4.4 Qualitative evaluation of consulting services
Management Association of Russia detects reasons why management of enterprises requires consulting services36 (see Figure 10). The most of all business needs the use of knowledge and skills possessed by professional advisers (note that almost 60% of respondents). Independent diagnostic of the company couldn’t be executed without help of external consultants. More than 50% of respondents indicate that they use the services of external consultants to obtain an unbiased "snapshot" of the organization.
Almost a fifth of Russian firms using the services of management consultants in the case of lack of human and institutional resources for the independent solution of management problems. Often this proves to be effective, especially when the load of this kind is unevenly distributed in time.
About 7% of senior managers use consultants to justify the decisions taken by management. These managers reasonably believe that the evaluation of solutions from the outside expert help to avoid unproductive objections and resistance of staff.
The most effective, according to representatives of the Russian business community, the use of consultants to conduct diagnostic organization and assess the effectiveness of its operations, i.e. actions which would allow full use of the most important advantage of an external consulting - the independence and impartiality.
The effectiveness of the works themselves to optimize the performance of consultants in specific functional areas of study is somewhat lower, but also at a good level. The consultants have demonstrated their effectiveness and as independent expert projects and solutions. It is fully evident benefits consultants as carriers of a large store of knowledge and best practices in various areas of business.
Figure 10. In
which situations Russian enterprises have resorted to the assistance
of external management consultants?
Figure
11. Was the result of interaction consistent with the consultants'
expectations of Russian companies?37
Results of the customer satisfaction research of Management Association of Russia (see Figure 11) indicate that about 60 per cent of the customers received the consulting services on the expected level. Less than 30 per cent received the services on the level worse than expected.
4.5 Market capacity and market growth
The current volume of the Russian consulting market at around $ 2 billion, of which $ 700-900 million are for audit services. about $ 250 million of recruiting.
Market dominated by the Big Four (PricewaterhouseCoopers, Ernst & Young, KPMG, and Deloitte) estimated from 20 to 30% in value terms38.
More than a third of services performed by Moscow business consultants (see Figure 12). Over 10% of revenue is generated by companies operating in St. Petersburg, the Siberian and Volga federal districts. Approximately the same number (5-6%) in the Central (excluding Moscow), Ural, Far Eastern Districts. The least of all business consultants’ sales are in the South (3.2%) and Northwestern (without St. Petersburg) (2,7%) federal districts.
Figure 12. Distribution of consulting services in Russia39
Current market situation
Market growth was observed for period of ten years. Only in 2008 crisis year market growth was only 18 % and in 2009 market encountered slight decline in 5 % (see Figure 13).
Figure 13. Growth and decline rates of consulting services in Russia40
Figure 14. Rate of change in consulting groups in 2009. 41
Decline was observed in more then half of consulting practices (see Figure 14). As shown by the rating, despite the crisis results in 2009 were for consultants is not so dramatic. According to the 2008 total revenues of 150 consulting firms fell (see Figure), reaching almost 79 billion rubles (about $ 2 billion). Inflation-adjusted decline in real income is estimated in 15%.
However, the heaviest losses suffered from the crisis consulting in the field of personnel management, strategic planning and marketing. Proceeds of participants ranking in these services sectors declined for the year at 24, 28 and 51% respectively.