Management Science Letters 8 (2018) 475–482

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Management Science Letters

homepage: www.GrowingScience.com/msl

Key performance indicators of management consulting

Aygul Z. Ibatovaa*, Valentina I. Kuzmenkob and G. S. Klychovac

aTyumen Industrial University, Russia

bElabuga Institute (branch) of Kazan (Volga Region) Federal University, Russia
cKazan Federal University, Institute of Management, Economics and Finance, Kazan, Russia

CHRONICLE ABSTRACT

Article history: The developing theoretical managerial concepts and applied managerial techniques comprise the
Received: November 26, 2017 basis for the modern innovative management of an agricultural enterprise. Management consulting
Received in revised format: Janu- occupies a special place in the managerial process. It is aimed at rendering experts’ support to the
ary 31, 2018
specialists of an economic entity as well as developing recommendations for the promotion of
Accepted: March 29, 2018
Available online: activity efficiency in the enterprise on the basis of theoretical and applied knowledge in the field
March 29, 2018 of management. Complicated conditions for activity carried out by the Russian agricultural com-
Keywords: modities manufacturers cause the necessity in the real managerial activity integration with the sci-
Key indicators of efficiency entific research works in the field of management. Hence, the necessity occurs in professional
Methodological tools management consulting by considering technological features of the production process and the
Management scientific basics of management. This article considers the economic essence of management con-
Management consulting sulting, offers a conceptual model and methodological instruments, and develops the system of
key indicators of social-economic activity efficiency as an instrument of management consulting.
© 2018 by the authors; licensee Growing Science, Canada

1. Introduction

The current state of management consulting as one of the professional activity types is characterized
by the emergence of innovative management procedures, methods and tools, which are construed as
one of the competitive advantages types and the main factor contributing to the strategic, tactical and
operational activity effectiveness. At the same time, there is a certain terminological discrepancy be-
tween the framework of categories, insufficiently substantiated structuring of key components, and an
uncertain relationship with other economic sciences in management consulting as a field of scientific
knowledge. In this connection, there occurs a necessity in the development and justification the con-
ceptual foundations for management consulting that could correspond to the current trends in the de-
velopment of economic science. The following main typical features for management consulting are
distinguished in the literature: management consulting is aimed at introducing certain changes in the
structure of financial and economic activity of the organization; management consulting is carried out
by highly qualified specialists in conjunction with the management of the organization; management
consulting is aimed at improving the organization efficiency; management consulting is characterized
* Corresponding author.
E-mail address: [email protected] (A. Z. Ibatova)

© 2018 by the authors; licensee Growing Science, Canada

doi: 10.5267/j.msl.2018.3.004
476

by a complex nature consisting of various activity lines of the organization transformation (Kolbina et
al., 2016). Management consulting is a set of interrelated procedures aimed at providing professional
support to the company management in strategic development for achievement of competitive ad-
vantages and in solving managerial and production issues in conditions of limited resources and uncer-
tainty of economic situations, as well as taking into account the measures for their practical implemen-
tation based on the analysis of economic data on its internal and external environment. One should
distinguish strategic, tactical and operational consulting depending on the objectives pursued by man-
agement consultants, rendering assistance to the business leaders in the process of developing systemic
and integrated solutions to the issues connected with management organization of complex systems in
different areas of activity. Strategic management consulting is aimed at providing consulting assistance
to the company management in assessing the external environment in order to find and effectively use
the internal opportunities in achieving a sustainable competitiveness of the enterprise in the long term
perspective. Tactical management consulting is designed to provide in consulting support in identifying
means enabling business leaders to transform their strategic plans, goals and decisions into activities of
the executive staff. Operation management consulting is based on the information feedback property
and is aimed at creating conditions for rapid response of managers to significant deviations of the actual
data from the planned one.

