Consulting Network » Sallary http://www.consultingnetwork.co.in Fri, 13 Jan 2012 04:39:53 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Indian Consulting Market: An Insight into the Factors Restricting Growth http://www.consultingnetwork.co.in/indian-consulting-market-an-insight-into-the-factors-restricting-growth/857/?utm_source=subscriber&utm_medium=rss&utm_campaign=rss http://www.consultingnetwork.co.in/indian-consulting-market-an-insight-into-the-factors-restricting-growth/857/#comments Tue, 02 Jun 2009 15:13:51 +0000 Ashwin T Ananthakrishnan http://consultingnetwork.co.in/?p=857 The Indian Consulting Industry has been experiencing a resurgence in the last few years. This industry has been making rapid strides in the Indian market over the last decade and has witnessed a significant increase in the number of new entrants in this field. The solitary objective of the participants in this market has been to gain maximum market share in this highly consolidated and  competitive environment, primarily by capitalizing on the apposite factors driving it.

The Asia-Pacific (APAC) consulting industry generated revenues worth $33.5 billion approximately in the year 2008 and registered a compound annual growth rate (CAGR) of nearly 4.1 percent from 2007. The market is further expected to experience steady growth and is anticipated to generate revenues of approximately $39.2 billion by the end of 2012. Japan has dominated the APAC market by contributing the maximum revenues with a share of nearly 67.2 percent. Out of the APAC total market, India’s contribution stands at $1.81 billion approximately with a share of approximately 5.4 percent of the total APAC market size. Information Technology (IT) including e-commerce, telecommunications and so on followed by Corporate Strategy, Outsourcing Services, Human Resource Management, and Operations Management have been some of the prominent business divisions in the consulting market. The below graph (Figure 1) portrays the percentage split of the total APAC revenue across difference business units:


Why Consulting?

The necessity of moving ahead in the competitive structure or chain and gaining optimum market share in today’s highly competitive markets has made companies across verticals opt for third-party consulting and advisory services. This has made consulting an indispensable function for companies these days. The differentiating factor that each company puts forward in order to achieve competitive edge over their rivals has been one of the important factors of success for all the companies, specifically in the Indian market, and this is impossible with out the knowledge of market trends and behaviors. Moreover,  the fact that this success can be achieved only by implementing the right strategies from time to time and by taking pertinent decisions considering the market scenarios they cater to have prompted companies to subscribe for the products and services offered by consulting firms. The primary reason behind this urge is because consulting firms interact or are involved with the all the market participants or industries participants on a regular basis and are very well informed about the market happenings in each of the sectors. This continuous market tracking service coupled with technical industry know-how facilitates consulting firms to help clients take the right decision at the right time as well as relieve them from the pressures like ‘time-to-market’ a new product or production planning or in fact any challenges in any business divisions. In a nutshell, need for the appropriate market facts, the urge for companies to face the market trends by applying third party & unbiased thoughts, the call for a complete 360 degree view of the market that each company participate in, and the requirement to take apt decisions by companies to outpace competition are some of the factors that drive the growth of this industry.

Challenges Faced by Emerging & Boutique Consulting Firms

Acquiring the right set of talent challenges the firm in matching the client’s requirements:

Providing meaningful insights with optimum clarity and offering strategic advisory solutions on diverse subjects based on the analysis done are the two important aspects of consulting. These are also the two essential factors that each company looks out from the consulting firms. Even though, delivering all these factors together bind a consulting firm’s success, this can only be achieved by having the right set of manpower and appropriate pool of talent. Acquiring the right set of people to match every client’s broad range of requirements has been one of the challenges that smaller consulting firms in the Indian market face. This challenge has resulted in a change in the trend of hiring manpower in consulting organizations of late. Previously, consulting firms were primarily looking at hiring specific industry expert or any individual market expert. Even though some firms continue to sustain this model of hiring, most of the emerging firms in the country focus at hiring individuals who are flexible and those who can analyze any market or industry at a given period of time. This trend is expected to crystallize in a few years down the line. The reason for the same is two fold. One, the firms can leverage on their mixed pool of talent and assign any projects to any one individual or more and secondly, this facilitates the firm to considerably cut costs of engaging a single market expert.

This factor is even more risky for smaller and boutique consulting firms compared to the established ones, as they are much smaller in terms of their size, operations, and financial capabilities. Although, these firms offer only niche market services compared to other traditional firms, some of these boutique firms also face powerlessness to train their new employees due to the lack of proper resources, which restrains the firm’s growth further.

