20Apr

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Business Consulting: What Is It All About?

Businesses always thrive for effective operations to increase their revenue generation whilst keeping expenses low. But did you ever notice that some organizations stay ahead of revenue demands, but most firms struggle to stay up to date in this competitive market? This happens due to a lack of proper Business Consulting. Selecting the right business consultant allows a firm to grow and increase its potential limit.

In this article you will find the following:

Who is a Business Consulting Professional?

Business Consulting is a profession which helps organizations streamline operations in specific business areas. These areas can be marketing management, supply chain management, sales, information technology, finance, human resource, operations, engineering, digital transformation, security, and many such areas. Professionals engaged in this trade help businesses overcome challenges, improve revenue, thus ensuring growth and improving overall business performance and efficiency. These experts analyze businesses and create solutions while facilitating enterprises meet their goals. They act as mentors for investments, R&D, upskilling, organizational change. Consultants come up with recruitment strategies, growth, stability and enhanced resource utilization plans and roadmaps.

What is done in Business Consulting?

You may wonder how a Consultant goes about doing their job in Business Consulting. There are several stages to it. Business Consulting thus is a very systematic and practical process:

Task 1: Discovery Phase

The first step in Business Consulting is the discovery phase; the business consultant learns from the owner and employees about the client’s business. The discovery phase includes:

Touring the factory or office
Meeting the company management and the relevant employees
Evaluating the finances
Reading up on company material from the website, brochure and Google reviews

During this process, the business consultant also discovers the details of the organization’s mission and how the company functions.

Task 2: Evaluation Phase

Business Consulting requires identifying where the management needs to change the process, during the evaluation phase. The business consultant in this phase recognizes the organizational strengths and weaknesses of current and anticipated problems. It is the usual norm to pinpoint opportunities to grow the business, increase profits and enhance effectiveness, via an effective SWOT analysis and GAP analysis.

Task 3: Solution Phase

In addition to detecting various problems and opportunities, business consulting provides solutions to problems and the plans to leverage the strengths. For example, suppose an organization has a strong sales department but a feeble marketing department. So, this is a chance for the company to improve upon marketing resources and leverage the sales team. It’s a tightrope walk at times, but that is where the Consultants specialize. This is the essence of Business Consulting. During this phase, business consulting personnel and the employees need to maintain open and transparent communication.

Types of Business Consulting:

Strategy Management

Business consulting professionals with upper-management expertise can bring industry knowledge to your business, help you measure, lay down the correct big-picture roadmap, develop new opportunities, and enhance revenue. Business Consulting Services can help your business by:

Expanding new markets or increasing awareness in your current market
Restructuring business model to create a cost-efficient strategy
Increasing your organization’s capabilities
Suggest acquiring a new business venture
Merging with another business or altering the business’s structure
Standing in as middle management during a transition period

Operations

Those in field specializing in operations can help businesses improve the quality of their daily processes. First, inventory of the current business model takes place and the gaps are noticed and the better model going forward come into shape. Then, consultants help to implement the better model and remove the gaps with the help of quality control and operations optimization for best results.

Financial Planning

A financial consultant can show you the actual financial health of your business and improve it as needed. They help in investment decisions and aid you in finding the best way to handle assets and debts. Business Consulting in the financial domain offers financial planning, including implications of taxes, daily expenses, and creating customised retirement plans.

Human Resources

Consultants specializing in human resources can mentor the daily HR tasks such as recruiting and retaining new employees, performance management, managing payroll, administrative tasks etc. Their inputs on important functions are invaluable and help tremendously with hiring decisions and human resource requirement planning. Their expertise leads to creation of sound policies which were hitherto absent and thus can cause a complete turnaround in employee morale and productivity.

Marketing

The Marketing segment of Business Consulting has the ability to help enterprises create brand awareness and augment the existing brand voice. Redefining customer relationship management strategies, overseeing a few marketing events they can lay the path forward for improved execution for the understudies, who are the company insiders in this case, is a literal godsend for the client company. So, whether your company needs a branding facelift or a product launch strategy, a marketing consultancy is an asset in developing your business’ reach.

Social Media

Social media consultancy can help clients with strategies and best practices to grow audience, boost engagement, increase web traffic, reach targeted audiences and increase conversions from leads. The internet is where all the growth is happening today at the highest rate, so its the one place that needs the best guidance for maximum results.

