What is the Consulting Industry All About? An Expert's Perspective

Consulting services are part of professional services and represent a significant portion of annual revenues. The roots of the consulting industry can be traced back to the late 19th century, when the world's first modern consulting firms were established. This article takes a closer look at the origins of the consulting industry and provides information on its main characteristics and the ecosystem in which consultants operate. Within organizations, consultants are expected to act professionally, possess the necessary qualifications, and be able to deliver a high level of service to clients. The internationalization of the consulting industry began in the early 1960s, when large American management consultancies expanded to Europe, bringing their management models and expertise to transform European organizations.

Internal consulting functions typically involve corporate development, project management units, specialized advisory departments, and consultants who take on managerial roles. In the late 1990s, the consulting sector experienced a period of growth due to a variety of factors such as a strong global economy, increased computing power, penetration into emerging markets, privatization, globalization, and the emergence of new information technology consulting practices. In the 1960s, several new management consulting firms were formed, including Roland Berger and Boston Consulting Group (BCG). Most consultants work in large and medium-sized consulting firms; however, these firms only account for about 15% of all consulting firms. The majority of companies operate as sole proprietorships.

It is also worth noting that the websites of major management consulting firms are excellent sources for more information about consulting. There has always been an unclear distinction between management consulting and other types of consulting such as information technology consulting and human resources consulting. This line remains blurred today. In the early days of the consulting industry (which started in the US before spreading to Europe and other parts of the world), the first consulting firms mainly focused on solving technical and financial problems. Although anyone can call themselves a consultant without any special qualifications or protection, most consultants in this sector are highly trained professionals. In addition to consultants who work in the consulting sector, advisors are increasingly playing consultative roles outside this sector by leveraging their consulting skills.

Management consulting began to gain traction in business circles at the turn of the century but it wasn't until the 1930s that consulting firms started to grow beyond a few founding partners and small teams. The history of the consulting industry dates back to the end of the 19th century with the establishment of the world's first modern consulting organizations, also known as business advisory firms.

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