2. Methodology

When formulating a conceptual model, it is necessary to formulate properly, identify system-forming

elements and develop practical implementation techniques aimed at improvement the efficiency of the
company operation, including its purpose, functions, tasks, object, subject, methods, principles and
tools (Salimon et al., 2017).

The proposed model highlights, conceptually specifies and structures elements forming theoretical ba-
sis of the modern concept of management counseling (Fig. 1). The objective of management consulting,
in accordance with the author's concept, is to conduct certain consulting, analytical and research work
related to the substantiation of development prospects and application of organizational, economic,
scientific, technical and methodological innovations, taking into account the needs of the economy and
the management of commercial and non-profit organizations, regardless of their size, organizational
and legal form and industry affiliation.

The main tasks of management consulting are defined in the above description as follows:

 forecasting and analysis of environmental conditions affecting the enterprise operation, with
the purpose of selecting, implementing and evaluating the efficiency of the enterprise’s com-
petitive development strategy (Gorman & McCarthy, 2006; Klychova et al., 2017);
 evaluating the internal processes and resources of the enterprise, which form its potential, for
exercising control and increasing the efficiency of their use (Huning et al., 2011);
 providing of certain methods and tools to the client for carrying out organizational diagnostics
of the company’s state, solving the identified problems, elaborating strategic plans for the or-
ganization development (Klychova et al., 2017; Kalenskaya & Shafigullina, 2014);
 rendering assistance in acquiring special knowledge (in particular, in forecasting of economic
situation, situation analysis), mastering methods used in the process of identifying problems
and implementing changes (the so-called training consulting).

Goals and objectives of management consulting determine its functions. The following functions of
management consulting can be distinguished: analytical; planning-forecasting; consulting; controlling;
coordinating.
 A. Z. Ibatova et al. / Management Science Letters 8 (2018) 477

One of the key elements of the management consulting system is the integrity of its matter, objects,
subjects and their interrelation. The object of management consulting is the object of management as a
special type of labor activity. The subject of management consulting is a management consultant or a
management consulting specialist with special knowledge and practical skills who fulfills the activity
of the client’s company performance improvement (Klychova et al., 2014b; Klychova et al., 2014a).

The matter of management consulting is the method of introducing managerial and economic
knowledge into the company practical activity. The main specific matter of consultation is the process
of production and sales of products, the so-called “consulting service”.

Aim

Tasks

Functions

Subject Object Object

Principles

Method

Methodological tools
Cooperation meth-
Diagnostics method

Solution develop-

Developments in-

Roles selection
ment method

troduction

method

od

Consulting process
Estimation of consulting results

Preliminary Pre-project Project Post-project

stage stage stage stage

Consulting Prelimi- Diagnos- Development

preparation nary nego- tics of the of cooperation
tiations on problem and assistance
possible to the client in
coopera- Introduc- changes im-
tion tion of plementation
changes

Fig. 1. Conceptual model of management consulting

The consultant’s activity is based on the initial provisions of management consulting, which are en-
shrined in its principles. Moreover, it should be noted that, depending on the management consulting
478

directions at different time levels, the consultants may be subject to additional requirements that act as
particular principles. Thus, the principles of management consulting are as follows: legitimacy; scien-
tific character; sustainability; flexibility; dynamism; professional competence; timeliness; safety of the
system; upgrading ability; responsibility; efficiency.

The modern system of management consulting uses various tools and methods, both private and bor-
rowed, integrating them depending on the tasks to be accomplished.

Based on the conceptual approaches to management consulting, each company forms a separate meth-
odological toolkit providing assistance to the head of the client organization in diagnosing, analyzing
and settlement of practical production and management problems. Methodological tool of management
consulting represents a complex mechanism for integration and coordination of individual tools, the
variable application of which contributes to the achievement of the set goals (Klychova et al., 2015c;
Klychova et al., 2015a; 2015b). The tool is a means of practical implementation of its methods.

