contracted for and provided to an organization by specially
trained and qualified persons who assist, in an objective and independent manner, the client
organization to identify management or business problems, analyze such problems, and
recommend solutions and help, when requested in the implementation of the solutions.
• Need for consulting has drastically risen due to the growing and ever-changing market and also
technology.
•Technological development, socio-economic changes, crisis in human resources have led to
increasing trend for consultancies.
• The main types of consultants are external, internal, specialized and general.
What are the hindrances of the development of consultancy as a profession?