IT consultant

IT consultancy can help companies adapt to new technology. Awareness of IT consultancy professionals about the emerging trends in the technology domain is superior to the in-house talent. Thus their input brings in a wave of digital transformation and profitability improvement.

What Businesses need Business Consulting Services?

Almost all businesses can benefit from the Business Consulting Services. A recent study found that the global consulting market is projected to be around $132 billion. The consulting market size in the USA alone has reached a value of 64.4 billion dollars. All this would not be possible if the efficiency of Business Consultancy was not contributing to the proposed cause.

Start-ups can hire consultants to execute strategic planning and get a solid start
‌Any business that has diversified operations can benefit from a new point of view, right at the beginning
Company consultants can do research for organizations that start new branding initiatives
Consultants with their expertise and skills can help small businesses focused on growth
With systematic business consulting, businesses can revive their financial position
Businesses scaling up operations can get help in designing, setting up, and rolling out the scaled-up works

The advantages of using Business Consulting

Using Business Consultancy Services is advantageous in many ways. Let’s explore the advantages:

Expert Knowledge

The core competencies of business consultants are their knowledge, expertise, experience, skillsets and subject matter authority. As these consultants work with various businesses, they have a much broader and deeper knowledge of business trends, industry challenges, and new technologies and processes, when compared to internal employees. According to a recent study, business consultancy is essential to promoting innovation within industries. In addition, they can design improvements of defective processes with a realistic goal, thus reducing process costs, risks and time lost from damage.

Cost Savings

There is a considerable amount of savings if a company hires Business Consulting Services to complete a project or task. Compared to an in-house full-time employment, such a support is required to be paid only for the services rendered and not a dollar more. There is no fixed overhead. Rather the expense is performance based throughout. Such consultancy brings with it the expertise and experience to point out the wasteful expenditure a company is incurring on a particular process/project. Cutting down those extra dollars means huge savings sometimes, to the tune of millions of dollars even. For more information on this, do read our detailed article.

Independence

Business consultants share an independent and fair perspective of the client’s business. Their decisions are always unbiased and objective. The focus is on the goal agreed with their client, without any judgemental distractions. As a result, business consulting services can provide insights and implement solution-centric thinking.

Time Savings

Consultant’s experience matters a lot. For example, a process consultant can immediately identify variations, saving time. A business need not loose time in established processes, when things can be done faster, with the same efficiency level contained in the same output.

Objectivity

Business consultants are not emotionally attached to the business. They can quickly identify and address challenges, whether implementing new technology or completing a merger/acquisition. The consultant’s detachment is critical to the process, especially where problems are more challenging to discuss.

Customization

Business Consulting does not offer a standard solution to all. It wins the battle by providing a customized solution for the problem that a business faces. The uniqueness in circumstances of the problem faced by a business needs a nuanced response. This is where it stands victorious thus giving maximum ROI.

Creating a Road Map

Strategic planning provided by Business Consulting Services is of paramount importance for any new venture. The guidance emanating from such planning is full of wisdom, acquired through years of practical experience. Most start-ups do not have a concrete roadmap and a start-up consultant can put in place a strategic plan and create a roadmap for a new business. It is like giving a stick to a blind man to help him walk, it is that critical.

Market Research

Market research is like oxygen for any consultant worth their salt. It is of paramount importance so that the plan that is chalked out is relevant, and based on facts and figures. Business consultants analyse market trends and market dynamics and will advise you accordingly. The value that is brought to the table due to market research by Business Consulting Service providers is invaluable to say the least.

We have a whole article telling you more about the advantages of hiring the services of a business consultant.

Which tools are used in Business Consulting?

Business experts have several tools at hand to analyse company performance. Here are some frameworks that consultants use when rendering competent business consulting services.

Benchmarking

Benchmarking is comparing company metrics to the metrics of your industry competitors. The usual benchmarking metrics include revenue and production costs. Other important ones are employee turnover, and process cycle time.

Balanced Scorecard

It measures data beyond financial metrics to help companies keep enduring strategic goals and find trouble before it appears in the financial statements. Conventional components can include revenues, earnings, market share, quality, employee morale, and customer satisfaction metrics.

Porter’s Five Forces

Business consultants use Porter’s five forces to gauge barriers to entry and find opportunities to execute industry analysis. It is used as an input to a strategic plan. Besides, they also use SWOT analysis to find the strengths and weakness.

