Management Consulting and Business Consulting are two terms that are often used interchangeably since the process for both has to do with partnering with external consultants to support your company’s growth. However, there is a difference in what both a business consultant and management consultant help your organization achieve.
Business consulting involves proactive efforts that seek to create efficient plans to help meet the organization’s goals. Based on the expertise and tools developed from experience and identified as proprietary best practices, business consultants help organizations identify challenging areas for improvement and provide guided recommendations to maximize business effectiveness. Business consulting is a more generic term often used when engaging consultants that may or may be intended to focus and specialized consulting within specific business areas, e.g., marketing, IT, cultural, financial. Business consulting has the same goal – to help organizations perform better. However, depending on the organization and the consultant specialization, the pathways might vary, as the business area might be very focused and functionally specific.
Management consulting is a type of consultation to organizations where the path to helping the organizations achieve better performance is exploring the “management” steps. These include strategic areas like cross-functional operations and regions essential to organizational functioning, primarily involving the highest corporate leaders and decision-makers. This consulting is usually deployed for complex organizational problems and affects the overall financial and operational health. The consultant’s goals ultimately include assessing the complex scenarios and, based on the expertise and the industry experience, providing the management team the research data needed to make informed decisions. Management consulting is not a quick process and involves multiple interactions between the consultants and management teams and an analytical period where the management consultants get to work. At a high level, the following steps occur in the management consultation process:
- Organizational Current State Assessment: The consultants spend time meeting with the management team, getting access to the organizational data to get a clear picture of the current state. As external parties, the process would begin with obtaining data access and additional data requests to paint an accurate picture of the organization and its operational mechanism and strategy.
- External Data and Research Review: Once the data gathering and assessment stage is complete; the management consultants spend time researching and gathering the external piece of the data. This stage is where the invaluable expertise and experience of the management consultants begins. The management consultant leverages tools and resources to gather comparative data to understand the external industry data useful for comparative assessment.
- Review and Analysis: Next, the management consultant spend time reviewing all the data and obtaining information, performing analysis and transformations, generating insights, finding the story. Business and data analytics tools and skillsets are employed to review all of the available data.
- Develop and Present Recommendations: The culmination of the management consultants’ work is to draw up insights and recommendations and communicate to the management team with actionable
advice on the next steps. Communication is critical to ensure a clear understanding and support from the corporate management team regarding the options provided and reasons for proposed solutions.
The consultants and management teams work together throughout the duration in constant communication. The steps can vary in time and depth based on the organization’s size and state of the data. However, the goal remains the same. They explore an opportunity or opportunities to make data-based recommendations clearly articulated to the management team and support actionable steps within the organization.
Overall, management consulting brings a lot of value to organizations. The objectivity and the portfolio of experience from an external consulting perspective explore the organizational issue in focus. Corporations of various sizes and industries can get the expertise and experiences externally to drive strategic decisions and turn opportunities into valuable strategic business decisions and actionable insights for the management team. The upfront cost can be a front that causes organizations to be hesitant to seek management consulting. However, the value far outweighs the price and cannot be recreated with internal resources. In the quest for management consultation, the best approach is to understand what your organization needs and get the right management consultants to guide your management team and ultimately improve overall performance.