Lecture - Management Consulting: An Introduction - Andersen Consulting 2000
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Lecture – Management Consulting: An
Introduction
© Andersen Consulting 2000 1 2022/1/18
AGENDA
Introduction/Expectations
Example consultant company
Consulting: Nature, Trends,
Careers
Selected Methods (frameworks)
Research (some basics)
Graphics (from data to chart)
2 2022/1/18
AGENDA
Introduction/Expectations
Example consultant company
Consulting: Nature, Trends,
Careers
Selected Methods (frameworks)
Research (some basics)
Graphics (from data to chart)
3 2022/1/18ACCENTURE: MISSION AND VISION
Our Mission: Helping our clients create their future.
Our Vision: To become one of the world's leading
companies, bringing innovations to
improve the way the world works and
lives.
4 2022/1/18ACCENTURE: CORE VALUES
• Quality Client Service – Understand and meet client
expectations 100 percent of the time.
• One Global Firm – Act to enhance the collective values of
the global partnership, while sustaining local culture.
• Integrity – Act with openness and honesty. Always.
• Stewardship – Think future oriented; act and invest to build
a stronger firm for tomorrow.
• Best People – Are highly competent and make a
commitment to excellence, teamwork, and the success of
our clients.
• Respect for the Individual – Treat each person as we
would like to be treated.
5 2022/1/18ACCENTURE: IMPORTANT MILESTONES
1989 1997
• Andersen Consulting • Andersen Consulting creates a global
becomes a separate network of communications-focused solution
business unit from Arthur centers in an effort to set the standard for
Andersen speed and quality of performance
• $1.6 billion • $6.6. Billion
• 21,400 employees • 53,000 employees
1991 1998
• Horizon 2000 Initiative to • $8.3 billion
develop mission and • 65,000 employees
strategic plan
• $2.3 billion 2000
• 25,000 personnel • Joe Forehand becomes Managing Partner
and introduces the 100 Day Plan
1993 • Andersen Consulting wins arbitration against
• Andersen Consulting issues Arthur Andersen
its first annual report
• $2.9 billion 01.01.01
• 27,000 employees • Accenture, formerly known as Andersen
Consulting
6 2022/1/18ACCENTURE GLOBALLY
Employees: over 65,000
Countries: 48
Revenue ‘99: 8,9 Billion USD
Clients:
• The vast majority of Fortune 30 most
profitable global public companies
• Nearly 75% of Fortune 200 global
companies
• 100 of the most significant “Industry
Standard” Internet companies
7 2022/1/18ACCENTURE: DEVELOPMENT OF REVENUES
(U.S. Billions)
$8,3
$6,647
$5,302
$4,224
$3,452
$2,876
1993 1994 1995 1996 1997 1998
8 2022/1/18ACCENTURE: GLOBAL PERSONNEL GROWTH
65,134
53,426
44,801
38,027
32,711
1994 1995 1996 1997 1998
9 2022/1/18ACCENTURE IN ASG
ASG –
Austria, Switzerland,
Germany
Hamburg
Berlin
Düsseldorf
Frankfurt
EMEAI
München
Americas Wien
Zürich
Asia/
Pacific
• 2,750 Employees
• 7 Offices
• Revenues: 1,24 Mrd. DM
10 2022/1/18Global Competitive Overview
Strategy Organization Processes Information Business Process
Technology Management
(Outsourcing)
Andersen Consulting
IBM
Computer Sciences
EDS
McKinsey
Boston Consulting
Booz Allen
Digital Equipment
Cap Gemini Sogeti
UNISYS
11 2022/1/18ACCENTURE: MARKET UNITS
Financial Services
• Banking
• Health Services
• Insurance
Products
• Automotive, Industrial Equipment, Travel & Transportation
• Consumer & Pharmaceutical Products
• Retail
Communications & High Tech
• Communications
• Electronics & High Tech
• Media & Entertainment
Resources
• Chemicals
• Energy & Natural Resources
• Utilities
Government
