Management Consulting: IBM Corporation

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Table of Contents

Introduction
Nature of management consulting
Acquisition of a consulting firm
How consulting adds value
Desirable attributes of a consulting firm
Types of management consulting projects
Conclusion
References

Introduction

Management consulting is defined as an advisory service contracted and provided by expert people who assist the client organization to identify and analyze management problems, devise suitable solutions and help in the implementation of the said solutions.

It is a method of assisting organizations to improve managerial practices as well as employee and overall organization performance and growth (Hanisch, 2012). Business entities and companies seek consulting services due to several reasons including uncertainty, time factors and reputation.

Uncertainty is covered by expert analyzers who are charged with the responsibility of sieving information to provide coherence and meaning. Some firms may not have technical and managerial capacity to resolve the problem and may require time to develop such hence the need for management consultants. Finally the firm may acquire recognition and status as a result of interacting with the consultancy firm (Perchthold & Sutton, 2010).

Nature of management consulting

The role of management consulting is to help client organizations solve arising issues while ensuring profit maximization. This guarantees an improvement in performance and ensures value creation. Core processes of consulting include business planning, risk management, new product development and operations management.

Acquisition of a consulting firm

Firms, like IBM as described in the case study, need to remain relevant and active within their respective industries. There is the need for redesign of business process in a manner that boosts efficiency and productivity. The aim is to eliminate unproductive components or layers of the firm, reduce costs and improve quality.

Acquisition of a consulting firm by IBM will guarantee flexibility in business processes and operations. Furthermore, it allows the firm to shed off the core business processes and operations, which do not register desirable returns, and replace them with activities that are profitable. The firm is likely to benefit from competitive advantage arising from the differentiation strategy adopted.

How consulting adds value

IBMs decision to venture into consulting poses several advantages in terms of value addition. It allows the firm to develop new products to meet emerging market needs hence tapping into revenues and sales that were initially unexploited. Furthermore, the firm benefits from economies of scale by engaging in more activities within the same market.

Consulting equally assists the firm in majoring on expertise that offer competitive advantage and therefore forming the basis of profitability due to an increase in the scope of operation. Consulting widens the market reach of the firm and allows it to spread risk. Relevant stakeholders and shareholders view this venture as expansion hence increasing confidence in the firm (Czerniawaska & Toppin, 2010).

Desirable attributes of a consulting firm

A consulting firm being considered for acquisition must meet certain criteria. It should have a defined business product which is different from what competitors have to offer. This is as a result of analysis of competitor strengths and weaknesses. It should also have sufficient expertise within the firm to ensure that there is enough technical and managerial capacity to address the needs of the market. It should bear the goodwill of customers, clients and capital investors to guarantee support.

Types of management consulting projects

Management consulting projects encompass several aspects revolving around business processes. They range from project management, finance, sales, business planning and human resource development. Others span into product development, in terms of research and development, as well as IT outsourcing, business process outsourcing and risk management.

Conclusion

In conclusion, there is a need for firms to move from resource allocation to resource stretching where they undertake more activities with minimal resources. Consulting allows the firm to move from serving existing markets to creating new markets as they offer new products and deliver services that were initially out of their scope of operation. It offers a diversification strategy and spreads the firms’ risk.

References

Czerniawaska, F. & Toppin, G. (2010). Business Consulting: A Guide to How it Works and How to Make it Work. Profile Books.

Hansisch, D. (2012). Management Consulting in Family Businesses: An Organizational Boundary Perspective. Brandsberg, Germany: Books on Demand Publishers.

Perchthold,G. & Sutton, J. (2010). Extract Value from Consultants: How to Hire, Control and Fire Them. Texas, USA: Greenleaf Book Group.

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