Operations Consulting
Operations is another leafy offshoot of management consulting and bears strong similarities to strategy. The key difference is the intensive focus operations brings to a client’s performance at specific points on the value chain. Operations consultants use the same problem solving methodology as their counterparts in strategy but direct it towards different, more functional and explicit areas of the client’s business. A crucial bridge between strategy and implementation, operations consulting identifies how a specific target can be achieved and provides clients with a detailed roadmap for change.
Operations executives live on the frontline, managing industry change, disruption, challenges and opportunities. They work closely with operations consultants to solve different organizational and efficiency challenges. Clients expect a blueprint for more effective internal operating models, management systems, and functional business processes, that is ripe for implementation.
What does an operations consultant do?
Operations consultants provide specific solutions to how a particular challenge can be met. They employ metrics, advanced research, and problem solving acumen to optimize their clients’ business processes. Designing cost-saving solutions in one location, maximizing profitability in another, reducing bottlenecks, revamping the procurement process, and streamlining logistics, are just some of the broad range of missions operations consultants excel at.
Each cog in the corporate or organizational machine must be operationally sound if the client’s targets are to be met. Operational consultants therefore find themselves busily engaged at every stage of the value chain, engineering business model transformations across functional dimensions. Unlike strategy consultants, they are more likely to get their hands dirty in the day-to-day running of a functional area, such as sales, but stop short of full-scale implementation.
Operations consulting services
Operational efficiency must be embedded in every functional area of a client’s business. It must also exist within each separate decision-making structure within a functional area, and holistically throughout the entire corporate body itself. As such, operations consulting is an incredible broad service that, like strategy, can be arranged into eight distinct disciplines.
These operations consulting services are: Organizational Operations, Sales & Marketing, Supply Chain, Sourcing & Procurement, Finance, Business Process Management, Research & Development and Outsourcing.
Organisational Operations - Improving performance across the entire organizational structure by focusing on processes that transcend different functional areas — such as workforce or crisis management. Example: Re-defining employee roles and responsibilities.
Sales & Marketing - Boost sales operations through a multi-faceted approach that might include revamping client engagement models, optimizing accounts and customer relationship management, or upgrading the market research or product design departments. Example: Developing specialized helpdesks to manage customer support.
Supply Chain Management (SCM) - Streamlining supply-side activities across the full value chain. Key focuses on logistics, planning, risk mitigation, developing mechanisms to respond to operations disruptions and sustainability initiatives. Example: Minimizing risk of supply chain interruption affecting business operations.
Sourcing & Procurement - Developing, assessing and managing client relationships with manufacturers and suppliers. Can involve securing better terms and conditions, sourcing new supplier of raw materials, evaluating indirect procurement operations. Example: Helping clients transition to greener procurement portfolio.
Finance (CFO services) - Compliance-based services that tackle mergers and acquisitions, budgeting and asset management. Finance operations often seek to streamline the information flow to stakeholders or improve the performance of individual financial processes. Example: Optimizing financial reporting process.
Business Process Management (BPM) - Optimizing business processes by minimizing inefficiencies and designing new blueprints for optimal performance. Employs systematic approach and continuous improvement techniques based on lean principles. Example: Applying lean principles to new functional area.
Research & Development (R&D) - Enhancing innovation, from new product development processes to targeted R&D spending. Consultants will engage with both the hard structural processes of R&D development, and the soft human capital side of innovation. Example: Extending life cycle of market products.
Outsourcing - Designing outsourcing blueprints, often for back-office processes such as accounting, IT and recruitment. Consultants will also advise on establishing shared services and harmonizing processes with new outside partners. Example: Supporting client’s outsourcing of legal department.
Operations consulting market
Operations is by far the largest branch of management consulting, accounting for almost one third of the entire consulting economy. This translates to a market worth some $70 billion and which has enjoyed strong and consistent growth in recent years. Advising clients how to do something, rather than what to do, means operations consultants can be kept busy no matter what the plan is.
The consequence is that, like management consulting, the operations sector is notably resilient to broader economic trends. Clients demanding cost-cutting and downsizing advisory services fuelled operations consulting during the crisis years. Demand for functional transformations and performance improvement exists regardless of the favorability of market conditions. Here the operations consulting market differs from strategy, which depends largely on clients’ having an appetite for growth.
Operations consulting firms
Firms with a pure focus on operational consulting are less common than the vast number of generalists who provide services in at least one of the eight operations disciplines. A strong relationship exists between strategy and operations and the Big Three of McKinsey, Bain and BCG also enjoy repute as elite operations consulting firms. The Big Four names in accounting — KPMG, EY, Deloitte and PwC — are well-regarded for their strength in developing new operational blueprints to manage financial processes.