The GE-McKinsey Nine-Box Matrix

This matrix developed by McKinsey & Company in the 1970s help businesses measures the relative merits of various opportunities. Business opportunities are categorized as high, medium, or low within the two axes of the matrix and business consultants take advantage of the guidance emanating from this data.

The BCG Growth-Share Matrix

This matrix, developed by Boston Consulting Group, is a tool that consultants generally use to measure the relative strength of a product line up within the client’s portfolio.

Software

Besides the above tools, business constants take the help of various CRM software, project management tools, time tracking tools, cloud automation software to assess various aspects of your business. For example, time tracking tools record work hours and let you categorize time for different projects. Likewise, cloud automation software aids business consultants to manage sales, projects, time-tracking, and much more in one place.

ROI

As per a note by Donald D Bergh and Patrick Gibbons on 28the March 2011 titled The Stock Market Reaction to the Hiring of Management Consultants: A Signalling Theory Approach that we came across on 19^th April 2022 at https://doi.org/10.1111/j.1467-6486.2010.00957.x, which has been published on behalf of the Journal of Management Studies. It clearly says that the Companies that hired the services of Business Consulting Services experienced a higher increase in their profitability, compared to the ones who didn’t hire Consultants.

stack of coins representing Return on Investment. business consulting 4

A consultant enhances the value of a business enormously by assisting it in making the correct strategies. As part of systematic business consulting services, consultants work for multiple firms dealing with different problems; their suggestions hold solid grounds for any organization, making them high performers and creative thinkers. As per a report, over 55,037 business consultants are employed in the USA alone. Now this number would not be so high if the returns from their services weren’t genuine. Do take a few minutes to read up on our detailed article on the benefits arising out of employing Business Consultants.

Which Business Consulting Services are offered by Innovation Junction?

Services that we provide are available to both new and established businesses. At Innovation Junction, we understand that efficiency is the driver of business growth. At this point, there is an increase in workload, and there is a need for a consultant in every business worth their salt. This need also arises if the specialty of product or services provided by the company does not match the new requirement. The best and the cheapest way then is to get the job done through outsourcing it to a consultant.

For example: A company provides services in accountancy and the increasing number of employees in the organization is now not easy to manage in MS-Excel, which is the current method in use. In this example, the company has two options:

To delay the processing of its employees’ dues, who work their best for the company
Outsource software or a program, and the wiser option is to go for software

Here we come into the picture. We provide the best and the expert solutions like HRMS software, biometrics, or any other IT solution, best suited for a company’s specific needs. We have proprietary software that is designed out of our experience. But if the already available option does not fit the need, we separately analyze and design a tailor-made software to meet the requirement.

How we do it?

To understand it best, let us understand the below-mentioned 3 main goals that we have in mind while taking up any project:

To create a vision and plan based on the demands of the customer
Build a team that can embrace the idea and put it into action
Deliver outcomes based on the organizational structure that has been developed

Now let’s dive deeper into the services which we provide to our customers which are best-in-class when compared with our competitors:

1. IT Consultancy

One of the key reasons why the world’s best businesses continue to reach new heights is the effective use of technology. This is where IT consultants come in. We analyze a company’s challenges, give efficient solutions, and thereby push things forward. We, as consultants, are skilled specialists in a certain subject and are frequently employed by firms to bring our vast experience to your door.

Generally, the expenses incurred in IT solutions are Operational Expenditure (Op-Ex). OP-Ex is the expenditure that occurs regularly and is accounted for by including it into the profit and loss account at the end of the accounting period. They don’t have any significant percentage such as Cap-Ex (the long-term investments). In the IT domain the ratio of op-ex to cap-ex is normally as high as 9:1. We solve the problem of op-ex (nonstop and regular expenditure) by negotiating with vendors, rationalizing technology, and automating processes.

This reduces operational costs, and the money saved can be invested in the business as cap-ex (one-time, non-recurring expense). This is accomplished by developing a Business Strategy based on a competitive IT strategy, i.e., the business is driven by the optimized IT framework and strategy developed by us to produce optimum output while requiring the least amount of Op-Ex. This IT framework is created by proper analysis by our team to identify IT issues and requests. This stretches the Dollar invested to the maximum.

man using a tablet device representing information technology. business consulting 5

List of our specialised activities:

Refer to the following points to learn more about the types of work that we, as IT consultants, often provide to businesses:

