Tag: Consulting

Investment Banking vs Consulting – A Student Perspective

by Fiona Tang, WH MBA ’17 and Wharton Graduate Assistant

Investment Banking vs. Consulting – A Student Perspective
 By: Fiona Tang

Investment banking and consulting are usually popular career choices after graduation because of their great training programs, brand names and wide range of exit opportunities. Having been fortunate enough to work at both McKinsey and Goldman Sachs, I would like to share some pros and cons of each industry from my perspective.

Compensation: Banking tends to be more lucrative

Base salaries are similar in banking and consulting, but the bonus varies significantly for each industry. In banking, the bonus received may be valued as much as 12 or 24 months of your base salary while in consulting the maximum bonus is probably 6 months of salary. There is generally a 20% – 40% pay difference between banking and consulting at all position levels. Exit opportunities are also more lucrative after banking positions compared to consulting roles.  Private equity and investment management positions pay a lot more than strategy roles in big corporations. If compensation is an important role in your decision making, banking might be a better option.

Job Security: Consulting is more secure

Job security in consulting is much less cyclical than banking. Regardless of good economic times or bad economic times, consulting firms continue hiring and minimize layoffs of junior staff. Investment banks, on the other hand, layoff more workers and enact hiring freezes during financial downturns. For example, this summer after I left Goldman Sachs, the Hong Kong office laid off 20 analysts and associates because the market isn’t doing well now.

Work Lifestyle: Unpredictable hours vs. Traveling

If you are looking for a 40 hour per week job, neither consulting or banking is ideal for you. The hours are LONG, generally 70-100 hours per week depending on your project or deal.  As you become more senior and gain more work experience, the hours can be shorter. But my manager at McKinsey and VP at Goldman both still send emails to their teams at 2am on occasion – the nature of the work illustrates banking and consulting will never be nine-to-five jobs.

The big difference is that consulting is intense during the week but in general doesn’t require you to work on the weekends. The hours are more predictable as you will be working on one specific project and it’s easier to manage and plan ahead.  The downside to consulting is endless traveling from Monday to Thursday. Trust me, waking up at 5am to catch a 7am flight to the client site on Monday is not fun.

Banking requires much less travel at junior level. However, the hours are less predictable as you don’t know when a deal will intensify or a pitch suddenly becomes live. As an analyst, you will be staffed on multiple deals and it’s difficult to predict your work hours or make plans in advance. During a live deal, working on the weekends is considered pretty normal.

Daily Work: PowerPoint or Excel?

Both bankers and consultants spend the majority of their time on Excel and PowerPoint. The key difference in banking is a focus on finance specifically and financial modeling in general. Junior bankers devote their time to studying the value of a company and its capital structure; junior consultants think about the strategy of a company and its organizational structure.

The life of a consultant is interesting because of the broad range of projects managed by a range of different partners. Every project and every client is different and the learning curve is quite steep in the first couple of years. However, sometimes I do struggle with limited opportunities to put ideas into practice – like junior bankers who put together endless pitch books for M&A deals that never happen.

Junior bankers’ work in some way is more process-driven.  During the first six months, you will generally have a steep learning curve. But afterwards, IPOs, pitch books and M&A transactions will have a standard process with a different twist for each deal. If you are passionate about finance, you might like it. Otherwise, the daily work can become a little repetitive. That being said, the training and deal exposure are definitely invaluable assets for your future recruiting. 

In terms of work culture, banking tends to be more tough. Bankers are not bad people – the nature of the work can simply be grueling though. A banker is usually staffed with a couple of deals simultaneously and when things become more active, it’s difficult for him or her to be patient when a junior banker asks certain questions.  You may feel “on edge” awaiting new work assignments that may come at any time which may result in having to pull an all-nighter again. Consultants are generally only staffed on one project at a time, which makes it a lot easier to manage the workload and plan ahead of time. Hence, in consulting, managers have more time to focus on individual team members’ development, team bonding events, etc.


Future Job Prospects:

Banking and consulting do have somewhat different exit opportunities and career trajectories. Most of my consulting friends shift to startups, private equity, corporate strategy, or technology after 2 years while my banking friends go to startups, private equity, investment management, technology or corporate M&A.  There is definitely some overlap given that the skillsets from banking and consulting are somewhat similar with a different focus. Consulting provides more training on strategy and big-picture thinking, which companies with corporate strategy roles or private equity operation roles might find very attractive. On the other hand, banking provides robust financial training and most finance-related jobs such as private equity and investment management find banking analysts good hires.

