Overview of the Management Consultancy Services

OVERVIEW OF MANAGEMENT ADVISORY SERVICESPRESENTORS: FOB

EVOLUTION

OVERVIEW OF MAS BY CPAS

AuditingAccounting

system design and installation

Income tax work

Management

consultancy

TRADITIONAL AREAS OF CPA FIRM

WHY MANAGEMENT CONSULTANCY?

Management

consultancy

CPA firms engage in

audit

Natural area of

development of a public accountant

Provide extremely

useful services to business managers

DEVELOPING TRENDS


Specialization in different

areas

Improvement of business education

Change in the

management culture

Technical Development

DEVELOPING TRENDS


FUTURE PROSPECT Management consulting will become

even more specialized Insight provider, creator and sharer of

information Management consultancy firms will tend

to remain small or quite large Sophisticated marketing Career attraction in management

consulting

OVERVIEW OF MAS BY CPASTHE CONSULTING INDUSTRY (definitions)

Information Technology (IT) Consulting and system integration Corporate strategy Operations management Human resources management Outsourcing

3 MAIN FACTORS IN GROWTH

Increase demand

Continued demand for information technology spending


IT Firms

Accounting firms

offering consultancy

Major consulting only firms

Independents

MAIN TYPES OF CONSULTING FIRMS

OVERVIEW OF MAS BY CPASCAREER STRUCTURE Analyst Consultants Senior Consultants/Managers Business Development Managers Directors/Partners

• Data Gathering• Evaluation and

recommendations of the client business• 3-5 years of

experience• Leads a consulting

team•Dealing with the client

team• Ability to take responsibility in running small

consultancy project• 5-10 years of

experience• Developing firms

product• Responsible for

building relationship with its client

•Involved in some large, complex consulting

projects

• Most experienced consultant

• Responsible for the development of the

organization• Leads strategic

development• Over-all responsibility

for projects

OVERVIEW OF MAS BY CPASMANAGEMENT CONSULTING

Independent and objective advisory service provided by qualified persons to clients

Recommend solutions or suggested actions with respect to the issues involved

Helps to effect constructive change in the organization


TWO TYPES OF ENCOUNTERS1. Consultations2. Engagements

• Providing advice and information during a

short time frame• Information provided

is orally• Information are

qualified to limitations

• Analytical approach and process is applied in a study or project


Independent Viewpoint• see the true

nature of the problems• distinguish

feasible and infeasible• unbiased

suggestion

Professional Advisory

• possesses special knowledge, skill and variety of personal attributes

• introduce new ideas into the organization

Agent of Change

• catalyst for change

Temporary Professiona

l Service• less

expensive• temporary

professional help

WHY USE MANAGEMENT CONSULTANTS?

CHAPTER 2Areas of Management Advisory Services -Part I

TYPES OF MAS ENGAGEMENTSa) Nature of the Problemb) Service Delivery Areac) Phases of the Analytical

Processd) Techniques and

Methodologies Appliede) Industry(or nature of

organization) f) Geographical Area

NATURE OF THE PROBLEM

a. Corrective

b. Progressive

c. Opportunistic

Situation in which conditions have worsened.Existing situation that can be improved.Situation in which a future opportunity exists.

SERVICE DELIVERY AREASo functions or activities in which the

problem exists.

Example:1. General Management2. Manufacturing3. Personnel4. Finance and Accounting

General AccountingCost Accounting

Capital Investment

PHASES OF ANALYTICAL PROCEDURE

a. Identifying objectivesb. Defining the problemc. Finding out the facts d. Developing the solutione. Implementing the solution

TECHNIQUES AND METHODOLOGIES APPLIED

Example: Capital Investment planning can be aided by a discounted cash flow model.

INDUSTRY OR NATURE OF ORGANIZATION

GEOGRAPHICAL AREAS

AREAS OF MS PRACTICE1. Management functions of analysis, planning,

organizing and controlling.