We recommend better software or hardware solutions for organizations based on their study on the ground. This can include any number of solutions that assist to optimize the flow of information throughout the organization. These are systems that better organize data online to save on human labor.
We are mostly brought in to analyze and then address serious technological problems in a corporation.
It is our specialty to do critical risk assessments, manage documentation, and present progress reports that are utilized for corporate analysis.
We are also called in to install cutting-edge technology, which is also cost-effective, for your company. Then we integrate and even manage these IT systems across all departments.
We frequently focus on solutions that lessen your workers’ burden and instead increase their productivity towards the essential activities of your organization.
Cyber security is another area in which we specialize. We perform periodic security checks and contribute to the network and data security. We even teach your employees to combat cyber threats such as phishing.
One of our strong suites is to benefit your business by performing large data analyses. This aids in determining the most efficient method of collecting and analyzing data from a company’s clients. We then make this information easily available to your firm, with the help of insightful reports, particularly when executing campaigns.

2. Merger and Acquisitions

Mergers and acquisitions are business tactics that have gained prominence among industries and corporate houses in this period of fierce competition and increased commercial rivalry. Mergers and acquisitions, or M&A, are the purchasing, selling, or combining of corporate entities. It allows firms to expand, thrive, and ensure that the newly formed organization is more influential with enhanced efficiency and productivity. The goal of a merger is to increase the value of the entity after the merger.

Merger and acquisition advisory firms like us support and give crucial assistance and experience to organizations who seek to purchase, sell, or completely restructure their businesses. We operate similar to personal financial advisors and are game-changers if you allow us to successfully execute a deal on behalf of your company, we give assurance of that.

two people shaking hands at a merger and acquisition meeting. business consulting 6

The Process:

The process of selling or reorganizing a business is time-consuming and needs the assistance of specialists. This is where an M&A Advisory Firm comes in, and you can even take us as your “Business Coach” who can guide your company towards a successful corporate transaction. We play an important role in this era of mergers and acquisitions (or takeovers) since we can devise a workable strategy and give our customers tailor-made solutions that ease the mergers and acquisitions procedure.

We oversee Merger and Acquisitions and complete TSAs (Transition, Services, and Agreements). Some of the work that we do under M&A are:

Managing Purchase and Sale Agreements
Creating a risk-mitigation, divestment, and acquisition plan
Putting Together a Business Continuity Plan
Using Digital Assets to Increase Future Value

3. Contract Negotiation

Contract negotiation is the process of arriving at an agreement. This is related to a set of legally binding terms and conditions (we’ll focus on negotiations between two businesses here). When two organizations sit down to bargain, they both target the best results for themselves. At the same they want to minimize financial and legal risk.

This is a separate concept from M&A in terms of compliance as M&A only looks at the merger of the firms. When negotiating contracts with vendors, you may choose to pay on a monthly rather than annual basis. It could also be or vice versa. Payments, like many other challenges, do not have a ‘right’ answer, but rather have alternatives one of which may make the most sense for your business. In business, we negotiate contracts to ensure that our agreements position your organization for long-term success.

two people holding a contract negotiation. business consulting 7

The Challenges:

Negotiating the contract improperly can lead to many challenges. Which are as follows:

Long-term challenge of contract negotiation
Affect the profitability
Result in stress between two parties
Cost reduction
Risk management
Time consuming and hectic

We can eradicate all the above-mentioned challenges. We provide the best solution to you by taking into consideration the requirement of both parties. Eventually this makes the contract profitable for our client. At the same time we make sure that the above-mentioned challenges do not disturb the course of action in future dealings.

If you are looking for an IT solution to improve contract negotiation is to use tools created expressly for it. We have such tools, especially for ‘contract negotiation with counterparties’, as well as ‘contract cooperation with internal stakeholders’. Technology has lately caught up to the difficulty of contract negotiation, and we are at the forefront of it.

Conclusion

Business consulting is the key to take your business several notches up. Consultants with their distinctive experiences help businesses address and overcome challenges in reaching company goals. Nevertheless, finding a competent business consulting service provider is tricky. So, it is always crucial to hire a business consultant with relevant skills and where innovation meets purpose. Innovationjn.com, with its expertise and knowledge, will give you a unique perspective and view challenges from a practical standpoint. Not only this, but we will also provide you with the knowledge needed to run your organization smoothly. Our consultants understand that every business has its challenges and we serve clients to eradicate them. Thus, the value we bring to the business is incomparable. We have been in the consulting business long enough to know what to do and how to do it.

