The terms “consulting” and “advising” are often used synonymously to describe outsourced services used by companies to solve problems or improve performance. However, there is a qualitative differentiation between the two and it would be interesting to clarify their particular role as well as the way they interact with business needs and requirements. In a first, more generalized, approach, consulting is considered a process to help a company in dealing with a specific problem and finding an applied solution. In other words, a consultant will not only suggest a viable path but will also guide the entity to the exit of the problem. On the other hand, advising is consider a process to generate and participate in a thorough analysis of an existing situation, revealing of advantages and disadvantages and suggest alternative ways of handling the issue within a broader scope of the entity and the business environment.
In the real world of business it is perceived that a consultant will help the client to choose a solution and will deliver it, while an advisor will guide the client who knows or thinks of possible solutions to select the best one. In other words, consultants are problem solvers while advisors are problem definers. A consultant will offer a clear answer though an advisor will offer a broader perspective on the problem will direct the client on where to seek further help.
Regardless of the name you will use to define the service provider, the fact is that both interact with the business CEOs and managerial staff in improving the company’s efficiency and results. After all, there is a number of comparable indicators which will differentiate these two functions and define whether we are dealing with a consulting or an advising service. Such indicators are the approaching of the problem, the focusing, the degree of independence, the duration of the relationship and the type of expertise.
Consultants are hands-on problem solvers. They will work with you in discovering the root cause of a business problem, and will deliver the solution. Once the problem is solved, the relationship terminates. Advisors use a bigger picture approach to help you deal with ongoing challenges to your business. They will guide you toward improvements by assisting in problem discovery and analysis, but will also advise you on where to find helpful resources and services.
Consultants are specialists and, by definition, ought to focus on the particular issue under consideration. Advisors are generalists and should help you to align your technology and know-how to your company’s goals and processes.
Consulting is a more independent relationship because of the short-term nature of the work and the focusing to the specific issue. Advising is a more dependent relationship because of the greater link required in order to have an overall view of the business vision and performance.
Consulting a company might mean 2-3 specific projects within a 4-5 years span, without any other relationship in between. Advising a company might mean a year-round availability for frequent sessions of discussions and exchange of ideas. Sometimes, advising is also dedicated to the CEO, the business owner or the shareholders in terms of a personal business service.
Companies sometimes think of permanent services acquired by external providers as consulting (an external accounting office, for example). This cooperation has definitely a specialization and focuses on applied services, but – on the other hand – it is permanent, somehow binding and looks like a combination of consulting and advising. Well, as long as your accounting needs and requirements are served through an external entity or person, this is a type of permanent applied service which resembles to advising and you should exploit it like an advisor. You are always free to terminate this continuous service but, as long as you receive it, you can exploit the available expertise as if you have an advisor able to act both on a generalized and specialized approach.
The requirement for specialization in consulting will definitely accommodate young and skilful professionals who can deliver efficient results. On the other hand, the requirement for a generalized and thorough approach of the market and business environment requires experienced professionals with a greater exposure in different industries and extended periods of activity. It is, therefore, more likely that advising will accommodate elder professionals with a more extensive background and diversified professional record.
So, what will be the ideal profile of a consulting company? In answering this question, Steve Jobs, the late founder of Apple Inc., replied: ‘’A group of young doer’s sharing their office with a couple of grey-hair professionals having an extensive CV’’