12 2022/1/18ACCENTURE: SAMPLE CLIENT LIST
13 2022/1/18AGENDA
Introduction/Expectations
Example consultant company
Consulting: Nature, Trends,
Careers
Selected Methods (frameworks)
Research (some basics)
Graphics (from data to chart)
14 2022/1/18NATURE, TRENDS, CAREERS
Nature and purpose of consulting
Recent trends and current challenges
Staff and career paths in consulting
15 2022/1/18NATURE AND PURPOSE OF CONSULTING
Nature and Purpose of Consulting
• Definition of „Consulting“
• Brief look into history
• Different types of consulting
• Consulting market overview
• Consultant: Profession description
• Consulting strategies
• Short overview over the consulting process
• Reasons for clients to hire external consultants
• Guidelines for the client - consultant relationship
16 2022/1/18DEFINITION OF CONSULTING
Definition of Consulting
• „To give expert advice or provide expert counsel.“ (IKS)
• „Consulting provides value by diagnosing, strategizing, designing, constructing,
integrating, operating, or implementing solutions. Consulting utilizes relevant
knowledge, based on integrity and objectivity, in both expert and advisory roles.“
(Consulting Services Team)
• „Consulting is whatever a consultant does." (Cambridge Computer Services)
17 2022/1/18CONSULTING HISTORY (1/2)
Brief look into history
• 1532 Macchiavelli‘s „Il Principe“
• 1886 Foundation of the „analytical testlab“ by Arthur D. Little
• 1895 „A piece rate system“ by F. Taylor
• 1909 Foundation of Arthur D. Little, Inc.
• 1911 „The principles of scientific management“ by F. Taylor
• 1911 „Motion Study“ by F. Gilbreth
• 1912 „Consulting Firms“ by F. Gilbreth
• 1914 E. Booz sets up Business Research Services
• 1925 J.O. McKinsey starts his Consulting firm
• 1934 Urwick, Orr & Partners: Management ist lehr- und lernbar
• 1939 Peter Drucker „The end of economic man“
• 1947 Foundation of the Travistock Institute
18 2022/1/18CONSULTING HISTORY (2/2)
Brief look into history
• 1949 Robert Wiener „Cybernetics“
• 1950 Marvin Bower becomes CEO of Mc Kinsey and starts with
the expansion
• 1951 First Deming-Avard for Quality in Japan
• 1954 Foundation of the BDU
• 1954 Peter Drucker: „The practise of management“
• 1957 Argyris: „Personality and Organization“
• 1959 Herzberg, Mausner, Snyderman: „The motivation to work“
• 1960 Mc Gregor: „The human side of enterprise“, Maslow: „Motivation
and Personality“
• 1963 Foundation of Boston Consulting Group
• 1965 Foundation of the first two Business Universities in Great Britain
19 2022/1/18EVOLUTION OF CONSULTING FOCUS
Quality Management
Lean Management
Re-engineering
ERP projects
Web Technology
E-Commerce
CRM
M-Commerce
Strategy
1980 1985 1990 1995 2000 2005
20 2022/1/18TYPES OF CONSULTING
Different types of management consulting
Strategy
• Advice and counsel about corporate-level or business-unit strategies
Operations Management
• Figuring out how to improve the efficiency or productivity of how a
business works
Human Resources
• Compensation and benefits advice, attracting, motivating, and
retaining high quality employees
Information Technology
• Design, implement, test and roll-out new IT or install and operate
massive packaged software "solutions“.
21 2022/1/18STRATEGY VS. IT- CONSULTING
Worldwide Professional Services Market
$600
$85
$500 18% annual
growth
$400
Pure Strategy
$300
$45 IT-related Service
$475
$200
$250
$100
$5
$25
$0
$billions 1990 1999 2003
Source: Dataquest
22 2022/1/18GERMAN CONSULTING MARKET OVERVIEW
German Consulting market overview
1998: 62.500 Management-, Personnel- and IT-Consultants (BDU e.V.)
