An overview of the Indian consulting industry.
The consulting industry can trace it’s roots back to the late 19th century, when the world’s first, modern consultancy firms were founded. From the turn of the century, management consulting — which focused mainly on engineering and finance early on — increasingly gained terrain in the business world.
Nearly a century down the line, the consulting industry has developed into one of the most mature sectors in the professional services industry, generating between $100 billion to $300 billion in revenues, in the current times.
Over the years, the Indian consultancy industry has seen a substantial growth, not only in terms of size, but also in terms of the service offerings. In recent years, the demand of specialist consulting services is being immensely sought by consumers in India, presenting a large opportunity for a large number of consultants to help businesses with expert knowledge base and resources. Due to constantly increasing demand, the industry is estimated to grow at a compounded annual growth rate of 30 percent to become a Rs 27,000 crores industry in 2020.
The demand for specialized consulting services has never been higher, in Indian and globally, than now.
There are three types of consulting firms that offer services to a variety of customers :
- Management consulting — Work on improving the organisational structure, strategy and marketing of a firm.
- Operational & technology consulting — Fix and improve operational efficiency and technology of a firm
- Financial consulting — Utilize the capital effectively throughout the entire value chain, cash management and organic expansion of the firm.
Consultancy firms offer solutions and services to a broad spectrum of sectors such as aerospace, banking & financial services, IT, agriculture, petrochemical, healthcare, education, etc. They help organizations in following ways :
- Help hem scope out new opportunities to grow.
- Help them diagnose the issues and challenges faced by them.
- Help them improve their performance.
- Help provide innovative products and services.
Consulting industry — facts & figures
According to the recent report by the associated chambers of commerce and industry of India(ASSOCHAM), the consulting industry of India:
- Has 6000 consultancy firms in metropolitan areas.
- Has 200 R&D institutions and laboratories supporting these firms.
- Is expected to grow at a compounded annual growth rate of 30 percent.
- Is expected to be a 27 billion industry by late 2020.
Strengths of the consulting industry in India
The fast growth of this sector in India is largely attributed to improved investment activities because of low-cost structure, entry of main big players into the Indian market, relaxation of previous foreign direct investment(FDI) restrictions, and strong capabilities in areas like IT, management, civil engineering, telecommunication, petrochemicals, power and metallurgy. The steady growth will lead to expected rise in hiring activities.
The president of ASSOCHAM, Venugopal Dhoot, said that countries worldwide including USA, UK, China, Japan, Saudi Arabia, and Gulf nations acknowledge the competency of Indian consultancy firms, with their ever growing demand in the EU as well.
Ten strengths that set Indian consultancy firms apart from the others are:
- Low cost structure
- Professional competence and expansive human capital
- Focused approach
- Expertise in diverse areas and usage of knowledge management tools
- Following best practices in data warehousing
- Strong interpersonal skills
- High acceptability to customer demands and expectations
- High learning agility
- Flexible and out-the-box thinking
- Overall business understanding
Some significant challenges faced by the consulting industry in India are:
- Competition with well established global consultancy firms in the market
- Lack of clear demarcation of unique identity that differentiates them from other global players
- Keeping up with the changing pattern of demands of the clients
- Constant need to re-structure and re-organize with the increasing globalization of consultancy firms.
- Ability to leverage organizational knowledge effectively and efficiently
- Re-organizing and adapting to the changing landscape of industry demands posed by the global pandemic of covid-19
The consultancy industry in India is growing at fast pace and soaring new heights all across the world. This time, it is required to make an action plan to exploit the tremendous potential available for growth of consulting market.
Also, there is a need to strengthen the framework of Indian consulting industry by embracing innovation, nurturing talent, improving the quality of consulting services, and enhancing consultancy services.