In accordance with the above conceptual model of management consulting, the following groups of
methods can be distinguished: diagnostic methods, methods of problem solution, method of develop-
ments implementation, method of the roles for a consultant and a client selection, methods of cooper-
ation and assisting a client in changes implementation (Boeger et al., 2008).

In the process of consulting, the consultant performs joint activities with managers and specialists of a
client’s organization. Efficient approach to organization of management consulting affects the effi-
ciency of the resources application, as well as the achievement of necessary results, the quality of the
expected changes, and further successful cooperation of the parties. The consultation process includes
the following stages:

 The preliminary stage is based on the awareness on the part of the company management team
of the problems existence and the need in their resolving through the outside consultant. This
stage is dedicated to collecting and analyzing information on consultants, their services, and
cooperation conditions;
 Pre-project stage. At this stage, negotiations are held between a consultant and a client-company
on possible cooperation and possible ways of resolving them. At the pre-project stage, training
and consulting activities (seminars, exhibitions, conferences) with the participation of future
clients and consultants are effective;
 Project stage. At this stage, the consultants carry out diagnosing of the client’s company, collect
data and form a comprehensive picture of the organization's vital activity for analyzing data on
the organizational, technical, financial and economic status, as well as prospects for the enter-
prise development (Safiullin et al., 2014c). The project phase is completed with the implemen-
tation phase;
 Post-project stage. At this stage, the completed work is evaluated, and the actual results are
compared with the planned ones, deviations volume and the reasons for their occurrence are
analyzed, additional corrective measures are carried out, a report is made on the fulfilled work
and an acceptance - delivery certificate is signed.

After the completion of a specific task, the consultant and the client company can agree upon continu-
ation of working relations. In particular, if the necessity of cooperation with the client prolongation is
found in the process of the task performance assessment, the consultant may continue his work, as
indicated in the final report. In addition, there may occur a need in identification and solution of new
emerging issues in the company’s production and financial activity.
 A. Z. Ibatova et al. / Management Science Letters 8 (2018) 479

3. Results

One of the main reasons for using consulting in a company is the expected positive economic effect, as
the client is interested in the quality of the result, but not the process of counseling. However, it should
be borne in mind that the result obtained from the implementation of the consulted project can be under
the influence not only of the consultant, but also of the client himself. In assessing the quality of the
advisory work, the following factors are taken into account: macro and microenvironment as well as
the specific situation in the company itself; qualification, personal experience, goals and motivations,
personal qualities of the consultant; experience, worldview, personal qualities of the client.

It is advisable to apply a system of key performance indicators for evaluation of management consulting
efficiency. At the present stage of economic reforms KPI (Key Performance Indicators) is one of the
main tools for assessing the efficiency of production, elaborating a development strategy based on this
assessment, monitoring and control of the employees business activity, of structural units and the en-
terprise as a whole (Lee et al., 2011). Using the Key Performance Indicators system, the current situa-
tion is analyzed in a strategic perspective, and each employee can objectively evaluate his contribution
into the implementation of the company's development strategy. The KPI system, being a flexible man-
agement tool, can vary depending on the objectives of the enterprise. In modern production, in addition
to determining the management personnel efficiency, KPI is used in the management of business pro-
cesses. This is due to the fact that the KPI system includes direct indicators of efficiency, effectiveness,
productivity of business processes (Strelnik et al., 2017).