13.200 Consulting Companies
Total revenues: 18,8 bn. DM (BDU e.V.)
1999: 64.500 Management-, Personnel- and IT- Consultants (BDU e.V.)
14.300 Consulting Companies
Total revenues: 21,3 bn. DM (BDU e.V.)
23 2022/1/18TOP 20 CONSULTING COMPANIES WORLDWIDE
24 2022/1/18TOP 30 CONSULTING COMPANIES IN GERMANY
25 2022/1/18
Source: Lünendonk Consultancy + Research GbR, HamburgWHERE DO YOU WANT TO GO TODAY?
A scene from Lewis Carroll's "Alice's Adventures In Wonderland", when Alice asks the
Cheshire cat for directions, speaks volumes about planning where an organization wants
to be in the future.
"Would you tell me, please, which way I ought to go from here?" asks Alice.
"That depends a good deal on where you want to get to," said the Cat.
"I don't much care where." said Alice.
"Then, it doesn't matter which way you go." said the Cat.
26 2022/1/18REASONS TO HIRE EXTERNAL CONSULTANTS (1/2)
Reasons for clients to hire external consultants (1):
• Existing companies are not ready for the pace globalization and vanishing market
barriers they face -> need Consultants with broad market / industry knowledge
• Increasing M&A activities -> High complexity of transactions and tasks related to
Post Merger Integration
• Challenges of the high tech environment: employees are wholly occupied with daily
work and don’t have the time to think about innovations
• Changing working environment necessitate creative and up-to-date HR
Management
• Deregulation enabled new companies to enter the market. In order to position and
compete against former monopolists they need industry related consulting experience
(+other way round, ex-monopolists try to defend themselves against new market
entries using the knowledge of external companies)
27 2022/1/18REASONS TO HIRE EXTERNAL CONSULTANTS (2/2)
Reasons for clients to hire external consultants (2):
• Consultants have access to information on a truly global basis (Knowledge Exchange)
• Widespread acceptance of using consultants to gain outside expertise.
• Rapid technological change.
• Movement to enterprise wide solutions.
• Lack of in-house expertise in Processes, technologies, industry best practices, and
project management.
28 2022/1/18BENEFITS OF USING CONSULTANTS
• Subject matter expert: A consultant will save time and money by arriving to a
solution to the client‘s needs at a faster pace because of past extensive knowledge
and experience in dealing with other business owners.
• Objective point of view: A consultant will bring a refreshing outside point of view
to the client‘s company, which will pin-point existing problems or reach faster
solutions.
• Educate, inform: A good consultant will educate and inform the client as the task
is completed.
• Share information about industry and competition: This is essential to
reaching company goals.
• Assist with strategic planning which will help reach company goals faster and
easier.