Call us today if you are looking forward to meeting an excellent unbeatable team of professionals. We can deliver under any given global situation.

by Umesh Kumar Khiri

April 20, 2022

558 Views00 Likes

21Mar

Business Consulting

What are the benefits of a business consultant?

What are the benefits of a Business Consultant?

Business consultants are people with expertise in different areas of a business. They are personnel who will give you insights to run your business efficiently. A business consultant will help you plan new strategies and provide advice. You can hire a business consultant with the type of specialization you need. One can seek professional advice in finance, management, marketing, compliance, human resources, or any other part of the business. By hiring a business consultant, you will have smooth sailing in the field in which you lack expertise.

Notwithstanding the size of your business, hiring a business consultant will bring expertise and multiple benefits. They solve the problem in quick time, add a fresh perspective, and boost growth in the domain to which they were asked to pay attention. It will give you the freedom to focus on other aspects of the business.

Facts of the matter:

If you look at the graph of new business start-ups during recent times, you will observe a steep rise in the curve. But, can you estimate how many of them could survive the competition and understand the market trends? On average, 627,000 new businesses are emerging each year. Unfortunately, more than 20% do not see the dawn of the second year.

In 5 years, more than 50% of the companies bid farewell to the industry. Similar research was performed on companies with a business consultant. It was observed that more than 90% of the newly started companies stay put through the first five years without a hitch. These studies bust the myth that you should avoid a business consultant if you are a small business organization. There are plenty of benefits that an organization reaps when they bring on board a Business Consultant to address any trouble they face. You can find a point-wise mention of those benefits below:

They are individuals or a team of experts specializing in various business fields such as finance, management, operations, sales, marketing, branding, and much more. Having worked with multiple organizations in their career, their wisdom has higher value compared to an in-house talent.
Business Consultants have tremendous prowess in rejuvenating a defunct business. They know exactly what to do and how to do it. Their revival plan hardly goes wrong.
They gauge the business’s overall health and pinpoint areas to be worked upon. Once the diagnosis is made, it is easy to work on the challenging areas and overcome them. They assist in finding the right fit for making progress in business expansion. Because of their global perspective, they can see things that someone in the middle of things cannot see due to their myopic viewpoint.
A Sales Consultant can provide detailed plans and suggestions to target and reach your desired customer base, leading to improved sales and market expansion.
An HR consultant can identify the skill gaps and provide adequate training and development programs to upskill human resources.
A Finance Consultant can analyze and update financial strategies such as asset building, budgets, and revenues to ensure a healthy capital status.
A Research Consultant can research, strategize, formulate and implement a customized roadmap to foster business innovation.
An Operations Consultant can find and connect to other profitable businesses to optimally fulfill and energize the demand and supply loop.
Marketing Consultants can forge a company’s brand image. Through extensive research and market survey, business consultants enrich your market image and accessibility to give your business the required level of exposure.
Business Consultants are experts at aligning the vision and mission of the business to its operations and processes.
It is essential to strategize business operations as per the current market challenges and competitions. Their deliberative research and solid expertise can assist a business in facing and overcoming such challenges.
Business consultants come with an extensive network of business connections. These connections form a vital part of their daily workflow, keeping them updated on the current business scenario. So the chances of getting the latest solution from them are much higher than the in-house talent, which can be in a bubble at times and under clouded judgment.
Start-ups and newly established businesses usually lack the required expertise, market knowledge, and resources to run a business efficiently. Business consultants help them to optimize their resources and shorten burdensome operations.
Well-established businesses face challenges from multiple competitors. Moreover, due to their extensive expanse, they also face several efficiency, costing, and resource utilization problems. Therefore, to achieve the performance standard, even by the topmost organizations across the globe hire business consultants. Such big companies cannot do without the advantage of hiring business consultants who are adept at setting these ills right.
Medium-scale businesses hire consultants to achieve a more extraordinary growth trajectory. It helps them attain higher financial goals, and develop more competent human resources. Digital transformation has helped many such companies to break the ceiling and turn unicorns on the back of assistance from business consultants.

