Utilizing business consulting services is useful, effective and potentially very accessible. But, with so many consultants, publications and vendors weighing in with their own perspective and opinions, it can be very confusing.
Business consulting refers to the industry and the practice of helping businesses improve their performance, usually through the analysis of business problems and development of plans for improvement. Businesses may choose to invest in business consulting services for a number of reasons, including gaining outside objective advice and recommendations, to gain access to the consultants’ specialized expertise, or simply as temporary help.
Because of their exposure to and relationships with numerous organizations, business consulting agencies are also said to be aware of industry ‘best practices.’ However, transferring practices that have successfully improved one business to another is not always practical or feasible.
Business consulting agencies may also provide managed services, development of coaching skills, IT solutions, technology implementation, strategy development, or application management services. Business consulting agencies generally bring their own patented practices or frameworks to identify problems, and to serve as the basis for recommendations for more effective or efficient ways of performing business tasks.
Many business consulting agencies have expanded in the last few years to provide other services, such as IT solutions, human resource consulting, and other managed services. So-called ’boutique’ consultancies, however, are smaller organizations specializing in one or a few of the above services.
Similar to business consulting, management consulting is becoming more prevalent in non-business related fields as well. As the need for professional, informed and specialized advice grows, other industries such as government and not-for-profit agencies are turning to the same managerial principles that have helped the business sector for years.
One important and recent change in the industry has been the spin-off or separation of the consulting and the accounting units of the large diversified firms. For these firms, which began as accounting firms, business consulting was a new extension to their business. But devastated by a few highly publicized scandals over accounting practices, such as the Enron scandal, accounting firms began splitting from their business consulting units, to more easily focus on and comply with tighter regulatory scrutiny that arose following the scandals.
Business consulting is a fast growing industry, with growth rates surpassing twenty percent in the 1980s and 1990s. As a business service, consulting is highly linked to overall economic conditions. The consulting industry shrank during the 2001-2003 period, but has seen a slowly increasing growth since. In 2007, total global revenues for business consulting are expected to exceed the $300 billion mark.