• Offer innovative ideas
29 2022/1/18WORK AND LIFESTYLE CHARACTERISTICS
• Work at client site
• Work in team environment
• Work with a variety of clients across industries
• Assess client business and technical challenges
• Develop solutions to move client forward
• Extensive traveling
• Enriching learning experience
• Cyclical overtime
• Travel
• Variety of responsibilities
• Work with technology
30 2022/1/18TOP 10 WAYS TO KNOW YOU ARE DATING AN
CONSULTANT
10. Referred to the first month of your relationship as a "diagnostic period."
9. Talks to the waiter about process flow when dinner arrives late.
8. Referred to the yield of the tomato plants in your home garden as "deliverables"
7. Congratulates your parents for successful value creation.
6. Tries to call room-service from the bedroom.
5. Ends any argument by saying, "let's talk about this off-line."
4. Celebrates anniversary by conducting a performance review.
3. Can't be trusted with the car - too accustomed to beating up rentals.
2. Valentine's Day card has bullet points.
1. Refers to lovemaking as a "win-win."
31 2022/1/18NATURE, TRENDS, CAREERS
Nature and purpose of consulting
Recent trends and current challenges
Staff and career paths in consulting
32 2022/1/18RECENT TRENDS AND CURRENT CHALLENGES
• Changing customer expectations
• Increasing market power of the TOP consulting companies
• Effective usage of information technology
• Split Tax/Auditing - Consulting
• Strategic Alliances and Start-up Partnerships
• New suppliers enter the consulting market
• Expansion of the well known consulting companies
• IT consulting by traditional consulting companies
• Get & retain the right people
• How to face the current challenges
33 2022/1/18CHANGING CUSTOMER EXPECTATIONS –
SOME STATEMENTS
"CTOs and other e-business strategists do not want to hear me tell them I can help Web
-enable their business. That is not enough. They want to know how I can help them
transform their business."
-- Chuck Burns, global senior vice president, services,
KPMG
"CTOs have more choices than ever before when it comes to selecting a consultant.
We go into bids now where we may compete against one of the giant, Big Five firms ...
and even, in some cases, an advertising or marketing agency."
-- Scott Lochridge, principal, strategy solutions group,
DiaLogos
"The days of black magic are over, Consultants can no longer get away with just writing
a white paper for the client and saying, 'OK, now you do what I say.' ”
-- Jose Campos, president of Rapidinnovation
34 2022/1/18CHANGING CUSTOMER EXPECTATIONS
• Customer expect real added value
• Standard Implementations are decreasing while individual end-to-end solution
become much more important
• Unsuccessful ERP implementations in the 90s made the customer more
aware of risks and challenges --> Customer are much more sensitive to what
they get for their money
• Results in new payment schemes like:
• Fixed price (especially done by smaller / start-up companies)
• Risk and reward sharing
• Equity payment
• Payment in terms of %-age of actual value added
• On time delivery clauses in contract
35 2022/1/18INCREASING MARKET POWER OF THE TOP 20
CONSULTING COMPANIES
Facts
• 40 TOP Consulting Companies increased their market share in Germany from
42 to 45 %
• Average growth rate of the TOP Player: ~ 19,5 %/p.a.
• Smaller Consulting companies: ~ 4,0 %/p.a.
• Acquisitions of smaller and mid-sized consulting firms by the larger companies
in order to diversify their market offer
• Planned partly IPO of KPMG, Arthur D. Little, Andersen Consulting also
investigating
• Increasing market power and influence through ventures, e.g.
- AC Venture
- McKinsey’s “New Venture”
- Roland Berger & bmp
36 2022/1/18SPLIT TAX/AUDITING – REASONS AND CONSEQUENCES
Reasons
• U.S. Security and Exchange Commission:
Critical if Consulting Companies advice clients that are audited by the same company
• Higher margins and growth rates in consulting
• Inability for consulting part to raise money by going public as long as they are part of
auditing companies
Consequences
• Consulting companies can and will go public (e.g. KPMG)
• No more legal restrictions for consulting companies to advice other companies
• Differentiation process will accelerate (increasing marketing activities)
• Repositioning needs
37 2022/1/18SPLIT TAX/AUDITING - CONSULTING
Examples
• Andersen Consulting vs. Arthur Andersen:
Arbitration Decision in order to allow Andersen Consulting to split from Arthur Andersen
• KPMG:
• IPO of KPMG Consulting Business
• Cisco took 20% stake
• Another 20% for the accounting part
• Hewlett Packard interested to buy PriceWaterhouseCoopers’ Management and IT
Consulting part
• Cap Gemini to buy consulting piece of Ernst & Young
• A.T. Kearney and EDS
38 2022/1/18STRATEGIC ALLIANCES OF ACCENTURE
39 2022/1/18ALLIANCES AND PARTNERSHIPS: SOME EXAMPLES
• Cap Gemini: - Siebel Systems
- IBM
- Sun Microsystems
- Microsoft
• KPMG: - Compaq
- Cisco
- Microsoft
- JD Edwards
• CSC: - Peoplesoft
- Broadvision
- IBM
- Lucent
- Nokia
• EDS: - Sun Microsystems
- SAP
- Oracle
- Cisco
40 2022/1/18NEW COMPETITORS ENTER THE CONSULTANT MARKET
New Suppliers enter the consulting market
• Hardware manufacturers
- HP already increased their number of in-house consultants to 6.000
+ potential PriceWaterhouseCoopers part
• Internet service providers, e.g. Pixelpark buying the Swedish Consulting
firm “Cell Network / Mandator”
• Building „Inhouse-Consulting capabilities“
- Siemens (Siemens Business Services providing ERP, CRM
implementations)
- SAP System
- Deutsche Telekom buying majority stake in Debis Systemhaus
• Financial Institutions and Telecommunication companies
41 2022/1/18EXPANSION OF WELL KNOWN CONSULTING COMPANIES
• Expansion of the TOP consulting companies through M&A, alliances,
ventures and strategic partnerships.
