Business Consulting

A Definition

So what is consulting, and who are consultants? According to Wikipedia, the word consultant owes its roots to the Latin term “consult-are” that means “to discuss”. No wonder consultants have a point of view about everything. Wikipedia also states that consulting is providing opinion, advice, counsel and to deliberate together, on professional matters. But this definition is too broad. This makes anybody who provides advice on any professional matters a consultant. A better definition can be found in the Consulting Industry Overview posted by University of Buffalo School of Management, stating that consulting is advising corporations on a variety of business problems. These problems come in all hues and sizes – from developing the strategy to enter a new market (strategy consulting) to planning a corporate restructuring (management consulting) to reducing the time to market of a product (business consulting) to creating a technology road-map for achieving the business objectives (IT consulting).

I will now hazard an attempt to elaborate these categories of consulting in simple terms, though as I had mentioned earlier, consultants might have widely divergent points of view about the same.

Strategy Consulting

Strategy is the art of making a decision on what to do – as well as what not to do – in order to achieve a long term objective. Strategy consulting can constitute of elaborating the objective (deciding what an organization should focus on, given the current and future business environment), evaluating the alternatives in the “positioning” of an organization in order to achieve the objective and helping the organization decide on the appropriate course of action to follow. Simply put, strategy consulting involves advising organizations on “what to do”.

Management Consulting

Management can be termed as the efficient and effective utilization of an organization’s resources and capabilities for the realization of its strategy. Management consulting is thus advising the management on the activities to be performed for managing the organization. This includes identification of initiatives as well as prioritization of the initiatives in alignment with the organization’s strategic direction. Management consulting is often about supporting the management decisions by evaluating the alternatives, their benefits and their impact on the organization. Thus, management consulting deals more with how to manage an organization in its journey that has been determined by its strategy.

Business Consulting

The difference between management consulting and business consulting is often related to the “scope” of consulting or the scope of the problem. Management consulting typically deals with the problems that are faced by the organization and their scope covers the entirety of the organization. Whereas, in business consulting the scope of the problem is often limited to specific business aspects. For example, consulting on how to optimize the free cash flow of an organization is business consulting since its scope is limited to finance. However, consulting on how to integrate two organizations will be management consulting since its scope will be much larger – including operations, finance, people, culture etc.

IT Consulting

For people from the IT services industry, this is probably the easiest to relate to. Whereas, for people outside the IT industry, this is the most difficult one to explain. IT consulting involves determining how the IT landscape, processes or operating model of an organization should look like so that IT can most efficiently and effectively support the business objectives and business strategy. Most of the times, IT consulting follows business consulting which in turn follows management consulting. However, this is not always true as it also depends on the consulting objective and the role of IT in the organization. For tech companies, IT is the business so the distinction between business and IT consulting is often blurred.