The Key Performance Indicators allow us to establish the causal connections between the targets and
the set parameters for determining the patterns and mutual factors of influence on financial and pro-
duction activity, identifying the dependence of some indicators on the other ones (Nizamutdinov et al.,
2014c; Klychova et al., 2015d). The development and the implementation of Key Performance Indica-
tors system is caused by the need to ensure transparency and measurability of the business, and the
opportunity for developing optimal management decisions (Rompho, 2011). The difficulty in assessing
the advisory activity is that it is not always possible to clearly express quantitative results and determine
the share of the consultant due to the influence of a number of factors on the consultation process. In
this regard, we propose to evaluate the management consulting process in terms of the benefits received
by the consultant and the client in four interrelated blocks: finance, market, business processes and
employees with determination of their qualitative and quantitative component (Antonchenko & Ka-
lenskaya, 2014). In addition, in our opinion, in assessing the effectiveness of the management consult-
ing it is necessary to take into account its social components. At the enterprises of the agro-industrial
complex, the development and implementation of human resources, the formation of environmental
sustainability and the implementation of socially significant projects form the basis of social efficiency
(Teixeira, 2013). In the process of human resources development and realization, it is necessary to take
into account the harmonious individual development of each employee’s, his qualifications, flexibility
and mobility, a favorable social climate, social activity and improvement of the whole way of life
(Teixeira, 2013; Klychova et al., 2016; Klychova et al., 2017; Ibatova, 2017). These factors have a
direct impact on the labor quality. Key indicators for assessing the development and realization of
human resources are presented in Table 1. It is possible to draw conclusions about the effectiveness of
management consulting upon comparing the key indicators before and after its performance. Thus,
analyzing the data in Table 1, it will be possible to conclude that management consulting resulted in
the increase in indicators characterizing the development and implementation of human resources, for-
mation of environmental sustainability and the effectiveness of implementing socially significant pro-
jects. For example, the costs associated with retraining and qualification upgrading of one employee as
well as the amount of additional social guarantees were increased by 7.2% and 6.7% respectively; the
number of employees who passed retraining and qualification upgrading was increased by 11.8%.
480

Table 1
Indicators of development and realization of human resources assessment
Indicator Calculation method Before carrying After carrying
out management out management
consulting consulting
∑Zppk1r ∑zppk1r = ∑zppk ÷ N 12,5 13,4
1. Costs for retraining and qualification up- where, ∑zppk – total costs for retraining and qualifi-
grading per one employee, thousand rub. cation upgrading, thousand rub.
per one person. N – number of employees in organization, people
∑Nppk ∑Nppk = Nppkr+Nppks+Nppkruk 34 38
2. Number of employees, who passed retrain- Nppkr - Number of workers, who passed retraining
ing and qualification upgrading, people, in- and qualification upgrading, people.
cluding: Nppks - Number of specialists, who passed retraining
workers and qualification upgrading, people
specialists Nppkruk - Number of managers, who passed retrain-
managers ing and qualification upgrading, people
HO1pers HО1pers= 24 32
3. Number of training hours per one employee (HОtot-HОoblig)÷ N
hours per one person HОtotal – Number of training hours (internal exter-
nal) for the reporting period, hour
HОoblig Number of obligatory training hours for the
reporting period, hour
N – number of employees in the company, people.
Qppk Qppk = Nppk÷ N×100% 26 28
4. Share of employees, who passed retraining Nppk – Number of employees, who passed retraining
and qualification upgrading, in the total and qualification upgrading, people
number of employees, % N – Number of employees in the company, people
Qsg Qsg=∑Ssg 4582 4891
5. Volume of additional social guarantees, ∑Ssg – total amount of funds actually spent for, ad-
thousand rub. ditional social guarantees
6. Vebpp Vebpp=∑Zebpp÷ q 18,6 20,4
Amount of funds allocated by the enterprise ∑Zebpp - amount of funds allocated by the enterprise
for organization of environmentally safe for organization of environmentally safe production
production activity, thousand rub. per pro- activity, thousand rub.
duction unit q – volume of manufactured products
7. Vоchs Vochs=∑Zochs÷ q 7,2 8,6
Amount of funds allocated by the enterprise ∑Zochs – amount of funds, funds allocated by the en-
for waste disposal facilities construction, terprise for waste disposal facilities construction,
thousand rub. per production unit thousand rub.
q – volume of manufactured products
8. Vzvs Vzvs=Мzv÷ ∑Ztot, 0.0009 0.00084
Volume of pollutants discharge in value где Мzv – volume of pollutants discharge, tons
terms, tons/thousand rub. ∑Ztot – total value of costs for manufacturing and
sales of products
9. INVооо INVооо= ∑Zооос 4361 4768
Sum of investments in the objects of envi- ∑Zооос – cost of investments in the objects of envi-
ronmental protection, thousand rub. ronmental protection, thousand rub.
10. INVs INVs = ∑(Zb+Zoi+Zfsp) 2984 3289
Investments in the community, thousand Zb= charity costs, thousand rub.
rub. Zoi= public infrastructure development costs, thou-
sand rub.
Zfsp= social programs funding costs
11. Vpgkx - volume of funds allocated for sup- Vpgkx= Zpgkx ÷ q 14,90 16,85
port of housing and utilities sector and ob- Zpgkx – sum of costs allocated for support of housing
jects of cultural and historical value, and utilities sector and objects of cultural and his-
rub./unit of production torical value, thousand rub.
q – volume of manufactured products
12. Vba - volume of funds allocated for holding Vba= Зba ÷ q 12,1 14,8
charity events, rub./ unit of production Zba – sum of costs allocated for holding charity
events, thousand rub.
q – volume of manufactured products