• Chance to expand business and opening new markets
• After M&A, differentiation becomes critical, therefore high advertising
budgets
• IPO Strategies:
• Raise money for eCommerce strategy
• Venture Capital funds
• To attract people (competitive salaries and payment structures)
• Examples:
• Cap Gemini acquiring Ernst & Young
• Cap Gemini buying SD&M
• CSC Ploenzke to buy KPMG France
42 2022/1/18IT CONSULTING AT THE ESTABLISHED
CONSULTING COMPANIES
• As eCommerce is acknowledge to be one of the key business drivers, also
the traditional consulting companies try to get into it
• Strategy companies like Booz Allen Hamilton etc. to launch eCommerce
centers and venture capital firms
• By buying smaller companies and partnering they are able to provide a full
implementation service, e.g. Bain alliance with i2 and Oracle
• McKinsey has been accused having overslept the e-Commerce age; now
trying to work on that subject through increasing alliances & ventures in the
eBusiness
• After split from Andersen Consulting, Arthur Andersen will get more into IT
consulting
43 2022/1/18GET AND RETAIN THE RIGHT PEOPLE
• IPO in order to attract personnel
• Until backdrop of Dot.Coms and the stock market, tendency of leading
personnel to leave traditional companies to join Start-ups:
• Cambridge Technology lost over the last year many top managers (i.e.
Founder and CEO, CFO, General counsel, Head of its E-Business unit,
Managing director of the Cambridge Technology Capital venture fund)
mostly to small high-tech companies.
• Dean Hawkins, former CFO of Adidas to become CFO @ boo.com
• Joe Galli, Vice President Black & Decker to join Amazon.com as
member of the board
• Heiner Rutt, chairman @ Boston Consulting Group to become president
at Proxicom
• IBM Germany has about 3.000 open IT positions for 2001, Hewlett-Packard
to look for 500 IT specialists, PricewaterhouseCoopers 300 and Siemens
1.500, Andersen Consulting with 1.100 open positions in ASG.
44 2022/1/18"WINNING THE WAR FOR TALENT"
• Focus 30. August 1999
1. DaimlerChrysler
2. Lufthansa
Key factors of
3. McKinsey
success
4. BMW Image
Attractive 5. KPMG Interesting tasks
employees Personal development
6. Boston Consulting
Balanced life style
7. Deutsche Bank
International
8. Siemens atmosphere
9. SAP
10. Accenture
45 2022/1/18HOW TO FACE THE CURRENT CHALLENGES
• New strategies
• Branding Campaigns
• Personnel development concepts
• Efficient Knowledge Management
• Accurate Planning
• Change as Chance
• Synchronize the key success
factors:
- people
- process
- strategy
- technology
46 2022/1/18NATURE, TRENDS, CAREERS
Nature and purpose of consulting
Recent trends and current challenges
Staff and career paths in consulting
47 2022/1/18STAFF AND CAREER PATHS
Accenture McKinsey
Partner Director
Associate Partner Principle
Manager Associate Principle
Consultant Project Manager
Analyst Consultant
48 2022/1/18ROLES AND RESPONSIBILITIES: EXAMPLES
Analyst
Consultant
Proposals
Forecasting Lead work teams
Develop and execute client Facilitate Team-Meetings
training
Client interviews
Systems design
Programming Client presentations
Systems Documentation Lead subprojects
Participates in problem
solving
Recommends and
implements solutions
Defines user requirements
Researches new and
existing technology
Provides production
support
Tests software
Reviews work of peers
49 2022/1/18ROLES AND RESPONSIBILITIES (CTD.)
