Overview of Management Consultancy
Management consultancy is the process of offering professional, expert services and support to organizations in a way that helps them to establish performance standards or improve performance outcomes (Srinivasan, 2014). Iornem (2019) notes that every organization, large or small needs this professional advice to boost their performance and wield a better competitive advantage. Palpably, by proving businesses and organizations with solutions to various challenges, management consultants also receive enormous professional and experts rewards. A senior management consultant in this sector for instance stands the opportunity to earn as much as one million US dollars per annum in the US. Meanwhile international management consulting and auditing firms like McKinsey & Company, Deloitte, KPMG and PwC make or have made over fifteen billion US dollars in revenue (See Consulting.com, 2019).
To build and nurture a career in management consultancy encompasses the combination of training and experience over time, which builds the competence required. Allen (2021) also notes that to succeed as a management consultant, intellectual, communication, leadership, and technical competencies are required. This follows the pattern of structural planning, execution, assessment and reassessment of strategies that must be consistently reviewed to match set goals (Iornem, 2019). Following this pattern circumspectly, will enhance the accomplishment of the individual amongst other benefits (Seema and Sujatha, 2013). Allen (2021) thus adds that successful management consultants are strategic thinkers, who provide specialized and strategic counsel to businesses and firms in areas such as organization design, mergers, operations, finance, governance, risk management, human resource, ICT etc.
Similarly, as with other professional career jobs, a career in management consultancy begins from the entry position to the managerial cadre. The entry-level position is usually called the business analyst position which requires the analyst to have an undergraduate degree in business management, economics, or accounting. The experience requirement is low and sometimes not necessary. The second stage is the management consultant cadre itself which now requires a good number of years of experience, with additional professional qualifications and certifications.
The third stage is the senior management consultant cadre which requires one to possess a postgraduate degree such as an MBA, MSc, or MA. In addition to six or more consulting years of cognate experience (see Forbes, 2021). The fourth career stage is the peak called the principal consultant or managing partner. This level requires one to possess a postgraduate degree and ten or more years of cognate experience. It is important to note that this progression depends on the individual ability, zeal and enthusiasm towards developing the requisite skills and competencies (Pavulens, 2015; Seema and Sujatha, 2013).
Management Consultancy in Nigeria
Nigeria holds enormous prospects for investments in various sectors including education, renewable energy, hospitality, health and pharmaceuticals, etc some of which are presently lacking both local and foreign direct investment (Deloitte, 2018). Worst still the economy is heavily dependent on the crude-oil sector thus causing so many injuries to it due to crashes in world oil prices. Indigenous invests lack a solid comprehension of appropriate strategies, methods and models to drive their businesses (Bala, 2003; Ogar et al., 2018).
Many investors have great business ideas that can be translated into huge profitable ventures but they do not have the wherewithal in technical, entrepreneurial and managerial skills and expertise (Srinivasan, 2014). Meanwhile, a lot of others, have no or little strategies and competence to pilot their firms to a competitive growth -stage. On the part of businesses that have fully grown and even become internationalized, there is sometimes the need to either sublet part of their management to consultants from time to time, or employ the professional services of management consultants. This gap has created a large market opportunity for management consulting firms in Nigeria. In 2014, the worth of the African Management Consulting sub-sector was estimated to be over US$1.5 billion with a growth rate of 5-9 percent (Consultancy. UK, 2014). In these same statistics, West-Africa led by Nigeria dominated the market share with nearly 90 percent and a 26percent growth rate.
Nigeria’s management consulting sector is diverse, consisting of a wide range of consulting firms that comprise international strategy and technology firms like International Business Machines – IBM and Accenture. Others are mega accounting, auditing and tax expert firms such as PwC, Deloitte and KPMG alongside niche firms such as Novatia Consulting and Philips Consulting, etc (Nigerian Infopedia 2019). Despite that Nigeria has a number of global giants in the management consulting industry, the number of firms and qualified personnel in this sector is below the national demand for management consultants. The major actors in this sector tend to pay more attention to large business organizations, and MDAs (government, ministries, departments and agencies). Therefore, they tend to neglect the micro, small and medium firms and start-up businesses that can be served by younger and smaller consulting firms (Ogar et al. 2018). The customer base in this sector thus, comprises public, private and government sectors with entrepreneurs and business owners who are normally dissatisfied with their current performance. These clients are probably running or owning businesses that are worth between a thousand US dollars and over five billion US dollars, with business growth rates ranging from less than one percent to over ten percent.
Challenges in this Sector
The main bottlenecks being faced by management consultants and the firms in this sector in Nigeria is the uncertain business and economic environment that is being caused by worsening harsh economic realities facing Nigeria. Covid-19 pandemic has had a strong negative toll on many economies of the world but Nigeria’s case has been worsened by poor foreign exchange earnings from oil. The crash in global oil price drove Nigeria’s economy into a year-long recession in 2016 resulting in the winding up of many SMEs and heavy layoff of workers by large firms (IMF, 2018; Ugwuanyi and Obiekwe, 2017; Shafiu, 2018).
Despite the recovery in 2018 and 2019, the economic and business environment remained uncertain and then worsened by the sudden hit of the covid-19 pandemic. Currently, there is cut-throat competition amongst domestic and foreign-owned firms. Consulting firms under the SMEs category are unable to secure services and contracts with large firms and government agencies due mainly to capacity and competencies issues. The infrastructural deficit, electricity deficiency, unstable exchange rate of the naira in the foreign exchange market, poor business environment, high cost of doing business, etc are other challenges.
Prospects Despite the Challenges
Regardless of bottlenecks in pursuing a career or starting a firm in Nigeria’s management consulting industry challenges, some profitable opportunities still exist. Nigeria remained the largest economy in Africa with a GDP of 444.916 billion US dollars (IMF, 2019). The weakening naira is a prospect to grow export business as it becomes cheaper to buy from Nigeria. Given this, Nigeria is a good destination for foreign direct investment. Secondly, existing organizations are in dire need of consultants to assist them navigate through business crises, stiff-neck competition and uncertainties being faced. On small scale, many start-ups are springing up due to high unemployment rate (Bosma and Kelly, 2018) and promotion of entrepreneurship by philanthropists like Toney Elumelu Foundations, United Nations Development Programme, British Council, etc. The increasing number of investors implies that more clients will be searching for experts for professional business guidance/advice.
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Mr. James Terkura Ihum is a Lecturer II in the Department of Economics, Skyline University Nigeria. He has an MSc in Economics from the University of Leeds, UK.
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