Increasing rate of attrition affects the organizational growth:

One other challenge that Indian consulting firms, both established as well as emerging ones face is the increasing rate of attrition. This can be associated with multiple reasons like the increasing growth opportunities in the market for consultants, attractive compensation packages, or correspondingly the cost cutting measures that companies adopt, and also on the cost- benefit ratio from the companies stand-point although the latter is applied only during acute market crisis. However, better remuneration packages on offer and better career prospects available are the two most common factors that consultants give importance to. Apart from these two factors, other common reasons range from dissatisfaction of their job role to the simple reason of lack of post-graduate sponsorships available with in the firms they work. All together, a suitable work-life balance, greater leadership roles in front, with better remuneration and benefits are some of the common factors which consultants expect in each company and with consulting becoming more mainstream today, the rate of attrition in this industry is expected to gradually slow down in a few years down the line. The impact of this factor is comparatively low on established firms because they have the best set of experienced consultants who can act as a back-up in case of an emergency situation. However, the impact is pretty severe on smaller firms as they are small in size and operations and also due the fact the time taken for smaller firms to replace a consultant with a new one is longer compared to the bigger firms. The below table shows the common reasons for attrition and what companies should do to retain talent:

Common reasons for attrition

What companies should do to retain talent?

Poor Pay

Better Organization Management

Poor Career Development

Career Development

Better Opportunities Else Where

Flexible Benefits

Poor Projects

Salary/Bonus/Incentives

Office Politics

Extended Ownership

Poor Management

Profit Sharing

Better Offers

Support Structure

Work/life Balance

Better Management Leadership

Source: Top-Consultant.com

Maintaining long-term relationships with clients affects the long-term existence of the firm:

Maintaining long-term relationships with existing clients is one other key challenge that the small and emerging consulting firms face. This is largely due to the fact that the Indian consulting market is more or less a buyers market. More than convincing the companies to sign-up proposals, factors such as cost-benefit ratios, value added services and so on play a pivotal role. Numerous market participants and increasing market entrants with a variety of project deliverables have leveraged organizations by giving them the option to choose the right consulting firm for the right price for a project. However, this factor should be perceived on a different notion when it comes to a proposal with bigger and established consulting firms who are the pioneers of this Industry and who have proven success record in delivering results.

Highly competitive market influence firms in gaining market share:

Smaller and emerging firms also face the challenge of gaining market share. Regional consulting firms have lesser market share compared to the bigger established firms who always top the competitive chain, even in the Indian market. Like wise, global players such as Bain & Co., McKinsey & Co., Boston Consulting Group and so on dominate the market for strategy consulting with nearly three-fourth of the market share in their hands, leaving the rest to the smaller and emerging firms. On a related note, most of the above mentioned business divisions are being monopolized by the big guns there by leaving very little scope for the smaller and emerging consulting firms. However, a noticeable trend in the recent years is that the smaller and niche firms are gradually taken seriously than the bigger ones. Of late, companies have started experimenting with niche firms by working with them on smaller regional projects but at the same time partner with the trusted bigger ones for the larger and other global projects. Nevertheless choosing the right consulting firm largely depends on the bids or request for proposals (RFP) that companies put forward and the proposals they receive from these consulting firms. While attracting new clients will always be an easy task for the established consulting firms due to their proven success and credibility, this factor acts as a major barrier on emerging firms as developing and converting a relationship into a business deal is comparatively tricky for these firms owing to their poor strategic alliances, lesser corporate experience and so on.

Off shoring/Outsourcing to India acts as a challenge as well as driver:

Off shoring back-end functions to India has obviously been a market driver, not only for the consulting industry but for the country as a whole. However, from a consulting firm’s perspective, though this factor helps expansion and globalization, some companies feel that it restrains the company development and growth in the outsourced regions primarily because of cultural differences and other barriers related to work. Professional dissimilarity, differences in attitude, adjusting to time zones, accent’s, and differences in a person’s commitment to work have been some of the factors that American & European counterparts consider as challenges, when it comes to off shoring work to India. And these are also some of the challenges that small and emerging consulting firms in India face, due to which the company brand name and public perception is most likely to be hampered. However, this can be overcome if the firm acquires the right set of people, train them on flexibility and motivate them to work better.

‘Market’ as a Challenge affects routine businesses:

One of the other challenging factors which impact consulting firms, smaller ones especially is the volatile market conditions they experience. Even though this factor affects both the established as well as smaller emerging firms, the former have the capability to sustain and overcome the market downfall in a better efficient way due to their long-term existence and familiarity of the market, than the latter. One such situation to be quoted is the recent sub-prime crisis which more or less created a win-win situation for both bigger and smaller firms with respect to acquiring new projects, i.e., it created a situation where in the boutique firms could possibly capitalize on the market conditions to win a project over the bigger ones, primarily because of their reduced pricing and other cost saving offerings. However, a fact is that, such situations are real good opportunities for the boutique firms to prove their capability and credibility but in general most of the companies, totter in such situations.

