What is CIMA?
CIMA (Chartered Institute of Management Accountants) is one of the most prominent providers of professional training in management accountancy and allied subjects. The body recognizes accountants working in the Management Accounting industry and provides them with most updated training to its members.
CIMA (For decades, firms like McKinsey, Bain Consulting, Goldman Sachs or Boston Consulting have been looked upon with much awe by global businesses. Ever wondered why?
These are the companies which identify and solve some of the world’s most complex business problems. Whether it is related to mergers & acquisitions, launch of new products, expanding geographical footprint, increasing market share or saving a company from internal/external issues, Management consulting firms provide unique solutions to a wide variety of problems. That too customized and not standardized.
But why do companies need a Strategy Consulting firm or a management consulting firm in the first place? Don’t these big MNCs have the muscle to employ an in-house team for addressing its business issues? Of course they can. But they don’t for a couple of genuine reasons.
Here are 6 reasons why businesses approach management consulting firms:
1. Unbiased opinion
Solution of bigger problems need objective view of things. If companies form an in house consulting team, there may be internal biases which prevent viewing the problem in proper light, leave alone finding the best solution. The in house team may not focus on the internal weaknesses or shy away from highlighting it in front of the management. In other cases, the in house team may have vested interests and act out of the same. In such cases it is best to hire a management consultant who can address the issue with no strings attached. They can view the problem objectively, analyse it and highlight the existing lacunae and give an unbiased opinion. Since they deal with a number of other companies, they are also well aware of the standard problems and what other companies do to get out of it.
2. Focus more on core jobs and leave the thinking to someone else
Most of the organisations keep their focus on core operations and outsource the critical problem solving to management consultants. There are many departments in an organisation which contribute to the production or delivery of their core services. The day to day management requires complete dedication of the employees. Companies which work on limited manpower need not pull their employees from their core areas of work and put them on consulting work. It is always smarter to hire contract based management consultants who can work on demand without putting extra pressure on existing resources or hiring someone for solving a temporary problem.
3. Project financing requires due diligence by third parties
In sectors which undertakes long term projects, such as power, real estate, construction etc. there is a requirement of sanction of finance. Financial institutions prefer the projects to be vetted by third party consultants after a thorough due diligence. In such cases it becomes mandatory for the companies to approach a consultant who will assess viability of the project and give recommendations for better gains and operational efficiency.
4. Functional expertise
Management consultants are people who have years of deep experience solving business problems so they have complete knowledge how the sectors work, what business cycle the company is a part of, how a problem emerges, what is the best way to tackle the problem and how it can be avoided in the future. Some of the management consultants specialize in particular sectors such as manufacturing, FMCG, real estate or retail. They have a team of people who are skilled in areas ranging from process design, operations as well as finance functions. These experts may be a tad expensive to hire but their degree of proficiency justifies the same.
5. Go-to person for sudden problems
At times companies face issues which are not chronic. They arise suddenly due to certain micro or macro changes. In these cases, companies would not be able to hire employees as in house consultants on such a short notice. In situations like these, they get a consulting firm on board to look into the problem objectively and recommend a solution in a quick span of time. With expertise in solving business cases day in and day out, consultants are habituated to faster learning curve and possess a certain degree of agility in solving the problems.
6. No frills attached role
Management consultants are actually expertise and brain on demand. If organisations were to hire employees for consultation roles, they might not have enough work for them to keep them occupied round the year. This might lead to employee dissatisfaction. Also it becomes a cost burden for the company because they have to provide employee benefits to the in house staff. Organisations thus like a no frill approach these days. They only like to bear cost for the term of the work done. For such cultures, approaching a management consultant is the smartest move.
Management consultants are like knights in shining armour for business in distress. They wear various hats and perform roles ranging from financial advisory, operational consulting to strategic planning for increasing overall efficiency of an organisation. It is quite evident that management consultants will be in huge demand and continue to be sought after by businesses big and small.
Watch out this space for more on careers in Management Consulting.