The Consulting Continuum 2018 was organized on 18th August 2018 and witnessed a series of lectures and talks centered on the theme: ” Evolution of Consulting: Insights on Strategic Execution” Following speakers participated for delivering lectures at Consulting Continuum
The foundations of modern consulting can be traced to the late 19th and early 20th centuries when the first consulting businesses studied manufacturing to improve workplace productivity. Many companies began contracting consulting firms to help improve worker and production efficiency. One can say that management consultants had a very different professional and ideological origin. Since then, the need for services has grown with the population. While the types of services provided have evolved with the economy, the expansion of business has happened on an international scale. Consultants and their clients are constantly witnessing a fluidity because of alterations in government legislation, evolving business trends, fresh technology, globalization, and many other factors. Clients and consultants interact via mobile technologies, social media, cloud computing, and collaborative software. Clients anticipate consultants to be accessible round the clock. Businesses are implementing next-generation technologies such as mobility and cloud computing and advanced analytics software in an attempt to drive performance, and consulting firms must provide advice and “thought leadership” regarding these technologies. Today the best companies look at strategy less as a plan and more as a direction and an outline of decisions. Effectually, an organization’s strategy is the summation of decisions it makes and implements over time. This school of thought focuses the leadership on making near-term decisions while keeping the longer-term purpose in mind. But it does not presume that there is only one and only one path from here to there. Strategy execution is a complex and interconnected process involving planning, decision making, and most importantly people. In today’s VUCA world where the best-laid plans can go haywire, firms that are the quickest to react often come out effectively on top. Arduous exigency planning is as important as meticulous action planning. Experts believe that we identify the most significant known unknowns linked with the firm’s strategy, lay down solid steps to modify the course if we see an unexpected change in the environment. Putting in place mechanisms to continuously monitor the market and competitive conditions can go a long way. Digital Transformation is a game-changer. Consulting companies undertaking Change Management outside of technology experience a stormy business environment. Strategy consulting firms find it challenging to provide value in pure studies, and hence the idea of strategy execution has gathered momentum. Below were the sub-themes for the seminars: 1. Skill-sets required to succeed as a consultant in a hyper-competitive market In the last couple of decades the consulting industry has seen unprecedented growth. Economic shifts, technologies changes, and rapid globalization have paved a way for fast changing standards. In the data-driven age where valuable information is available at your fingertips and almost at no cost, Consulting has evolved from its past role of strategizing to implementation and more analytical in their approach. To stay relevant and marketable millennial consultants not only have to succeed the challenges that are present today but at the same time, they must defeat the myopic vision and keep an eye and be prepared for the emerging industry trends. In addition to leadership and communication skills, consultants must show agility and resilience in their approach to stay at the top of the industry developments. In addition to these skills, future consultants need to be very strong in their work ethics part as they are expected to zero down on the pain points without any bias. 2. Redefining leadership priorities in a digitally transformed organization Speed is the currency of the digital economy. -Marc Benioff, CEO, Salesforce Digital in a way is becoming an ersatz for all things business and it is going to be the way forward. The business world is currently at an inflection point. Industrialization 4.0 is forcing organizations to either face the digital wave and win the digital wars or face their own Kodak moment. As organizations try to pull in all stops to win in this new digital era, it’s the imperative of the leaders to make it happen from the ground up. Senior executives in all industries agree that leading successfully requires a specific set of behavior, competencies, and virtues – that need to align with the demands of the time. The current wave of industry disruption is powered by digital technologies and business models like blockchain, virtual reality, analytics, mobile solutions, cloud systems, machine learning, connected devices, and digital ecosystems. These digital innovations are responsible for the rapid pace of change, which in turn is making it harder for the leaders to precisely create and sustain levels of competitive advantage. The digital era has created two kinds of players globally – the digital natives and the digital non-natives. The digital natives are the new digital organizations like Uber and Airbnb that are envisaging new solutions for doing business. The non-natives are the incumbent companies that are