The above points do answer the question ‘What are the benefits of a business consultant?’ It is a no-brainer when seeking a specialized, economical, and quick-turnaround solution that any business can face. If you want a firm helping you out instead of a single individual, you can also opt for that. Here, you will get many ideas in a single place about various fields. The market is constantly evolving with the addition of new technology and trends every day. A business owner can’t get a hold of all new information and learn about the industry’s dynamic shifts and manage their business every day. Here, a business consultant whose job is to study the market comes in handy to navigate the pitfalls of the business intelligently. This, in turn, helps in shaping the business to become successful.

by Umesh Kumar Khiri

March 21, 2022

484 Views00 Likes

17Mar

Business Consulting

What are the advantages of taking assistance from Business Consultants?

Business consultants provide a business with the correct advice and guidance to sustain and perform in a highly competitive market. There are several advantages of taking assistance from Business Consultants.

Taking the help of Business Consultants provides several advantages such as lower cost for issue resolution, no long-term commitment, time-bound resolution of a problem, accurate solution implementation, and introduction of unbiased ideas for solving crises. Their expertise and experience guide the client business out of trouble and onto a higher trajectory of progress.

This article lists the various advantages of taking assistance from Business Consultants.

1. Temporary Expense:

Business consultants are engaged in project-basis. This means they are not full-time employees and do not carry a salary burden. Expenses committed towards them are limited to their duration of engagement with your business.

2. 100% Commitment:

The burden of proving their effectiveness lies upon a consultant every time. They always wish to get hired again for another project. So, they provide their 100% dedication and effort for each project. As per statista.com, the total revenue of Consulting Business in the USA in 2019 was $71.2 billion. This just goes to show how well this industry is serving the different business domains. As per IBISWorld, th2 2019 figure is poised to grow to $263.5 billion in 2022. Simple question to ask is ‘Would this much be paid to consultants if they weren’t worth the money?’

3. Less Expensive:

There are plenty of good business consultants in the market. Another report from Statista.com says that there were about 734,000 consultants in the USA in 2020. So one can get a very lucrative deal when hiring a consultant. Even though they are in high demand, their sheer number is always advantageous for the buyer. It is usually a buyer’s market in this domain.

4. Fresh Perspective:

The perspective they bring in is based upon years of experience. A business cannot possibly have an in-house super-experienced and quality professional for each department to provide a high-quality perspective all the time. Consultants fill this gap; they come in, bring in the goods, give their best, solve the problem and go. It’s an actual winning situation for a business to only access external quality talent and perspective when needed.

5. Quicker Resolution:

The laser focus brought by Business Consultants results in a quick resolution most of the time. This solves the troubling process faster than expected and gives more significant results than in-house fire-fighting.

6. Crucial Insights:

The insights and analytical input provided by consultants can change the entire course of a business and help it grow multifold within a few years. Such progress on economies of scale is undoubtedly a significant advantage for hiring consultants.

7. Process Optimisation:

The experience and expertise that is brought result in tremendous optimization of the concerned department of the business. This results in sure-fire qualitative enrichment of that section of the organization. Productivity improvement is but a natural byproduct of hiring a consultant.

8. Practical Experience:

With the everchanging business scenario, business ramp-up is possible by either going through intensive upskilling of in-house talent or bringing in a qualified consultant who will do the job in a shorter period for less money, based on the back of real-time practical experience. However, Upskilled in-house personnel will take a long time in matching the talent that comes readily when you hire a consultant. So it’s a definite advantage to hiring a proper consultant for the desired transformation of the organization.

In conclusion, one can say that Consultants provide insightful analysis, expert advice, and a dependable roadmap to foster a company’s multi-faceted growth. The industry’s best practices are brought into a company’s work culture by business consultants, and thus they transform the company altogether. Who would want to forego such advantages? Therefore, all businesses can avail themselves of business consultancy services in their organizational lifecycle. In the face of countless challenges in the dynamic business world, a business consultant can add value that will help you get over the line faster than others. They help close deals that are larger than your previous deals and help your company move up the scale altogether.

by Umesh Kumar Khiri

March 17, 2022

481 Views00 Likes

16Mar

How does a consultant add value to an organisation

Business Consulting

How does a consultant add value to an organization?

In today’s business arena, ‘adding value’ to an organization in terms of numbers is vital. This is where Consultants come into the picture. Besides the ‘numbers’ growth, business consultants also add a subjective value to the business they are hired in.

A consultant adds value by providing the organization the solution for the pain area that they are hired to fix. They do this with the help of specialized knowledge and experience they possess regarding a specific aspect of the business such as marketing, technology, recruitment, finance, operations, etc. Their objective viewpoint and expert solution contribute to an out-of-the-box resolution of the business problem.

