The consultancy industry is raking in billions of dollars for various services. Studies done show that a large percentage of this money goes into paying for data that has either no use or not possible to apply and recommendations that are poorly thought out such that their implementation will not add any value to the organization.
The problems above arise because those in charge with management do not have a good understanding of the objectives that they want the consultancy engagements to achieve. So what is the significance of business consultants?
Diagnosis
Many of the business consultants have styled themselves as diagnostics experts. The consultant should document his approach and methodology in terms of engagement since he may unearth issues that the management may not be comfortable with. Secondly, the business consultant should work jointly with the client’s members of staff since they understand the company’s business environment and processes thoroughly.
Problem Solving
Those charged with governance will give business consultants very complex problems to work them out. Cost management decisions such as buy or rent decisions need a thorough evaluation to understand the viability of the model, investment or divestiture decisions and balance sheet restructuring.
The business consultant will be hired because the decisions highlighted above usually are one-off and the company may find it uneconomical to employ staff to be in-charge of such a docket.
Recommendations
At the end of the engagement, the business consultant will give a report that lays out the risk identified, weaknesses noted, levels of risk, and the recommendations. The recommendations will enumerate the steps to be taken to improve the processes. The management is given a chance to indicate the timelines within which they will implement the recommendations.
Unfortunately, most of the recommendations given by the businesses consultants are rarely implemented since the organization may feel that the consultant did not address the problems at hand.
Implement Changes
Most organizations will prefer giving the business consultant a second engagement to oversee implementation of the recommendations that he made. Since people tend to resist change, management may feel that a pair of hands from outside the organization may be the much-needed solution.
By also engaging the consultant to lead in the implementation of the findings he came up with, it gives management an opportunity to see which ones were not practical to implement. Secondly, when a business consultant is given an opportunity to do the implementation, he is likely to turn down the offer since all those impractical recommendations he had may not be practical to implement.
Providence of Information
A lot of business consultants have expertise in obtaining information. They have the necessary tools that aid in market surveys, feasibility studies, cost studies, attitude studies among others. In most cases, the firm may not be having the time and human resources to carry out these tasks. The information that the business consultant gathers depends largely on the terms of reference drawn by the management.