facing disruption of their traditional models of doing business in this new digital environment. Leadership has been historically associated with a certain set of universal virtues and competencies, such as charisma, integrity, resilience, decision-making capability and most importantly, communication skills. But different economic circumstances, cultures, social values and technology landscapes require different leadership approaches. The volatility of business domain which is driven by fast, accelerating digital technology and business model changes requires a new leadership approach today. It is possible for traditional organizations to compete and win in this new era of digital transformation if the leaders can adapt to it and redefine their responsibilities and approaches. One can look at the leadership success stories of large incumbents such as GE, Axel Springer etc. to know that not everything is lost; the prognosis for incumbents is excellent, provided they are managed and led in a strategic and agile manner. 3. Shift in the future workforce skills – an impact of Automation As companies are coming up with innovative ways to sustain in such competitive markets, so does the skill set required by the employees to come up with talents beyond the range of automation. Leadership skills, managing workforce, social, and emotional skills are some of the examples that will be required in the future more often than today’s technological skills. The major part lies in how the workforce will respond to such changes in different sectors while manufacturing sector shows clear hope in future towards automation but when it comes to the healthcare sector, where physical skills, as well as social skills, is required it’s still lacking behind. Different sectors will certainly adapt differently for the right skill sets that will open doors for several institutes imparting skills that are beyond the control of automation. The concentration of hubs with technological advances will lead to displacement and organizational changes at every step. Strategies will change among different domains, human resources will now need to categories their employee as early adopters or slow adopters, redefine their work to efficiently use the resources as per the environment is providing them with. Demand for high skill will certainly upsurge with uncertainty or instability across low skilled workers. A major question lies in the tactics followed by the government either to safeguard its staff or gradually benchmark the skill sets and work with the required efficiency to sustain profitably in the market. The central government is already working in collaboration with NITI Aayog to privatize PSUs even some of the profit-making ones in recent times. It clearly shows to sustain and adapt according to market one must go through the transition the recent times are showing from large scale to small scale organization. For Repetitive and monotonous work, or for which basic and low cognitive skills are required will be replaced by automation but platforms where higher cognitive skills are required- man’s creativity and insights gathering skills from complex interpretation is required, automation will take a certain time to reach to that level. 4. Levelling the patent field as consulting firm So, the question that often comes to a beginner’s mind is that what is a consulting firm, the answer to which simply put Is a business consisting of one or many experts who offer professional advice and in turn solutions to any kind of business problems. In the further read, we would go through some of the methods that when put into practice help a consulting firm to level the patent field and boost into becoming one of the best in the business. There are various factors that make a firm what it is but to become the best it needs to go that extra mile and adopt techniques which would really make it the distinguished and most sort after company in the business. The first in our view being flexible, be it the projects or the challenges. A firm need to be open-minded as well as determined to sail through any situation. Secondly, having great work ethics. Call it discipline or strict guidelines but meeting deadlines is a must and is non-negotiable. Customer demands are to be given utmost importance. Third is being persistent, one of the major motto of a firm should be to never give up. Not all projects will be easy, there will be frictions, unforeseen circumstances as well as negative feedback but the attitude should be to learn from every situation and implement in the next. Fourthly, there should be adequate investments on the training process of the employees to keep them up to date with the recent happenings and so that they have sufficient knowledge on the field they are working in. The skills and knowledge gained in a project should always be implemented in the next one. Moreover, a firm always needs to look at the bigger picture and think ahead of time. The ability to somewhat predict the future happenings is a rare skill and one that is developed over time due to sufficient study. It is an important aspect and a firm should invest in people and help them develop this skill. Now that we have developed a substantial knowledge on the most necessary ways in which a consulting firm can be a world beater, let us consider the more intricate aspects of it and few points that the already successful businesses have implemented over time to be at the top despite tough situations. Firms need to find a way to exploit specific knowledge gaps in the market and be an expert in the niche field. Next in line is that a firm should always put the relationship with the client before the revenue. A strict no is to talk about the cost without knowing the client’s specific requirements, thus it is always said that a successful consultant always listens before speaking. Another major point being, a firm should always sell results and not services. Put the maximum focus always on the result. Finally, any downtime should always be reinvested in to further business development. These points along with having expertise would make a consulting firm a world beater. 