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DISSector

Consulting in India

India is among the fastest-growing market for most global consulting firms. The Indian Consulting Industry

has been experiencing resurgence in the last few years. The industry has been making rapid strides in the

Indian market over the last decade and has witnessed a significant increase in the number of new entrants

in this field. The solitary objective of the participants in this market has been to gain maximum market

share within this highly consolidated and competitive environment, primarily by capitalizing on the

apposite factors driving it. Information Technology (IT) including e-commerce, telecommunications and so

on followed by Corporate Strategy, Outsourcing Services such as Payroll and Human Resource, Tax and

Audit and Operations Management have been some of the prominent business divisions in the consulting

market.

History of Consulting in India

It was in the 90s that McKinsey first brought the consulting strategy to India, setting up an office in Delhi.

The growth was initially quite slow and in a decade they were only able to bring in 100 odd consultants.

However, that escalated very quickly in the next decade and today, they have around 500 consultants

working for them in the country. Booz Allen Hamilton had also tried establishing his firm in India but gave

up in merely two years because the Indian market was quite difficult for the firm. However, Booz and Co.

came back to India recently and are now well established thanks to their new, well-planned strategies.

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Industry Overview

Consulting industry in India is expected to be a Rs 22,000 crores industry by 2020

(Source:Assocham)

It is expected to grow at a CAGR of 30%

There are approximately 10,000 consultancies in India.

The Indian-consulting advantage:

Low cost structure

Diverse capabilities

Academic competence

Industry currently employs workforce of over 3 lacs

Types of Consulting Firms

The classification can be done in two ways:

Classification 1:

Large Consulting Firms These Medium to Large sized management consultancies offer their services

across functions within a wide range of industries.

Boutique firms that have focused areas of consulting expertise in specific industries, functional areas,

technologies, or regions of the world

Classification 2:

Tier 1 They are mainly into Strategy consulting: Market

Entry, cost optimization, Growth strategy, Business

Consulting. This includes firms like McKinsey & Co, Bain &

Co., Booz & Co, BCG , AT Kearney etc.

Tier 2 Tier 2 firms are mainly Industry Focused.

Examples include KPMG, Deloitte, E&Y, PWC, Accenture

etc.

Tier 3 Their offerings include Advisory cum outsourcing services. The firms like Wipro, Infosys, TCS, Capegemini, Cognizant etc will fall into this category.

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Industry Practices

Management consulting firms offer their services across industries. Some of them are as follows.

Advanced Electronics Aerospace and Defence Automotive & Assembly BFSI

Chemicals Consumer Packaged Goods Electric Power & Natural

Gas

Healthcare Systems &

Services

High Tech Infrastructure Media & Entertainment Metals & Mining

Oil & Gas Pharmaceuticals & Medical

Products

Private Equity & Principal

Investors

Public Sector

Pulp & Paper/Forest Products Retail Semiconductors Telecommunications

Travel, Transport & Logistics ITeS

Functional Practices

Business Technology Corporate Finance Marketing & Sales Operations

Organization Risk Strategy Sustainability &

Resource Productivity

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Top Five Consulting Firms Profiles

Market Scenario

Fastest-growing markets

Difficult economy

Tougher clients

Buying cycles are getting longer

Competition is tougher

Project mandates are forcing consultants to raise the game

Percentage split of the total APAC revenue across difference business units

How Consulting is changing in India!

McKinsey and Co, Noshir Kaka, MD

In July 2011, Gautam Adani decided to seek the help of consulting firms to engineer a complete transformation in his $7.7-billion group.

Booz got their corporate centre, Accenture bagged the infrastructure business, AT Kearney snagged the power part, while KPMG managed to get hold of the ports business.

Newer companies are buying consulting services; buying cycles are getting longer; consulting relationships are getting more promiscuous; competition is getting tougher, and the missing marquee names from the Adani consulting roster also indicate that clients now don't get taken in by the 'messenger' but go by the message.

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On-the ground changes Streamlining distribution Better go-to-market strategies Operational excellence Efficient supply chain

management

Emerging Trends

The assertion that critical times lie ahead for the consulting industry may be sounding a bit repetitive now, but it remains true. Consulting firms in 2013 will no doubt be looking for the watering holes in a persistently tough market, but the smartest amongst them will recognise that the greatest potential doesnt lie in seeking out new markets, it lies in being ready to challenge the received wisdom about what consulting is and how its done. - Edward Haigh, Director of Source

BCG, Arindam Bhattacharya, MD

Twenty three years ago, CK Birla roped in McKinsey for a turnaround project for Hindustan Motors. That birthed the management consulting story in India.

Since then, true-blue strat firms (McKinsey, BCG, Bain, AT Kearney, Booz,) straddle the top end; consulting arms of technology firms like Accenture, IBM, occupy the mid-tier, the Big Four's consulting arms target the mid and bottom layer of the pyramid, a handful of boutiques (Universal Consulting, Avalon Consulting etc.) fill in the niches, and some credible newcomers like Oliver Wyman and Rolland Berger are fighting for their share.

Between 500 and 600 high-value consulting engagements (most expensive consulting that's largely the domain of the strat firms) are awarded each year. That's a $250-300 million market, including 30-40 projects that are worth about $2 million each.