Threat of Substitutes impacts new business development:

‘Threat of substitutes’ is one other key challenge that smaller and boutique firms face. Although the penetration rate of new entrants entering the market has been moderate for now, companies still has a lot of options when it comes to the RFP process for projects. Apart from the presence of big four consulting firms, there are numerous smaller and emerging firms in India who are yet to prove their credibility and who offer services at a reduced price compared to the others. Coupled with the reduced pricing, every new entrant into this market is coming up with differentiated consulting models and methodologies for attracting new businesses, and this again acts as a threat to the other firms. Existence of numerous firms, differentiated offerings, reduced pricing and so on has impacted the smaller firms in India by hampering the customer loyalty and also by making this market, a highly price sensitive one.

Conclusion

Although, factors like globalization, off shoring and outsourcing have made India a suitable destination for various companies, creating vast employment opportunities for the increased pool of talent, the regional smaller and emerging firms still face a lot of challenges such as the ones highlighted above. The firms catering to the Indian market alone are on a rough terrain compared to the bigger established firms who have global roots. This is primarily because global firms who are eminent and well-known have a better probability of converting proposals into projects compared to the emerging firms with in India who are yet to prove their credibility and offerings. However, the growing level of uncertainty in today’s market, increasing competition, consolidation, the scope for various business’ in India and so on will drive the growth and is expected to make the Indian consulting industry’s future, a promising one.

Ashwin T Ananthakrishnan can be reached at ashwin.ananth@gmail.com


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]]> http://www.consultingnetwork.co.in/indian-consulting-market-an-insight-into-the-factors-restricting-growth/857/feed/ 1 The Big 4 Life in India – Life at Big Consulting Firms http://www.consultingnetwork.co.in/the-big-4-life-in-india-life-at-eykpmgdeloitte-and-pwc/749/?utm_source=subscriber&utm_medium=rss&utm_campaign=rss http://www.consultingnetwork.co.in/the-big-4-life-in-india-life-at-eykpmgdeloitte-and-pwc/749/#comments Wed, 06 May 2009 17:42:09 +0000 Mohit http://consultingnetwork.co.in/?p=749 Big 4 accounting firms are amongst the most coveted and renowned firms in India. Approximately 50 – 55 percent of the workforce comprises of charted accountants, 35-40 percent being occupied by MBA’s and Engineer’s and remaining by other specialized degree holders.

Getting Hired

Getting into a Big 4 firm in India is a difficult task. Barely 3-5 percent of the hiring in Big 4’s is done through company’s website and job portal’s, most of the hiring is done through internal referral programs and external consultants

Tips on getting your resume noticed
1. Route your resume through an internal employee, higher the designation of the employee, more the chances of your resume being noticed.
2. Don’t clog your resume with excess clutter. Be to the point and precise. Focus on highlighting your leadership and teaming skills
3. Keep track of the financial cycles being followed in the big 4 firms, for example EY follows a July to July financial cycle. Hiring during the month of May and June is relatively less owing to budgetary constraints at the end of the year as compared to hiring in July, August where most teams are looking to filling in vacant spots.

Figuring out the Hierarchy

Though the basic hierarchy structure among the big 4 in India is pretty much the same, one may start as an intern and go upto the partner level. However, there are subtle differences.

For example, if you compare the hierarchy structure in EY and KPMG then you would realize that there is no Assistant Manager level in EY.

Not understanding the hierarchy structure before interviewing process can often lead to an individual being hired at the wrong level.

Service Lines

The services provided by the big 4 firms can be divided into

  • Statutory Audits & Tax Advisory
  • Internal Auditing
  • Transaction Advisory
  • Business Advisory
  • Other niche consulting Area’s

It is imperative for new MBA’s to decide their area of interest prior to an interview. It is difficult to switch service lines at a later stage.

Working Culture

Though each big 4 claims to have an individualistic work culture, the enormity of these firms and the prominent trend of employees switching between the big 4 firms has led to development of what can be called as the big 4 culture, some of the key characteristics of the big 4 culture are

1. Working Hours - One can expect a typical working day of approximately 12-13 hours a day. However, the lengths of your  stay in office or at the client site is totally dependent on your engagement team and manager and work load.
2. Trainings form an integral part of the Big 4 culture, you can end up clocking approximately 10 -15 hours of training each month. These training comprise of both technical and soft skill’s trainings
3. Quality and risk management practices also take up a major portion of your time at big 4 firms, you could spend a significant number of your working hour’s filling up forms and taking approvals.
4. Individual vs. the Team – There is a strong focus on teaming at all of the big 4’s, however, individualistic traits such as taking up the ownership, making decisions is also encouraged.

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