5. Consulting firms catching up the pace of increasing M&As Indian M&A sector received a huge boost with the Flipkart – Walmart deal. But preceding this deal, the path for M&A sector still looked very bright. The year 2017 alone saw M&A deals worth 40,961 million USD and a total of 1011 deals in number. Government regulations and the acts revamped also played a major role in the increase in M&As in the subcontinent. The entrepreneurial strategy and the mindset of the nation is also a major contributor to the increasing M&As. But this has provided both a challenge and an opportunity to the Transaction Services of Advisory of which a few are included below: 1. Target Research, Pre-Deal Evaluation, Bid, Sale & Purchase Agreement 2. Due Delegation, Integration Planning 3. Involving employees, Cultural Integration 4. Follow up financial review Many Concerns of the companies like Gaining quick control of the company, reducing leakage of data and value are to be taken care while addressing the above-mentioned activities. For this, the Advisory firms come up with: a. Building a realistic timetable b. Control over the process c. Dedicating adequate resources d. Minimizing warranties and indemnities. 6. Capabilities the Consulting firms require to relieve stress points of the supply chain. A well-designed supply chain can reduce cost, provide a competitive edge, increase revenue, delight customers. Earlier supply chains were designed to produce and deliver on a just-in-time basis to ensure lean operations, stability and efficiency. But with the advent of industry 4.0, changes in the relative attractiveness of manufacturing locations, demand, consumer preference, increased interdependencies, global uncertainty has exposed supply chains to vulnerability more than ever. Emerging markets, turbulent trade and capital flow and protectionist sentiment in the developed countries in addition to regulatory pressures add to the woes. As earlier said a supply chain play determining role in the company’s success, it is crucial that these functions become more resilient in responding to fast-changing conditions also to overcome its hard-won stability. But it is easier said than done as it requires far-ranging implications throughout the business, much more dynamic information sharing and cooperation among all stakeholders in the supply chain. Nonetheless, the rewards for it are worthwhile. Ultimately supply chains which are resilient, focused and adaptable to changing conditions are the ones that can thrive amid heightened VUCA (volatility, uncertainty, complexity and ambiguity) world to seize competitive advantage. 7. Can Increasing revenue from Consulting raise conflicts of interest for Big Four? The Big Four firms – PwC, EY, Deloitte and KPMG have become the ‘one-stop shop’ for consulting, accounting and advisory. They have transformed from handling audits of most of the publicly listed companies to offering legal services, insolvency procedures and many more. Experts claim that the shift of this balance of activities could threaten independence, auditor quality and culture at the top. The Big Four’s non-audit work is coming into more scrutiny than ever before. This is due to a possibility of a conflict of interest with former, current or a future client. Critics argue that an accountancy firm might have a biased approach to a client’s audit if it also has a lucrative consultancy contract with the company, advising it in areas such as tax. Most in the business community have long thought that bigger is better. But this mindset is set to change. Today technology has enabled increased operational agility, procurement, and outsourcing. Small professional services firms are definitely at an advantage when compared to the sectored behemoths. They are able to react to changes in technology, market conditions or client needs, and decide more quickly on, for instance, recruitment and procurement. As our technology evolves each day and we see a shift in client demands, the world of the accounting industry keeps adapting. Hence the Big 4 firms are evolving, so long as their quality is not being compromised. Tapping into this area bring on additional value to their clients. 