AT Kearney, Saurine Doshi, MD

Between 2004-2010 (barring the 2008-09 blip), the management consulting market grew at 20%-plus. Indian subsidiaries of McKinsey, BCG, Bain and AT Kearney were among the top three firms in terms of growth in their universe globally.

Adds Saurine Doshi, MD, AT Kearney: "We have nearly tripled in size during the last four years." Under Ashish Singh's leadership, even late entrant Bain and Co has scaled up to 17 partners and 180 consultants in just seven years the fastest scale-up for any major consulting firm. Despite such growth, consulting penetration remains poor in India compared with the developed markets. "The consulting spend of just the Wall Street area is multiple times the spend of many regions, like India," says Manoj Singh, Global COO, Deloitte Touche Tohmatsu.

Over half of all assignments in the last 4-5 years have come from newer clients like family-owned mid-caps, private equity and private equity-owned companies, infrastructure projects, public sector (excluding banks), and state governments.

1990s

2000s2010s

Changing Clients Expectations

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Affecting factors

The way forward!

German Market grew by just 7% in 2011 and was the second biggest in the region behind UK

Lot of dependence on performance of Financial Services IndustryLow Levels of growth in Europe

New Services

New Roles

New Delivery Models : move away from the old pyramid consulting model to something more flexible

Testing Strategies

Example: Deloittes acquisition of Monitor

Clients tend to get cynical about market consolidation since it removes capacity and choice from the market

Interests of consulting firms and clients should be balanced by the restructuring industry

Further Consolidation

The Gulf Cooperation Council (GCC) - strongest performing consulting market .

Saudi Arabia, represents 32 % of the GCC market, and Qatar, 13 % , will continue to fuel a booming market but India is expected to recover

Role of Brazil and China in Global Market

Hotspots

BCG is seen by clients to be increasingly capable of diversifying by role and delivery model.

the big question: whether one of either PwC or Deloitte can start challenging it for top spot

Best Placed for Growth

Nature of projects

move towards high-end strategy consulting

Public sector consulting projects

Ex: market demand assessment of the Rs. 78,000 crore Gujarat International Finance Tec-city (GIFT)

Industry structure

move towards greater market segmentation

International management and strategy consulting firms

ideal for high level strategy projects

Niche Management consulting firms

focus on particular sectors

Operational Consulting Firms

focus on operational efficiencies, emerging market segment

IT Consulting Firms

high end technology consulting

innovation and R&D

Paid management consulting services

move towards greater acceptance

Cultural perception

knowledge and advice linked with a persons age

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One of the fastest-growing segments of consulting has been information technology (IT). This segment

includes consultants focused on e-commerce; telecommunications; intranet and Internet strategies and

functionality; hardware systems design and implementation; software design, acquisition and

implementation; and web site design and operation.

Corporations today, have new IT needs thanks to the rapidly expanding fields of social networking, mobile

computing, online employee collaboration and cloud computing and data storage.

IT consulting - Overview:

IT consulting firms have evolved into full service companies. In many cases, they are now integral departments within larger technology-based firms. The IBM Global Services unit of computer giant IBM best illustrates this trend

A large portion of income is derived from outsourcing. Once these firms have determined a clients needs during a consulting or analysis phase, they may deliver turnkey services that include actual day-to-day operation of the clients computer department and/or other departments.

Extremely rapid growth of large companies that are based in India but compete globally, such as

Wipro, Infosys and Tata Consultancy Services (TCS). These companies quickly grew multi-billion

dollar revenue bases as major contenders in the global IT sector. Additional hot competition comes

from software companies, such as Oracle, that have quickly built up large consulting units of their

own.

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For the near-term, the biggest opportunities for IT consulting growth will lie in three exciting areas:

Big Data

Cloud-based IT infrastructure

Mobile apps and data services The role of a consultant in IT firms is comparable to that of a business analyst. The job description of a consultant in such firms is listed below:

1. Requirements gathering: Working with client to

decide scope of the project, map the business

requirements into things the developers can

understand, i.e making screen mock-ups, process flow

diagrams, mapping business fields into database fields

etc.

2. Industry Analysis: Studying latest trends in the industry, adding some gyaan from companys

Name Headquarters IT

Consultants

Genpact Gurgaon, India 49,000

HCL Technologies Noida, India 90,000

Infosys Bangalore, India 155,000

Larsen & Toubro Infotech Mumbai, India 16,000

Tech Mahindra Mumbai, India 84,000

MphasiS Bangalore, India 34,000

Oracle Financial Services

Software

Mumbai, India 10,000

Tata Consultancy Services Mumbai, India 276,000

Wipro Technologies Bangalore, India 145,000

WNS Global Services Mumbai, India 25,000

experience with clients. The result will be a marketing Leading IT Consulting Companies in India

ppt that can be used to start a conversation with prospective clients.

3. Pre-sales support: Taking responsibility for preparing documents in response to Request For Proposals

(RFPs) from clients. This will involve speaking to various people in the different horizontals of the company

(i.e if it is a Testing project, call up the Testing Head) to collect all the relevant materials demonstrating the

companys credentials for the project, and tailor them to the requirements of the client.