Business Consulting Accelerator | Sam Ovens: Is Business Consultancy Really Worth It?
From small businesses and startups to large corporations and organizations, business consultants are being hired by companies for different reasons. These consultants are hired to manage the benefits of the company’s employees like health care or 401ks; they are also employed to serve as a Human Resource agent who hires other employees.
One of the most significant revenue for consulting agencies is providing a customized training program and asset to improve the company’s employee productivity. Paying for people to be speakers and rally up the employees is an industry of its own. The reason for this is that a lot of businesses know their respective market and niches, they know what their company needs and needs to be done, but do not always know how to sell the vision of their employees.
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Sometimes a new set of eyes from an independent third party that can pinpoint the disconnect between the company CEO’s vision and what is really happening on the ground. A lot of businesses and organization also hire business consultants to manage their finances, promotions and advertising as well as their employee’s safety. Most consulting agencies are comprised of partnerships between publicly owned or privately held enterprises.
Companies like McKinsey & Company or Booz & Company, two of the oldest business consultancies in the United States, has been in the business since 1926 and 1914 respectively. Some consultancy businesses were either merged with other consulting agencies or were incorporated to create today’s most successful business consultancy firms. One exception is the company Arthur Anderson LLP. They surrendered their CPA licenses because of their involvement during 2001’s Enron Scandal.
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Back to the big question, are these business consultancies really worth it?
Business consultants can perform investigative inspections of the company’s business operations and reveal weakness and potential issues based on the client’s request. For example, if a large corporation or business are experiencing a sudden downturn in their employee productivity that may cause a considerable loss of their revenue, business consultants can spend weeks observing the workflow of the company’s employees and determine where the problem came from.
In other cases, business consultants can be called upon and provide the company training for their employees when a new cycle of the business strays from their established business operation. Usually, these consultants simply look for any leaks in the company’s workflow. Find spots where efficiency can be improved. And when they find these spots, which of them are leaking the most and find solutions to the issues with the highest priority.
The consultants can also do data analysis of the company’s workflow and find ways to improve using interrogation software. Combining fools like Hadoop for massive data or Search Engine Optimization reporting and excel in marketing can help cut the employee’s workload. These methods can even let maintain productivity and business downsizing.
Business consultancy agencies can generally calculate their fees like how most lawyers calculate theirs: a predetermined hourly consulting rate. But these fees may not include extra charges like travel expenses from one client to another, where more than one facility exists.
The charges also do not include the cost of internet or telephone communications, additional equipment or hotel accommodations. Food or meals can be covered in the consultant’s fees and to know if the business consultants are worth the cost, the scope of the work of the consultant should be outlined clearly in their proposal.
Review the consultant’s proposals
Business consultants usually provide a proposal that outlines the work they will perform, their responsibilities as well as their customer or client’s responsibilities to provide information or interface in case their task is to train the company’s clients. The consultant proposal should also decide the extent of their client’s rights to keep the information proprietary as well as inaccessible to their competitors.
It can be defined in the “Performance Guarantee” of their proposals. Make sure there you check their license and the terms of the consultant’s business insurance liabilities. If there are gaps, the owner of the company who hires the business consultants or the consultancy agencies should resolve these problems with the agency, the agent or their own insurance company.
Cost-effectiveness and business consultants
When it comes to the business management consultants, they can become a company’s greatest asset. It depends on the company’s willingness to take any advice offered by the consultants. Sometimes, corporations or companies hire a management consultant who presents them with the analysis or their findings and ignores their recommendations.
It is not a cost-effective use of the business consultant’s time, effort as well as advice. The primary purpose of hiring these consultants is to alter or improve the training of the employees, financial matters, safety and production and make these areas highly profitable.