8. Facing the Geo-Political risks as a Consulting firm Nowadays political risk has become very difficult to understand. The leaders of current times are different from the earlier ones. There are many other players in the business environment other than the national governments who brings a lot of risks. An event in one corner of the world affects the whole world. Some examples are anti-Chinese protests in Vietnam has created cloth stock-outs in America, Cyberattack by North Korea on a Hollywood movie studio, Brexit and the US Presidential Elections. These 21st-century political risk may significantly affect the business of the companies. The impact can either be positive or negative. These political activities are not always initiated by the government but can be carried out by other players. Companies need to look out for these activities for efficiently managing their impact. Few of the most important risk is political situations, innovations in the field of technology and supply chain. With the increase in complexity of the political risk, their management remains straightforward. Correct foundation with emphasis and building upon existing best practices can identify core competencies and gaps in the organisation which can help them in this unpredictable time. Just basing the global decisions on the economic data won’t help the businesses. The understanding of geopolitical context is very important. Political risk analysis and assessment is a complex process and different from economic analysis. Consulting firms have a great role to play in managing these geo-political risks for the companies. They cannot rely on the past information and patterns for guidance. Exploring a range of outcomes is required to identify the unknowns and prepare for them. They need to examine a lot and ask the right questions. The consulting firms need to test assumptions which are the basis for their strategies and develop models that can test risks. 9. Bankers: Frontline warriors in India’s coming Fintech revolution The term Fintech is defined as the computer programs and other technology used to support or enable banking and financial services. In the recent years the term ‘Fintech’ has really become a buzz word and it is impossible to ignore this term irrespective of the work that one is aligned with but definitely, some professions are more aligned to the practical application of Fintech, one such are the bankers. India has created an ecosystem that provides the perfect amount of boost triggering the coming Fintech revolution. According to makeinindia.com, the Indian Fintech software market is poised to touch USD 2.4 billion by 2020 from the current USD 1.2 billion in the financial year (FY) 2016. As is the case of most developing nations, Indian economy is also significantly cash driven but it has taken the perfect advantage of the Fintech revolution. This industry provides a range of options such as e-wallet, lending and insurance, and such varied options have changed the way people carry out their daily transaction. Though the progress has been rapid but there is an opportunity for more, such as the demography is primarily youth, furthermore, 80% of the transactions still being carried out is through cash as opposed to 21% in the developed economies. About 70 million bank accounts are inactive and 19% of the population still being unbanked. But with the support of the relevant stake holders, the path is much smoother than it seems at the first glance. In India, the government and the regulators such as Reserve Bank of India (RBI) and Securities Exchange Board of India (SEBI) have had a very encouraging attitude towards the Fintech venture. Be it the ‘Startup India’ initiative or the ‘Digital India’ initiative or the tax and surcharge relief schemes, the Indian bodies have always had a positive outlook towards the Fintech industry and due to the accumulation of all these factors, according to a PWC report the expected Return on Investment in Fintech projects in India is 29% against the world average of about 20%. But this is just half the story as one of the major contributors to the coming revolution is going to be the bankers. As in the case of wars, the field army matters the most as they are like the first line of defense, similarly here an active involvement of the bankers is of utmost importance. An example being, Bank of India offers a wallet in collaboration with Paynimo that is powered by Tech process. So, the bank officials need to have an adequate amount of knowledge and expertise in the field of Fintech so that they can make the customers and users understand the importance of going digital and are also able to solve their problem. The banking system in India is very huge and it employs many people of varied expertise. So, there needs to be proper training in a regular timely manner to keep the bankers up to date with the most recent development in the Fintech industry. Thus, this is how we believe that the bankers are the front-line warriors in India’s coming Fintech revolution. 10. Sustainability Consulting and Big Four 1. Sustainability strategy: This refers to the planning and strategy services that a consulting firm may provide – typically for an entire organization or a division. The aim is to help the clients innovate, satisfy stakeholders, gain competitive advantage, and empower their employees to integrate sustainability into their day-to-day activities. 2. Technical support: This focuses on the technical aspects of sustainability - such as green building designing and construction, waste diversion and recycling, renewable energy and energy efficiency wastewater services etc. 3. Testing, Auditing, and Verification: This refers to the review of the sustainability data either on a corporate level or a product level. 4. Visioning and Facilitation: This focuses on the “big picture” of sustainability, working with clients to brainstorm and creating new models for companies, communities, and societies. 