Partner
Interface with client senior management
Lead client meetings
Manager Develop new business
Lead client meetings Develop management team
Manage projects Shape and impact the Firm
Lead and develop project team Attain Ownership in the Firm
50 2022/1/18CONSULTING: ALWAYS STAY REALISTICALLY
A consultant, manager and a partner from a Consulting company are walking
through a park on their way to lunch when they find an antique oil lamp.
They rub it and a Genie comes out in a puff of smoke. The Genie says, "I
usually only grant three wishes, so I'll give each of you just one.
"Me first! Me first!" says the consultant. "I want to be in the Bahamas,
driving a speedboat, without a care in the world." Poof! she's gone.
In astonishment, "Me next! Me next!' says the manager, "I want to be in
Hawaii, relaxing on the beach with my personal masseuse, an endless supply
of pina coladas and the love of my life." Poof! He's gone.
"You're next," the Genie says to the partner. The partner says, "I want
those two back in the office after lunch."
51 2022/1/18PERSONS TO SUPPORT YOUR PERSONAL CAREER
Personal Mentor
Peer Group
Annual Reviews (upward/downward/sideward)
Partner Group
Practice Leaders
52 2022/1/18SOME ATTRIBUTES FOR GOOD CONSULTANTS
• Ambition to permanently learn
• Determination to succeed
• Strong communication skills
• Motivation
• Flexibility
• Agility
• Approachable
• Proactive
• Innovative
• Results-oriented
• Self Confident
• Entrepreneurial thinking
53 2022/1/18BENEFITS AND CHALLENGES OF CONSULTING
Benefits of Consulting
• Learning new industries
• Earning more income
• Flexible contract lengths
• Possible full time opportunities
• Less office politics
• Learning new technical skills
• Meeting new people
Challenges of Consulting
• Not being a "full-timer"
• Possible additional travel or commute time
54 2022/1/18PROJECT WORK PLAN: ONE EXAMPLE
FOR A THREE-MONTH PROJECT EXAMPLE
ALTE FOLIE VERWENDEN
55 2022/1/18YOU KNOW THAT YOU HAVE BEEN TOO LONG A
CONSULTANT WHEN …
1. you feel naked without a laptop hanging from your left shoulder;
2. you start thinking that life in the US Navy Submarine Corps would give you
more time at home;
3. you are upset when you come home on Friday night and the lights aren't on,
the bed isn't turned down, and there are no chocolates on your pillow;
4. "vacationing" is spending an entire weekend in your own home;
5. you have seen more movies at 35,000 feet than you have at your local movie
theater
6. before starting the car, you insist on telling everyone where the emergency
exits are;
7. before stopping the car, you insist that everyone stay seated until the fasten
seatbelts sign is off;
8. instant coffee tastes good;
9. you've been staying in the same hotel, you instinctively call it "home";
10. you say "Whoopee! Half day!" when you leave at 10:00PM;
56 2022/1/18AGENDA
Introduction/Expectations
Example consultant company
Consulting: Nature, Trends,
Careers
Selected Methods (frameworks)
Research (some basics)
Graphics (from data to chart)
57 2022/1/18AGENDA
Introduction/Expectations
Example consultant company
Consulting: Nature, Trends,
Careers
Selected Methods (frameworks)
Research (some basics)
Graphics (from data to chart)
58 2022/1/18AGENDA
Introduction/Expectations
Example consultant company
Consulting: Nature, Trends,
Careers
Selected Methods (frameworks)
Research (some basics)
Graphics (from data to chart)
59 2022/1/18You can also read
