DID YOU KNOW?

Management consulting continued... The post-Enron business landscape proved to be challenging terrain as financial auditing scandals of the early 2000s delivered a blow to the advice industry. The consulting business, however, continued to be lucrative in the years following, particularly for companies that spun off from accounting firms.

The passage of the Sarbanes-Oxley Act brought strong demand for compliance advice and big consulting firms began to minimize their management consulting practices to focus instead on the quality of their audit business. In addition, mergers and acquisitions continued to fuel the need for expert guidance as deals requiring months of financial due diligence and planning became the norm.

By the mid 2000s, firms had started to rebuild their management consulting business after seeing better growth opportunities in areas such as technology, data analytics and cyber security. By now, the population of the Internet reached one billion and technology and business consulting accounted for more than half the revenue of big firms. The management consulting companies that continued to thrive were the ones with specialized offerings, as the leading firms started moving away from the traditional Big Five consulting model.

Most management consulting companies have remained resilient to recession and economic downturn thanks to the ever-growing onslaught of regulations that corporations face. As the need for professional and specialized advice in information technology and human resources continues to grow, institutions are relying more on the same strategic and analytic principles that have helped corporations for decades. At many top business schools, as much as 33% of the graduating class will sign with consulting firms upon graduation.

More tomorrow...