5. Sustainability software: This refers to the development and sales of sustainability software which includes EHS management, carbon accounting, and sustainability reporting platforms. Sustainability consulting refers to the insights and recommendations that help clients (organizations) take critical decisions pertaining to sustainability strategies, the environmental and social impact of operations, and sustainability-related growth and cost opportunities. Holistically speaking, sustainability consulting can be classified into the following five broad buckets – Businesses, non-profit organizations, and government agencies can develop sustainable business practices to minimize their environmental footprint and increase their profits and efficiency. Sustainability involves meeting present requirements without jeopardizing the future resources. Sustainability consulting firms help clients reach and maintain their social, economic and environmental sustainability goals in a way which ensures that the benefits outweigh the implementation costs. Currently, there are many boutique consulting firms that are involved with sustainable consulting like Accountability, BSR, Context, Forum for the Future etc. The Big 4 – Deloitte, PricewaterhouseCoopers, KPMG and Ernst & Young – are the world’s four largest audit firms that are now focussing on sustainability consulting as well, given the growing demand amongst clients to go for sustainability. With kind of expertise and scale and scope of operation that the big 4 has, it would bring about a positive change in the way businesses strategize and operate as a whole. 11. Increased Buyouts: A sign of consolidation and an end to family owned businesses in India? Buyouts were rare in India till 2005-07 but the global boom along with the desire to part of the Indian story pushed a few deals. As a result of 2008 crisis, it seemed like the end of a new beginning to the Indian private equity which was evident in 2010 as it saw only 3% buyouts of total Private Equity. But the real story kept revealing then which saw a steady increase in deals both in terms of value and volume. India witnessed a record number of deals in 2017 which is expected to increase in 2018. The factors that contributed to this are: 1. Forced deleveraging due to excess leverage in the past 2. Succession Planning 3. Need for growth and desire to attract top talent 4. Greater control in Decision Making Of all the deals, India has seen a phenomenal change in the investments in technology. India has been emerging as one of the key markets for tech Private Equity/Venture Capital. In the Indian and South East Asian markets, India alone contributed for 56% of deal value in tech sector. Increasing NPAs in India forcing banks to tighten the screws on funds made the tech firms to look up to private investors. Around 10-12 companies that are undergoing insolvency proceedings in the National Company Law Tribunal (NCLT) are now the potential targets of global private equity firms with probable deals of around 50,000 crore INR to 60,000 crore INR 12. Importance of Information management to Consulting firms and converting it to insights During the last few years, so many technological changes have taken place and have impacted the ways things were being carried out. The use of technology in our day to day lives is generating lots and lots of information. This data generation is creating new growth opportunities for the company. The main challenge in front of businesses is to analyse this information to get insights and use them to have an advantage over others. Information management has become essential for businesses and they want a clear strategy to earn benefits from it. The consulting firms help their clients in mining data for the right insights. They help them to run their businesses based on the data insights. The focus is on taping the potential of analytics to gain more and more insights. These insights can then deliver competitive advantage, operational excellence and sustained growth. The solutions offered in case of information management includes strategy framing, data management, information optimisation and environment building. Information management is not just for the data scientists/analyst and the IT Department. It is very useful for the management and should be an organizational strategic opportunity. Carefully acting upon the insights is the most important step and should be carried out in a proper manner. Efficient change management with risk assessment and mitigation can help this. Development of not only external capabilities but the internal one can help in the change management. This will allow identifying critical parameters that can help in decision making. The approach followed by these consulting firms can be summarised in four steps – • Identification of sources of information • Extracting insights and building models for the best ones • Adaptation with technology & infrastructure management • Optimisation & governance Thus, it can be concluded that information management has become excessively important for the businesses and consulting firms need to work more towards this. They need to learn the art of converting this information collected into actionable insights for the sustained growth of their businesses. |
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