2. Introduction of new ideas, concepts and methods to management.

3. Improvement of policies, procedures, systems, methods and organizational relationships.

4. Application and use of managerial accounting, control systems, data processing, and mathematical techniques and methods.

5. The conduct of special studies, preparation of recommendation.

TYPES OF CONSULTANCY WORKA. Business planning and development or Project

feasibility studiesB. Information systems consultingC. Management / Operations auditD. Business process improvement / reengineeringE. Others such as

1) Marketing Research 2) Marketing Strategy Development3) Developing promotional campaign4) Planning sales force activity5) New product development6) Developing proposal for financial support7) Staff Recruitment8) Exporting and international market

BUSINESS PLANNING AND DEVELOPMENT (PROJECT FEASIBILITY)

o Effective consultant can use the project proposal to establish exactly what the client wants and to manage his or her expectations about what can realistically be achieved.

INFORMATION SYSTEMS CONSULTING

Information needed: Business’s external situation and its

internal state.

Operational Audit are conducted to evaluate the effectiveness and/or efficiency of operations.

MANAGEMENT / OPERATIONS AUDIT

BUSINESS PROCESS IMPROVEMENT / REENGINEERING

o It is the complete redesign of a process with an emphasis on finding creative new ways to accomplish an objective.

o It involves developing new ways to perform existing activities and ways to stop performing non-value adding activities.

OTHER TYPES OF CONSULTANCY WORK

o Process through which managers discover the nature of the competitive environment in which they are operating.

MARKETING RESEARCH

TWO TYPES:1. Primary Research

a. Quantitative Researchb. Qualitative Research

2. Secondary Research

OTHER TYPES OF CONSULTANCY WORKMARKETING STRATEGY DEVELOPMENT

Defines the approach the business will take in order to get the customer’s attention and get them to spend their money on the business’s products or servicesDEVELOPING PROMOTIONAL

CAMPAIGNS Any program of activities dedicated to

informing customers about a product, stimulating their interest and encouraging purchase.


PLANNING SALES FORCE ACTIVITY

Overall organization of the team Sales team training Sales team motivation Planning sales campaigns


NEW PRODUCT DEVELOPMENT Understanding the customer’s needs through

market research Technical advice on product development Identifying and contacting suppliers of critical

components Development of marketing and PR campaigns

to support the launch Developing promotion campaigns to get

distributors on board Financial planning and evaluation of the return

on new product investment

OTHER TYPES OF CONSULTANCY WORKDEVELOPING PROPOSALS OF FINANCIAL SUPPORT

Evaluation of the business’s investment needs

Identification of funding providers and how they might be contacted

Developing an understanding of the criteria employed by funding providers and how these might be addresses

Developing communications with funding providers

OTHER TYPES OF CONSULTANCY WORKSTAFF RECRUITMENT

Assessing the firm’s human resource requirement and identifying skill and knowledge gaps

Creating advertisements to attract the right people

Development assessment criteria, interview procedures and psychometric testing of candidates

Advice on the reimbursement packages new recruits will expect

OTHER TYPES OF CONSULTANCY WORKEXPORTING AND INTERNATIONAL MARKETING

IN PARTICULAR THE CONSULTANT CAN SUPPLY:

An overall insight into regional, social and macroeconomic development

An analysis of the growth and evolution of specific markets

An evaluation of consumer needs and requirements and how these are being satisfied currently

IN PARTICULAR THE CONSULTANT CAN SUPPLY:

Information on regulatory and legal issues

Details of the existing supply structure and competitors present

An investigation into distribution channels and possible partners

Information on advertising and promotional opportunities

CHAPTER 3Areas of Management Advisory Services-Part II

I. TRADITIONAL SERVICE

ManagemencuntingManagemen

t Accounting

Decision Making

Controlling

Planning

I. TRADITIONAL SERVICEB. Design and Appraisal of Accounting

System1. Development of an accounting system for newly-

organized firm2. Revision, partial or complete, of an existing

accounting system3. Extension of the present accounting system to cover

new business activities.4. Accounting service in general5. Accounting Machines installation6. Internal Control Studies and Installation

C. Financial Management- related services

D. Project Feasibility Studies

II. EMERGING CONSULTANCY SERVICES

Global Risk Management Solution Managing totality of risks-financial, operational

and systems, and strategic to improve financial and business performance.