Choosing a consultant that satisfies all the needs and delivers a highly beneficial outcome can be a treacherous task. There are a lot of consultants out there with their various levels of expertise in a specific domain. Now, there are some distinct advantages to engaging business consultants. These advantages bring incremental changes in the firm’s desired outcomes and overall profit.

How does a consultant go about adding value to the business with their services?

These are some ways that a consultant benefits an organization:

● Solves the problem:

They are hired to solve a critical problem that warranted external help to be sought. This is the most important way for a consultant to get counted. The client places their expectation and to an extent their trust in the business consultant regarding a problem that seems unsolvable by themselves. If the problem is solved, value is added to the equation, it’s that simple. There are multiple layers to this matter, and that is a subject of a separate discussion.

● Brings in knowledge and experience:

Business consultants bring specialized skills and expertise that are higher than the skills of existing staff members. Such executives provide a time-bound, often measurable outcome. A Forbes Insight Study showed that 92% of surveyed executives reported successful and favorable project completion. Of these, 62% said they met the project objectives, and 30% said they exceeded them.

● Educates the company:

A genuine consultant helps organizations by educating employees with a broader and deeper view about the aspects they’re lacking in. Because the more educated one is about the products or services, the better they’ll utilize the knowledge for the bigger picture. He adds knowledge value to the client company, not just to his report card and bank balance. Such faithful helpers are often re-engaged as consultants as they are not solely interested in lining their pockets but are interested in the overall growth of the client business.

● Adds a fresh perspective:

They bring a much-needed fresh perspective to an existing structure which eventually helps the organization reach out and grab new opportunities and make them work. An unbiased opinion can often clear the haze of an office environment clouded by confusion, emotion, and politics. They provide insights that are not marred by the insecurities of inside players.

● Manages risk better:

By clarifying the issues with existing processes, consultants help the clients assess and manage risks better.

● Consistent high-level service:

Consultants help differentiate the informational and decisional roles, which is critical for the organization to grow successfully. As a result, consultants can deliver on their commitments by providing a higher level of service and being more consistent due to their laser focus and expertise on the subject matter.

● No long-term committment:

A consultant can be bid adieu once their target has been met. Hence there is no obligation of long-term employment and payouts and commitments compared with a permanent employee.

● Lower resolution cost:

The overall cost for solving a problem is significantly lower. This is because the consultancy fee (expense) is done and over with once the problem is solved. This is a tremendous advantage and value-add when viewed from a business owner’s perspective.

Measuring the Value Added:

The value that consultants add can also be measured objectively from a client’s point of view. Over a period of time, the following metrics have been designated as a more or less competent way of measuring their performance:

1. Resolution Numbers (ROI):

This is the direct outcome of engaging the consultant. When hired, a consultant is told the problem they are being hired to solve. Upon completion of the project, the outcome is analyzed, and if found to be resolved, or if found to be giving the desired outcome in numbers, it is the most direct way of assessing the value they bring to the project. It is traditionally called the ‘Return on Investment’ (ROI). Consultants often add subjective and qualitative value to a client’s business that one cannot measure statistically. Good management can identify that value and decide to rehire the consultant or employ their services for a longer duration during the subsequent project.

The above metric has an effect on two other factors regarding hiring a consultant to add value. These two are as below:

2. Utilization Rate:

It is the time of a consultant that the client uses compared to the consultant’s total time availability. Let’s say the consultant is available for 8 hours per day, 5 days a week. This means 176 hours in a month on average. If the client has used their services for about 125 hours per month, i.e., the consultant could bill the client for 125 hours, their utilization rate is (125/176)*100 = 71%. The higher the rate, the higher the efficiency of the consultant. This metric is a good indicator of the consultant’s competence. The owner would hire the consultant more if they bring more value to the table for their client.

3. Repeat Business Rate:

This metric is a good representation of a consultant’s performance and value addition. If a consultant has been hired again for another project after completing the previous one, it is a good indicator of their previous performance and value addition capability. It is calculated by comparing the repeat client numbers by the total client base. If a firm has 10 clients and 6 rehire consultants, then the rate stands at 60%. The higher the number, the better the proof of value addition by the consultants.

The above three metrics indicate to what degree some value-addition was done to the business when it brought in a consultant for a particular project/problem. We recommend that you read about the Business Consulting Services that we offer here.

by Umesh Kumar Khiri

March 16, 2022

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