Consulting Journal: Trends - The end of process consulting?

Trends: The end of process consulting?

by David Blakey

Is process consulting dead? Or has it just migrated to the only real remaining management consultants?

[Monday 1 September 2003]

For a recommended book on process consulting ...

I shall not define process consulting, as it is not the role of Consulting Journal to describe fundamental consulting techniques.

I shall examine the role of process consulting and whether it is still used extensively. To do this, I shall describe each of three different kinds of consulting practice: the strategy consultants, the general consultants of the accounting firms, and the consultants within the new owners of those firms.

For the strategy consultants - and the names Bain & Company and McKinsey spring to mind - the skill of process consulting has continued to be exercised. These consulting firms have always relied upon gaining commitment from their clients for transition to a new strategy. They continue to use process consulting and their clients continue to benefit from it.

In the accounting firms - Andersen, Deloitte, Ernst & Young, KPMG and PwC - process consulting was only used by those consultants engaged in strategic consulting. For most of the general consultants, it was not usually needed. Only those who facilitated client meetings really used it. Process consulting involves the client in doing much of the work. The consultant guides this process. This means that process consulting is usually done by a single consultant, rather than a team of consultants. It also means that, while the client is doing some work, the consultant may not be working, and therefore not earning fees. These two aspects of process consulting made it unattractive to the accounting firms. Their model was of a team of accountants, preferably junior because their salaries were lower, under a single senior accountant, all of whom worked - or appeared to work - full time for the client. The process consulting model, which requires mainly senior consultants with intermittent involvement with a client, was less attractive to them.

Some of these consulting practices were devolved into separate entities, as at Accenture, Deloitte Consulting and BearingPoint. The consulting practice of E&Y was acquired by Cap Gemini and of PwC by IBM. By this time, all of them had moved further down from strategic consulting into contracting, especially in implementing enterprise-wide IT applications. As well as competing with the large strategy consultants and the smaller niche consultants, they were competing with systems developers and implementors and integrators. Some of them moved into other services, including outsourcing. Process consulting became less important to them, and less used.

Some of them are in trouble. BearingPoint was recently reported to be unprofitable and IBM has shed many of its PwC consultants. They now compete in areas where they can be undercut, such as Web and systems development, where they have little experience, such as systems integration and outsourcing, or where their techniques are inadequate, such as strategic planning.

Meanwhile, the big strategic management consultants continue on, using process consulting. Small niche consulting firms and individual consultants also continue on, also applying process consulting techniques. Most of the smaller firms and people will specialize, in a sector or a technique or a business process.

So the answer to the question is: no, process consulting is not dead. It is simply marginalized into the real, ongoing management consultants who continue to do well what they have always done well.

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