Consulting Services
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Industry Overview
The US consulting services industry includes about 140,000 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $150 billion. Major companies include Accenture, Bain, Booz Allen, Deloitte, and McKinsey. The industry is fragmented: the top 50 companies account for less than 30 percent of total industry revenue.
The industry includes companies that provide management, scientific, and technical consulting services, including specialized services such as environmental, human resources, logistics, and marketing consulting. IT consulting, a related specialty, is covered in the Information Technology industry profile.
Competitive Landscape
Demand is driven by the needs of businesses, nonprofit institutions, and government agencies for outside advice. The profitability of individual companies depends on the efficiency of their operations and their ability to maintain a steady flow of business. Large firms have advantages in being able to offer broad ranges of services and to take on more complex projects. Small firms can compete effectively by specializing.
Products, Operations & Technology
Major services include strategic management consulting (about 35 percent of revenue), business strategy and planning consulting (25 percent), and marketing management consulting (15 percent).
Management consultants advise senior and middle managers about the operations or strategic direction of various functions in the client organization, such as finance, HR, logistics, marketing, and operations. Scientific and technical consultants provide advice related to economic, environmental, safety, security, and other issues. Most consulting jobs are project-oriented assignments, also called "engagements." Clients usually send a request for proposal (RFP) to several potential consultants; consulting firms respond with a proposal that specifies the approach the firm would take to address the task, the resources it would use, a timetable, the "deliverables" it would provide, and an estimated cost. Most consulting assignments involve a period of study or research, followed by formulation of possible solutions. The major deliverable is usually a report or action plan.
Technology plays an increasingly important role in consulting services. Firms often pitch and develop complex software solutions, including enterprise resource planning (ERP); customer relationship management (CRM); or sales force automation (SFA). Many general management consulting firms have a division or sister company that specializes in IT consulting; often, the two work together to present an "end-to-end" solution for clients.