1. Financial Risk Management2. Strategic Risk Management3. Operational and Systems Risk

Management 4. Compliance Risk Management5. Internal Audit Services


Transaction Services Involves services related to mergers,

acquisition, divestitures, joint ventures, spin-off and strategic alliance

Financial Advisory Services CPA’s provide financial, economic and

strategic advice to companies with complex business problems and disputes.


Project Finance and Privatization Involves management advisory services related to

partnership between the public and private sectors in delivering infrastructure and services or privatization and project finance.

Valuation Services Guide clients through complex business

transaction such as acquisition or divestiture of investment, debt structuring and finance-raising, entry to major stock exchange, mergers.


Business Recovery Services CPA’s provide services to troubled business by

emphasizing on the implementation and rationalization and recovery programs designed to rebuild value.

Dispute Analysis and Investigations Environmental analysis, real estate

damage, investigative services, construction disputes, investigative services, economic and financial analysis.


Computer Risk Management Help client understand and manage their

business risks relating to implementation and use of technology

Application Software Selection and Implementation

Assist clients in prioritizing their needs, identifying the right software and tailoring it to meet their specific requirement.

DETERMINING SCOPE OF SERVICE

1. Responsibility to establish scope of services

2. Independence3. Competence4. Requirement for specialization5. Identification and Resolution of

client’s basic problems6. Referrals7. Code of Professional Ethics

TYPES OF CLIENTS SERVED

Types of Clients Served

Contact Clients

Intermediate Clients

Primary Clients

Unwitting Clients

Indirect Clients

Ultimate Clients

GROUP OF CLIENTS THAT CPA’S CAN PROVIDE MAS

1. Privately-owned Business firms2. Governmental Agencies and

Organization3. Not-for-Profit Nongovernment

Organization4. Professional Association5. Others

THE DECISION TO USE AN ACCOUNTANCT

A. What can I offer the client business that will enhance its performance and help achieve its objectives?

B. Why will my contribution be more valuable than that which existing managers and potential recruits can contribute?

C. How can I communicate to the client business than what I offer is valuable?

Provision of Information• Information is valuable to a business• It has a cost• Information is a resource that must be

managedProvision of Specialist Expertise• Require the application of technical knowledge

and an ability to use specialist analysis techniquesProvision of a New Perspective

• Managers are not decision making automata• 'cognitive maps', 'mindsets', or 'dominant

logics' are used by managers to see their managerial world

• Consultant can offer a fresh mind to an issue

PROVISIONS

PROVISIONSProvision of Support for Internal Arguments• Disagreements arise over a wide range of

issues• Conflicts of opinion take a variety of formProvision of Support in Gaining a Critical Resource• Organization must attract resources in order

to survive• One of the manager's most critical function is

attracting resources on behalf of the firm• Consultant can be of great value in

structuring a proposal and advising on how it might be delivered

PROVISIONS

Facilitating Organizational Change• Organizations change all the time• Managers change their roles and

responsibilities• Change usually meets resistance• Sometimes organizations call for change as

the primary goal of the consulting exercise

FACILITATING ORGANIZATIONAL CHANGE

Organizations change all the

time

Managers change their

roles and responsibilities

Change usually meets

resistance

Sometimes organizations

call for change as the primary

goal of the consulting exercise

Dayag, DaisyDela Cruz, HazelManongdo, Rudith AnnPadilla, JeffersonZambrano, Judy Mae