Also analyzing this Table, one can see the increase in the amount of funds allocated by the enterprise
for the purpose of environmentally safe production activity maintaining and for the construction of
treatment facilities and the reduction of pollutants emission, water and wastes discharge. This fact in-
dicates that after conducting management consulting the enterprise has fully utilized the available po-
tential for environmental performance improvement. The data in the Table 1 indicate an effective so-
lution of the most important social problems, ensuring the achievement of the goals set for the addi-
tional social security of the workers and the rational implementation of social policy. Thus, the amounts
of investments into the environmental protection objects as well as investments into the community
 A. Z. Ibatova et al. / Management Science Letters 8 (2018) 481

have increased by 9.3% and 10.2%, respectively; the amounts of funds allocated to the support of so-
cially unprotected strata of the population, to support of housing and communal services and cultural
objects of historical significance, to support of socially significant events and charity events have in-
creased by an average of 15%.

The advantage of applying these key performance indicators is as follows: systematic approach to the
analysis of activities, as the used indicators reflect key factors in increasing management efficiency;
the analysis gives evaluation of the dynamics and changes in key indicators, making it possible to
analyze both effective and unprofitable companies on the basis of the unified criteria; the methodology
assumes calculation of various indicators including natural and value, qualitative and quantitative. This
technique allows any organization to assess the real management efficiency of production and financial
activity.

4. Conclusions
We now can conclude that the provision of professional consulting assistance in solving management
problems significantly affects their quality, improves the skills of management personnel, improves
information management, disseminates and introduces managerial innovations and scientific and prac-
tical knowledge. Using the proposed conceptual model of management consulting in the organizational
structure, in conjunction with the basic approaches, methods, tools, models, methods and conditions,
managers of enterprises will be more accessible to the process of determining the effectiveness of man-
agement consulting. When solving problems and issues in complex economic structures in the context
of a systematic approach, it is necessary to create an appropriate system of criteria and indicators, which
should correspond to the basic principles of reliability and relevance. To assess the effectiveness of
management consulting, it is advisable to apply the KPI system, which provides an opportunity for a
comprehensive assessment of the results of management consulting in qualitative and quantitative
terms, both for the client organization and for the consultant. The proposed system of key performance
indicators promotes attracting and retaining the consumer, increasing the professionalism of employ-
ees, increasing incomes and reducing costs. With the help of complex analysis, it is possible to realis-
tically assess the effectiveness of management consulting, determine the best organizational forms,
methods, technologies for managing specific objects to achieve a system-driven set economic results.
The desired result can be achieved by conducting a project on management consulting based on the key
principles of quality management and aimed at meeting the requirements of consumers and the benefits
received by the client organization and consultant.

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