What Value Do Consulting Firms Add to a Business’ Operations?

Written by . Posted in Consulting Industry

Businesswoman drawing a diagram during the presentation at office

Management consultants are known to solve problems. They are hired to assess the business operations of an organization and propose solutions to improve overall efficiency. However, despite their prestige, management consultants face criticism from skeptics who question their worth and ability.

Criticism Consultants Face

Consultants face criticism both from clients and management scholars. Some criticize the cost of hiring a consultant, particularly those from top-tier firms. Clients question why consultants charge $2 million for a few weeks of work and doubt whether the recommendations provided are really that beneficial to their businesses.

Consulting firms are sometimes accused of making empty promises, stating the obvious, and even lacking the relevant experience on which to base their recommendations. And many clients consider the high fees consultants charge unreasonable.

Aside from the value of their work, some consultants are criticized for overusing buzzwords, while others are condemned because they fail to develop plans that can be executed by the client organization. Moreover, many companies are disappointed with the sustainability of the results. Although most consultants do promote sustainability, such expectations are not  guaranteed after project completion.

Additional criticisms include reselling similar reports or failing to customize research reports, lack of innovation, overbilling, and lack of clarity in regard to deliverables.

Well, that’s just one side of the story.

Value of Management Consultants

Management consultants, particularly those from top-tier firms, have proven to provide invaluable insights to many companies around the world. Some of the most important benefits they offer an organization include:

Impartial Advice

Consultants can give unbiased advice because they are not conflicted. As they are independent from the organization, they can provide unprejudiced observations and recommendations. On the other hand, internal consultants tend to be conflicted and  are frequently reluctant to give harsh yet accurate recommendations to their peers. That’s why many international companies with internal consulting capabilities solicit advice from premium consulting firms. They realize the value in bringing in external consultants who can  can truly assess the company’s operations.

Dedicated to Solving the Problem

A focused team of smart people who are dedicated to solving the problem is an extremely valuable asset. As consultants are generally unbiased, they can focus their attention on a particular problem. Consultants are hired to execute a defined project and leave when results are delivered. They are definitely more efficient in handling the company assessment and improvement projects compared to the current employees who are bogged down in their daily tasks.

Political Cover

As consultants are treated as an external force, they are a handy scapegoat. CEOs who are reluctant to make an unpopular decision often hire a trusted consulting firm to do the dirty work. In many cases, companies find it hard to take the next step, particularly if it involves a risk such as developing a new business line, layoffs, benefit reductions, and other major operational shifts. The board can easily distance themselves from any unpopular decision by hiring external consultants who will get the desired results while taking the fall in case things don’t go as planned.

Access to More Data

Even if obliged to discard specific company data, top-tier consultants can conduct analysis and leverage company-specific data to craft their own intellectual property and utilize it to help other companies in the future. Also, reputable consultancies have a wide range of experience across different corporate cultures and industries. They are adept in best practices in many environments and functions and can effectively recognize the most viable solutions as they apply strategies used in similar situations.

Fresh Perspective

Companies experiencing challenges often need a fresh viewpoint. Consultants add value to operations by providing new insights and pointing to underlying problems. Critics may say that consultants are just selling “hyped-up common sense,” but for existing employees who are too busy with daily tasks, it can be easy to lose sight of the overall picture.

Although management consultants face a lot of criticism, many global organizations still seek their services in an effort to overcome recent economic difficulties. It is safe to say that top-tier consulting firms continue to bring value to business operations.

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