Consulting and Professional Services: An Overview
Professional services and consulting are both about providing expertise to a client. Consulting refers to providing expert knowledge and strategic advice to aid decision-making. It is usually done on a project basis. Professional services refer to specialized assistance like accounting, auditing, financial advice, and risk management.
Evolution and Distinction
Management consulting has evolved into a distinct area of work. It is a way to support businesses in their processes and performance. This strategy is used not only by consultants but also by technically competent individuals whose occupations include teaching and research.
Choosing Between Consulting and Professional Services
When deciding between consulting and professional services, consider the type of project. A non-consulting provider is hired for services other than consulting, like real estate agents. The difference is whether the services involve thinking and are strategic.
Consultants call themselves advisers, specialists, analysts, or consultants. A consulting business can be a limited liability company. Examples of companies that use consultants include banks and retailers.
Understanding Professional Services
Professional services are specialized services that call for expert expertise in a particular sector. They offer services and expertise instead of a manufactured good. Contractual arrangements or consultancies provide these services, which are often bespoke and project-based.
Range of Services Offered:
- Management consulting
- Legal, accounting, engineering, architecture
- IT services, marketing, and HR consulting
Service Providers:
- Sole proprietors, partnerships, or corporations
Business Applications:
- Businesses in industries like banking and retail employ teams to provide professional services for customers.
- Major cities are global hubs for professional services firms.
Industry Insights
Some professional services now work via subscription, arguably making them managed services. The US professional services industry has about 910,000 establishments with $1.8 trillion in revenue. Occupations like architects, accountants, doctors, and teachers require licenses and specific skills.
Professional services are intangible, custom-tailored to meet unique client needs and often provided on a project basis. Businesses commonly use professional services to supplement internal expertise, improve efficiency, or access specialized knowledge.
The Modern Role of Professional Services:
Independent services often called "firms," get revenue from a client portfolio. Modern organizations require specialized knowledge and support where professional consulting services play a role. They offer specialized services to governments, businesses, and individuals.