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The Management Consultancy Profession

A neglected choice for business graduates in Pakistan

By Wasif Ijlal
Jan 15 - 21, 2001

Management Consultancy worldwide is now considered to be a rewarding profession and more and more business graduates from elite universities end up in the big four firms with five figure starting salaries. The trend of acquiring the Certified Management Consultant (CMC) qualification, which is the only standard qualification for management consultants worldwide, is on the increase.

The market for management consultancy globally is growing in rapid proportions. It's a truly global profession where all large consulting firms operate internationally and have offices or sister offices in dozens of countries. In 1998, the world market for management consultancy was estimated at $50 billion. It has become a competitive market where supply has matched and even outgrown demand. Clients are becoming more and more selective and service quality and innovation have become important criteria in judging consultants.

It has also become a market with a relatively high and rapidly evolving centralization and polarization. At least 25 international firms employ more than 1000 people, while only four law firms in the whole world employ more than 1000 lawyers.

In consulting, the share of routine and repetitive work is smaller than law, accounting and auditing. Demand has not only grown, but has also changed in nature. Globalization, information and communication technologies, regional economic grouping, the fall of the communist regime, privatization and many other developments has not only increased demand for consulting but have also changed the content and quality of demand.

Management consultancy in Pakistan: While more and more business graduates are entering the consultancy profession worldwide, in Pakistan, management consultancy as a profession is very much of an underdog. Most of the business graduates would prefer to settle in multinationals or foreign banks, where the work might turn out to be a lot less dynamic but growth is steady and a clear career path is present.

In order to better understand the lack of enthusiasm of MBA's in adopting the profession, it is vital that we understand the structure of the management consultancy business in Pakistan

The consultancy industry in Pakistan has the following type of operators:

- The accountancy bused firms.
- Small to medium size chartered accountants.
- Actuarial Firms.
- Small consultancies and sole practitioners.

Accountancy based firms: The accountancy-based firms are what are commonly known as the "Big-Four Firms" that include Arthur Andersen, Ernst and Young, PriceWaterhouseCoopers and Deloitte and Touche. All of these firms have their presence in Pakistan either through affiliations, representations or member firms. These firms dominate the local market with an overwhelming share of the business.

These accountancy-bused firms provide services across the whole spectrum of consultancy that includes audit, tax and business consultancy.

Small to medium sized chartered accountants: These can be classified as the middle ranking practices that are scattered throughout the industry. They are relatively very small in size compared to the big four both in terms of professional staff and the client base. The spectrum of the services provided by these firms is the same as the big four.

Actuarial firms: There are a few actuarial firms that are operating in the consultancy industry. Their traditional area of expertise was providing consultancy services on employee benefits and remuneration, but lately they have also diversified to the human resource consultancy side.

Sole Practitioners: There have been a growing number of sole practitioners in the industry. Some of them have come from a large consultancy and some from managerial post in business or industry.

Why MBA's generally do not prefer the consultancy profession in Pakistan?

No education/training of the profession: In Europe and USA, management consultancy is taught as an elective in most MBA curriculums to harvest basic understanding about the profession and the generic tools and techniques used in consulting assignments. There is now a standardized qualification worldwide for management consultants known as the Certified Management Consultants (CMC) which is awarded by the Institute of Management Consultancy in each country and governed by the Association of Institute of Management Consultancy.

In Pakistan, there is no specific training or courses to help business graduates in gaining an understanding of the generic consultancy tools or opportunities that exist in the profession. Management consultancy is either taught as a chapter in management courses or is the subject of a one-off guest lecture. Unlike Operations Management, Small Business Management and other topics which are covered thoroughly, Management Consulting Skills as a full-fledged course is still absent from business school curriculum.

Management Consultancy is a sole domain of chartered accountants: The consultuncy business in Pakistan is still considered to be the domain of chartered accountants and there are valid reasons behind it. The consultancy market in Pakistan is dominated by reputed chartered accountancy firms who are affiliate/corresponding or member firms of the global big four firms such as Arthur Anderson, Deloitte and Touche etc. However, whereas the global top ten also include non-accountancy firms like McKenzie, Baine Consulting, Logica, etc. in Pakistan, there are no non-accountancy firms that can give serious competition to the big chartered accountant. The consultancy market is thus predominantly controlled by Chartered Accountant Firms.

Chartered Accountancy firms are not the first choice of business graduates because of their relatively low starting salaries, luck of exposure to alumni of business schools, and not being able to market their professional services due to regulatory constraints. Most of the MBA's who land up in a Chartered Accountancy firm either use it as a stepping stone to an industry position or as a place where they can sit and hunt for better jobs.

One Myth that has also been hammered in the minds of budding MBA's is the statement "MBA's can not see eye to an eye with CA's in the long run". This is far from being true. The author himself has experience of working in a professional services firm and has managed teams of MBA and CA's without any problems. In fact, the synergy created by a collaboration of business vision and top notch financial and accountancy skills is invaluable to most professions.

Lack of patience: Business graduates also complain of a lack of career path in the consultancy profession in Pakistan. In Pakistan as well as globally, only a chartered accountant can become a partner of the firm.

A consultant in the audit department who starts at the bottom of the rung usually works his way up towards a CA qualification, which takes about three and a half years. In some cases where he has the right blend of skills, competence and maturity, he may end up being the partner of a firm in to six to seven year's time.

Business graduates, on the other hand who have already spent an average of two to four years studying full time are generally not that patient and complain of career stagnation after a certain level. Ultimately frustration sets in resulting in high turnover. One can argue that an MBA who stays in a professional service firm for a couple of years can also work towards a chartered accountancy qualification like their accountancy counterparts. However, it is rare that business graduates stay in a professional services firm for a long time as ultimately they move on to greener pastures

Lack of proper structure in consultancy firms: A proper career path is dependent on an organisational structure, which is clear and specific to the needs of the clients. Structure is in turn dependent on the type and depth of the market in which a consultant operates.

The consultancy market in Pakistan is still very small and shallow. There are no proper consultancy structures and job descriptions are complex and multidisciplinary. For e.g a consultant working in the human resource department would suddenly be deputed to a re-engineering assignment for which he has neither the experience nor the capability to deliver the goods. Unlike consultancies operating in a efficient and large market where the organisation is either on a functional (e-commerce, lean supply chain management) or industry (telecom, services, utilities) basis, the consultancy structure in Pakistan is arranged on an "ad-hoc basis" where consultants are constantly shuffled from one assignment from another which not only affects their own productivity but also damages the quality of the deliverables.

This deters MBA's from entering in the consultancy profession. Most of the graduates prefer multinationals, banks and brokerage houses where the growth might be relatively slow, but there is a proper career path and clear structure.

What can be done?

1. In order to increase the awareness of the management consultancy profession in business schools, an elective of "management consultuncy skills" should be introduced in renowned business schools like IBA, LUMS, ZABIST, AMI etc. There is no shortage of competent consultants in Pakistan who have the experience and skills to deliver the course.

2. An Institute of Management Consultancy should be established in Pakistan that would grant the CMC qualification to practicing management consultants in collaboration with the Association of Institute of Management Consultants (AIMC). Since CMC is a standard worldwide, this would also increase the market value of consultants that are posted abroad on short secondment.

3. Business graduates who are hired by Chartered accountancy firms should be given a clear career path to ensure that their skills are utilized in the right area and employee turnover is low.

4. Increasingly, more and more areas are coming up that require specific business consulting skills such as lean supply management, business process re-reengineering and change management. Business graduates should take an initiate and use their business knowledge (which is specific to this kind of consulting) to their full advantage.

The author is Chief Executive of Axis Consulting