1. Q. Discuss the Future Challenges for Indian Consultants/Consulting firms
from the Domestic and Global Perception.
Introduction
1. After Independence, the Indian Government had focused on investment in
core industrial sector and infrastructure. The investment in these sectors attracted
various construction and engineering companies to explore the business
opportunities and contribute their expertise in these sectors. Domain experts were
required who could provide their core skill and competence in designing and building
the core industry, dams, roads, buildings etc. Over the years, as the Indian industry
started maturing, the Indian consulting industry also started expanding, not only in
terms of size, but also in terms of the service offerings. Over the period, specialist
consulting advice was being sought by clients in India and this opened the
opportunity for a number of specialist organizations to draw on their specialist
knowledge base and resources to meet the demand for specialist consulting
services.
Demand & Growth
2. The business world is desperate for consulting help. With excess staff being
cut down, most organisations lack the technical, strategic and project management
skills to handle the benumbing rate of technological and market change. Despite
boom in the number of consulting firms, the size of individual firms is growing in
response to another industry trend: one-stop shopping. The consulting industry is
trying its best to accommodate the demand.
3. Big consulting firms are inhaling new employees, gulping up smaller firms and
merging with peers. Consultancy providers who can't compete on size still try to offer
one-stop shopping by outsourcing a chunk of a client's project to another firm while
maintaining responsibility for the overall project.
4. India has been globally recognized for its fast paced development. The
service sector has been growing at a fast pace and now contributes more than 50%
to the GDP. Thus in the scenario, fuelled by increased demand for consultancy
services by domestic and foreign firms, the sector in India is projected to grow at an
annual rate of 30 per cent to become Rs 27,000 crore industry. The consulting
industry in India currently stands at Rs 19,000 crore. Rising opportunities due to a
booming economy and growing demand for consultancy services are key factor for
growth. There would be over 2.2 lakh people working in this field over the next three
years in the 8500-9000 consultancy firms across the country. The Largest
concentration of consultancy organisations are in the four metropolitan cities: 1.
Delhi (25.7%) has the highest number of consultancy organisation among four

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metropolitan cities followed by, 2. Mumbai (25.5%), 3. Chennai (12.1%) and 4.
Calcutta (9.1%).
Coping to the Demand
5. In a down economy, highly successful companies will invest more in
customers, not less. Companies will compete for customer share, not market share.
Companies will realize customer satisfaction doesn't translate to loyalty and will
stitch their customer channels together.
6. Over the decades, the consulting industry has responded creatively to the
changing needs of clients, leading to the growth of a thriving industry. The insights of
history provide guidance as consultants seek the innovations to meet the future
needs of clients. Knowledge management tools, best practices databases and the
Internet make it possible for consultants to draw upon the knowledge of every
consultant in the organisation. Finally, companies will shift to a long-term focus. Only
one thing is for sure – the only thing that is constant in the consulting industry – like
any other industry – is change!
Status of Indian Consulting organisations
7. The major strengths of Indian consulting organisations include professional
competence, low cost structure, diverse capabilities, high adaptability and quick
learning capability of Indian consultants are the reasons why Indian consultants
score over their global peers. The US, UK, Japan, China, Saudi Arabia and Gulf
nations acknowledge India's consultancy firms. Indian consultancy capabilities are
strong in areas like civil engineering, telecom, power, metallurgy, chemical and
computer software.
8. The major weaknesses of Indian consulting organizations, which has hindered
the export growth of consulting sector in the country, are low quality assurance, low
local presence overseas, low equity base, lack of market intelligence, low level of
R&D
Perception & Challenges
9. It is generally opined within the consultancy service providers community, the
domestic market in India is a bit different from the international market. Keeping in
mind the differences of the domestic market with respect to the international market;
five major challenges consultants usually face in India, are :-
(a) Expectations. The first thing that the client and the consultant try
to define is “scope” of the assignment i.e. what would be the deliverables at
the end of the engagement. But “scope creep” i.e. uncontrolled changes or
continuous growth in a project's scope, a major phenomena in India, comes to
haunt the consultants and clients as the scope is inadequately defined either
due to the underlying complexity of the problem, improper pitch made by the

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consulting firms or because of the client simply focusing on the end results
without fully appreciating the problem at hand. Similarly the imagery of
business class travels and luxury hotels that one commonly associates with
consulting may not be the rule in “price-sensitive” India.
(b) Data. Getting accurate and adequate data is a major issue in
India. If we go by the inputs, market assessment, feasibility or sizing
assignments are very few and far between in developed economies whereas
India is replete with such projects. One should not be surprise by the fact that
Indian-based KPOs and analytics firms do an excellent job crunching
numbers for their foreign clients but struggle while coming up with such
insights for Indian clients and most of the blame lies with quality of data. The
need for 3-4 types of ID proofs in India is another proof that data is not
“proven” yet. So you may have a hard time drawing meaningful insights out of
them.
(c) Experience. Consultants are not scientists who invent new
offerings rather they rely on innovation or improvisation and a major source
for these insights is “collective wisdom” be it in the form of knowledge of the
various team members or experiences gained through previous engagements
in similar industries or by handling similar issues. With major consulting firms
having less than two decades of presence in India and the country witnessing
major changes in the intervening period, one may still be some distance away
from being “too-old” to “know it all” as far as Indian landscape is concerned.
Similarly for the clients, one of the major reasons for their apprehensions or
expectations is their limited experience of engaging with the consultants.
(d) Diversity. It is hard to imagine a country as vast and diverse as
India. A sector may be organised and consolidated down south but it may still
be unexplored in the east. So, with time you may get an idea about a
particular market in India but to come up with findings that apply to the entire
country, you may have to assess them separately and independently. This
would require covering the geography either as an individual or tapping into
local resources if available. Different languages, cultures, disaggregated
population, varying income levels etc. will give you a run for your money.
(e) Openness. As a consultant, one has to conduct numerous interviews
at the client end, be a part of focused group discussions, touch-base with
competitors and other stakeholders in order to draw useful insights. But blame
it on the pesky telemarketers or the consultants‟ image, it‟s not easy to
convince the external stakeholders to spare a few minutes for you unless of
course if you have a feminine voice. One of the major roadblocks is the
inability of the prospective interviewees to differentiate industry standards or
information from strategic and confidential information. But things may change
if you have close contact that connects you with the right person. It could also

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boil down to consultant‟s capability i.e. whether he is able to engage with the
interviewee or it could be because of the Indian culture of family owned
businesses where they mainly rely on close relatives for critical tasks.
10. In addition to the above major challenges, a few other challenges that effect
the scope of consultancy in India are - lack of proper project management; inability to
sell clients and their employees on recommended systems and procedures so they
are fully adopted; - over-promising results and finally the lack of communication with
the client.
Conclusion
11. In the preceding paragraphs, the different perspectives of consulting in India,
along with explanations for such perspectives, have been presented. In addition to
the above perspectives a number of other factors – called state factors and Industry
culture also play an important role affecting the perception. The state factors - states
having different labour laws, property laws and people of different cultural and
educational backgrounds determine - how industries do business, the kind of
regulations and taxes they are likely to face, and the quality of infrastructure to which
they have access, the nature and level of bureaucratic hurdles, infrastructural
challenges, archaic economy held back by traditional „obstacles to modernisation‟
such as caste etc...; The Industry culture – varying Indian corporate culture from
being old-fashioned to different degrees of modernisation, varying availability of
highly skilled labour force, varying infrastructure standards, varying degree and type
of technological development; all these included further contribute to the varying
manifestations of domestic and international perceptions.
Y Krishna Mohan
2012HZ58051