When choosing between consulting and banking, I would encourage you to think about where you see yourself in 2 years. If you know that you want to be in the finance world and work for a big private equity / hedge fund, banking would generally provide a better foundation.  If you would like a role as senior management of a Fortune 500 company or managing a startup, consulting might provide more fundamental training.  However, I definitely see some consultants switch to finance and bankers switch to strategy.  You are not restricted if you choose one option or the other. What I share above is merely general guidance on the skillsets you would gain after 2 years and what companies are looking for from ex-bankers and ex-consultants.

Banking and consulting both provide excellent training and you will be working with talented and driven individuals. Whatever you choose, you can have a great career and I hope this provides general insight for the lifestyle of banking compared to consulting.

 

A Day in the Life: Marketing Research or Consulting? Blurred Lines…

by Dina Liu, WH ’12

I read an interesting article this morning on my train ride to Kraft in Northfield, Illinois, about the rise of agency-bred & raised consulting shops.  These “sexy” agencies are starting to realize that their advertiser clients are demanding more insights, more analytic prowess, and most importantly, more actionable recommendations for what to do in-market.  From trying to stem the hemorrhaging of lost market share to re-positioning an old network as the new Hispanic Millennial destination, these agencies’ clients are demanding more.  Interestingly enough, while the world of agencies is still playing catch-up and starting to understand that it’s not sufficient to just be a “media shop” or a “creative shop,” Nielsen has carved a spot out for itself that is now ingrained in our clients’ business models.  And this is why I’m making the claim (you heard it here first!) that marketing research has replaced traditional consulting.  Gone are the days where your “research vendor” sat in the corner and only serviced you when you had a problem that required immense data crunching.  Now?  Now we sit with our clients, have dedicated consultative teams that align to our clients’ business groups, and provide the ammunition they need to make real-time decisions that make the most impact on top-line revenue and bottom-line margins.  Nielsen is the foremost leader in this area of consultative insights provider.  It’s not enough for me to tout my company’s credentials in this guest blog & claim that I’ve got one of the coolest jobs ever.  Here’s a short story on what happened not a few months ago:

nielsenI did a tour of duty through product marketing for a digital ad effectiveness product called Nielsen Online Campaign Ratings (OCR for short).   Nielsen’s focus on digital advertising has sharpened over the last five years, as the industry continues to see TV dollars migrating across screen to Digital and Mobile.  Not only did I get the opportunity to understand the depth and chaos that is digital advertising in this day & age, but I got to be part of an incredible product leadership team that created this product, from concept & ideation to full-scale production & commercial release.  OCR is now one of, if not THE, accepted currency on which digital advertising will be traded on, similar to how the Nielsen TV Ratings serve as the foundation for the television advertising world.  Nielsen’s focus didn’t stop there.  Domestic?  Sure, we’ve got the US market…but what about our clients who span multiple countries and continents?  One of my major projects was the preparation for the commercial launch of OCR in the French market- a European country whose privacy restrictions are notorious in technology/telecom.  Working hand-in-hand with our incredible team of engineers around the globe, our own data provider partners, and our client service and sales teams, I got incredibly close to this product and was sent to Paris by Nielsen to train the local Nielsen team and host a client roadshow across the biggest publishers, advertisers, and agencies in France.  Never thought two years ago, that here I’d be in Paris presenting to the directors of digital strategy for Starcom Media Group, Carat, Havas, Microsoft, L’Oreal, and Yahoo on why OCR will revolutionize digital advertising as we know it.

Long story short: Nielsen as a company embodies this incredible transformation we are seeing in how clients use big data and their consultative partners.  We are no longer just a “data provider” or a “research vendor.”  To sit on our laurels & accept those descriptors doesn’t do Nielsen justice.  The culture, the mentality, and the senior leadership continuously push us to be THE solution to our clients’ problems.  Spread sheets and number crunching?  They’re most likely here to stay, but at least we can say that this is no longer the ONLY thing marketing research can provide.

Dina Liu graduated in May 2012, from Wharton with double concentrations in Marketing and Management.  Primary extracurricular activities: President of Penn Mock Trial and member of Sigma Kappa, worked at the Penn Housing Office 3 out of 4 years.  Junior summer, interned at Blackrock supporting their retail Defined Contribution business in their marketing and sales department.  Currently working at the Nielsen Company as an Associate Media Analytics Consultant servicing the Viacom and Discovery Communications accounts in our Watch business.  Live in Manhattan, have 2 goldfish, and enjoy foodie dates around the five boroughs. 

