COST CONSULTANCY NEW DIMENSION SERIES 1

 

Do you know consultancy is all about thought and nothing about saving costs?  Do you know that even that cost management itself is nothing but a thought-driven process-created system created by professionals?  The IT industry evolution is a perfect example where from a back-end-driven service provider we are now the biggest technology innovator creating new economies of business models. Further when the domestic IT Company moves to an overseas market the pricing changes but the human labor remains the same. In short, the thought remains the same but only the location change makes the difference. It means that we are quoting ourselves much below the level of our ability. Cost advisory is no longer low-cost advisory or cost reduction but of value creation in the organization.  The talent of advisory remains the same but it’s the branding that plays its dice and that is the place where one needs to think about changing the dynamics of the profession.

Today the client does not want advice on how to save cost or reallocate cost but they need how business value, new propositions, and new IT frameworks could be added to drive valuation.   The branding of the profession as a consultant needs to be given its correct valuation. The same talent, when disguised under the global outfit one, gets significant value where we as the same at home (India) gets low valued. . But the talents remain the same then why we get these differences? The difference is in the thought process of presenting the firms and talent accordingly.

Today the Indian economy has entered into the world of valuations where business is no longer seeking cost advisory since the same has been replaced by the IT framework.  Every business has reduced its cost of operating and has significantly made efficient strategic cost management. Now a CFO is expected to know how IT systems will add value to the business and will drive valuations for growth. The surprising part is that the definition of valuations itself has also changed dramatically in the last couple of years. Longer business growth with multiple business models linked with or without profits is the new valuation model.  It's a change of thought and hence you being an advisor need to upgrade and bring yourself to the international levels now. Gone are the days of being a low thought organization.

 Why your advisory business needs to be a low fee? Why your consultancy fee needs to below under the disguise of competitive rates? The advisory or consultancy services need not be at a low cost to keep your clients intact. On the other way round you are focusing and narrowing down your area of focus and compromising on prices where your quality is high in terms of deliveries. We need to understand that the Indian economy is no longer the same old economy and we are having around 40 UNICORNS in India.

The climate of investments, the change of process and function at the corporate level as well as in the Indian economy gives a significant opportunity for getting consultancy firms like McKinney. Now please don’t underestimate yourself since the startup community of India does not make one ashamed of thinking big. Today, India has around a 550,000-strong base of founders, managers, and employees with ample experience working in startups, and this is estimated to reach 3.25 million by 2025.

The quality of Indian corporate has increased to multifold but on the other hand, the consultancy or advisory business fess has just come down in order to be competitive. The fact is that professional values have been lowered with quality service whereas the appropriate valuation of the “Industry” has been diluted.  The advisory business is no longer a low-cost model but a change of thought-based value identification.

The point is that we need to think big and upgrade the level of advisory in terms of the Quality and Value proposition we are creating for the clients.  But clients are willing to pay for talent whereas the location does not matter now.  You are being paid for your thoughts and now for your low fees. In fact, low-cost fees lead to raise questions about quality and standards. This is the new India. One must understand and keep in mind those overseas companies often buy out or take up stakes in Indian consulting firms. These are based on quality standards and not based on low-cost fees.  Hence lowering the fess and doing consultancy at a low-cost fee is no more a profitable business.

It's time to expand and grow and come together to form world-class quality and standards followed by pricing standards. Your talent is not for providing low-cost advisory services but for providing quality advisory services. The thought leadership in advisory services needs to be identified and tagged with a price. India is No longer an Emerging Economy It’s a Developing Economy… Cost Accountants Think on the same.