MANAGEMENT CONSULTANCY

OVERVIEW
MANAGEMENT

-person(s) who have executive responsibility for the conduct of the entity’s operations
CONSULTANT

-Someone who has expertise in a specific area or areas and offers unbiased opinion and
advice for a fee.
RATIONALE FOR USING MANAGEMENT
CONSULTANTS
A management consultant is hired for at least four valuable reasons:
• Independent viewpoint
• Professional advisor and counselor
• Temporary professional service
• Agent of change
PEOPLE WHO GO INTO CONSULTANCY

Some of the people who go into consultancy are:

• People who are career frustrated;
• Retired people who have expertise to offer;
• People who wish to supplement their present income by using their managerial expertise or
technical and academic skills; and
• People with work experience and industry knowledge or other skills who want to combine a
family life with work at home;
REASONS PEOPLE ENTER INTO CONSULTANCY

• Sharing their knowledge to help their clients;

• Building business network and take a step in one’s corporate career;
• Having no boss, being independent and making their own decisions;
• No fear of being laid off;
• Having a flexible source of income;
MANAGEMENT ADVISORY SERVICES VS.
MANAGEMENT CONSULTING
Management Consulting
• Independent and objective advisory service provided by qualified persons to clients in order
to help them identify and analyze management problems or opportunities.

Management Advisory Services

• Function of providing professional advisory services (consulting) by independent accounting
firms, the primary purpose of which is to improve the client’s use of its capabilities and
resources to achieve the objectives of the organization.
ACTIVITIES OF MANAGEMENT CONSULTANTS

Two types of encounters with clients;

(a) Consultation; and
(b) Engagements
DIMENSION/ASPECTS OF
MANAGEMENT ADVISORY SERVICES
DIMENSIONS OF MAS ENGAGEMENTS

• Nature of the problem;

• Service delivery area;
• Phase(s) of the analytic process;
• Techniques and methodologies applied;
• Industry (or nature of organization) to which the client belongs; and
• Geographical area(s) where the engagement take place.
NATURE OF THE PROBLEM

Classifications of problem:
(a) Corrective
(b) Progressive
(c) Opportunistic
SERVICE DELIVERY AREAS

• General management
• Manufacturing
• Personnel
• Finance and accounting
• Marketing
• Procurement
• Research and development
• Packaging
• Administration
• International operations.
PHASES OF ANALYTIC PROCESS

a) Identifying the objectives

b) Defining the problem
c) Finding out the facts
d) Developing the solution
e) Implementing the solution
TECHNIQUES AND METHODOLOGIES APPLIED
INDUSTRY OR NATURE OF ORGANIZATION

Client may be:

• Private company
• Government agency
• Not-for-profit organization
• Professional association and etc.
GEOGRAPHICAL AREAS

MAS engagement can either be:

(a) Single Location
(b) Multiple Location
AREAS OF MAS
AREAS OF MS PRACTICE

• Business planning and development or project feasibility studies

• Information systems consulting
• Management / operations audit
• Business process improvement / reengineering
• Others
• Marketing research
• Marketing strategy development
• Developing promotional campaign
• Planning sales force activity
• New product development
• Developing proposals for financial support
• Staff recruitment
• Exporting and International Marketing
BUSINESS PLANNING AND DEVELOPMENT
(PROJECT FEASIBILTY STUDIES)
Common outcomes:
• Growth of the business within its core market;
• Expansion of the business into new market sectors;
• Development of new products;
• Increasing profits through cost-reduction programs; and
• Internal structural reorganizations.
INFORMATION SYSTEMS CONSULTING

Management need information if they are to make good decisions. They need information
on both the business’s external and internal situation. Information is a corporate resource.
Management information system aim to collect and organize such information and present
it to managers in a usable form.
MANAGEMENT / OPERATIONS AUDIT

Conducted to evaluate the effectiveness and/or efficiency of the operations.

BUSINESS PROCESS IMPROVEMENT /
REENGINEERING
Radical approach of process improvement and is more likely to be imposed from above and
outside consultans.
QUIZ NO. 1
GOOD LUCK
NO. 1

Which of the following statement is true?

a) MAS engagements involve routine and are repetitive in nature.
b) Being a CPA automatically qualifies a person to render the entire range of management
services.
c) Management audit is one of the areas of management consultancy that is not directly
related to accounting and finance
d) The areas of management advisory services are much more limited than the traditional
auditing and taxation services of a CPA.
NO. 2

The type of problems faced by an entity that involves conditions that have worsened and
demands urgent actions is known as
a) Progressive problem
b) Opportunistic problem
c) Corrective problem
d) Unsolvable problem
NO. 3

Which of the following areas will not be classified under Accounting and Finance Services
a) Personnel recruitment and training
b) General and cost accounting
c) Marginal income analysis
d) Capital investment
NO. 4

The basic analytical process applied in consulting engagements include

1. Definition of problem
2. Implementation of the recommended solution to the problem
3. Development of the solution
4. Identification of objectives
5. Fac-finding and analysis.

The order in which the above-mentioned steps are generally applied are :
a) 1,2,3,4,5
b) 4,1,5,3,2
c) 4,5,1,3,2
d) 4,1,3,5,2
NO. 5

Common outcomes desired from business planning and development generally include the
following except
a) Increase in market share
b) Development of new products
c) Internal structural reorganizations
d) Better-trainer personnel