How Penn Prepared Me for Life at IBM

by Miriam, CAS ’11

Graduating from Penn, I was sure that postgraduate life at IBM would greatly differ than my college life. While I was not flying on planes twice a week and accumulating hotel points at Penn, many aspects of my daily life at Penn helped to prepare me for IBM.

Work Hard, Play Hard
First, the “work hard play hard” Penn motto is definitely applicable to IBM. Consultants’ lives are often dependent on client demands which can mean long hours of hard work.  As Penn students, we are required to develop time management and multitasking skills. These abilities will help you manage the sometimes hectic consulting environment. While the work is demanding, the IBM culture also encourages a positive lifestyle. My team achieves this through arranging team outings ranging from dinners, to baseball games, to excursions to Cirque Du Soleil. I found Penn prepared me to be concentrated and serious when the situation called for it, and to be appropriately relaxed during social events which allows for team bonding and relationship building. This is an important aspect in building your network, and finding mentors throughout your time at IBM.

Prepared for the Unpredictable
Additionally, Penn helps to prepare you for the Consulting by Degrees (CBD) program by placing you in an atmosphere that is not always predictable. Going into a new course, you have to be willing to adapt to the teacher’s methodology, and you will similarly work to complement your project manager and team’s working style. Each professor expects you to quickly adapt to the working environment, and pick up on new skills at a rapid pace. Additionally, within every course, you are required to utilize several skills such as researching and synthesizing information and producing a work product from your analysis. These capabilities are critical in consulting. Most importantly, Penn provides you with the confidence that you have the intelligence and ability to gain skills that will allow you to develop a structured solution for a complex business problem.

How to Stand Out
While Penn provides you with an excellent background for the CBD program, there are several things you can do to stand out as a candidate. First, speak to as many IBM consultants as possible. The more you learn, the better you will know if IBM is a good fit for you. Second, practice case studies with your friends and Career Services. Excelling in the case is a great way to show that you can approach complex problems in a structured, logical manner. Third, IBM is a company that thrives on strong leadership and collaboration, so it is very important that you can demonstrate your leadership abilities. Finally, in the interview relax and be yourself, you want the interviewer to want you on their next project!

Day in the Life: Consulting

@PennCareerDay is back! We’re excited to feature our award-winning, Day in the Life program for the third year on Twitter.

Ever wonder, what is it really like in consulting? What can I expect? What skills should I have and highlight to break into this field? Well, our first @PennCareerDay contributor, Shahbaz Alam, addressed those questions and more on Thursday, September 13th. To learn more about Shahbaz, read his bio below. To read his tweets, check them out on our Storify account.

Shahbaz Alam is a Manager in PwC’s Advisory (Consulting) practice focusing on helping companies improve their technology and operations.  Shahbaz’s projects spanned from designing, architecting and implementing large scale technology solutions to helping companies redesign their business processes to assisting companies develop forward looking strategies on how to meet the demands of their changing business and/or regulatory environment.

Shahbaz graduated from Penn in 2007 (and recently attended his 5-year reunion) with a concentration in Operations and Information Manage (OPIM).  While at Penn, Shahbaz was an RA for Harrison College House, a Freshman Experience Coordinator for Harrison, PHINS, Wharton Ambassador, College House Alumni Ambassador and worked for the School of Medicine.

Over the last 5 years with PwC, Shahbaz traveled throughout the US to places such as Arkansas, Ohio, Tennessee, Chicago, Orlando, DC, San Francisco and the world (Canada, Mexico, Uruguay, the Netherlands).  You can see Shahbaz during his multiple visits to Philly and Penn throughout the school year both in his role as the co-lead for PwC’s Advisory undergraduate recruiting for Penn and as an active alumnus.

In his spare time, Shahbaz enjoys catering to his wanderlust by jet-setting around the world (and calculating how to maximize the miles and points he earns from airlines and hotels), running, finding and eating at new restaurants (especially hole-in-the-walls) and nerding about by reading the NY Times.

Day in the Life: Business Intelligence Consulting

What does Business Intelligence Consulting have to do with technology? And, what is it exactly?  We’re excited to welcome alum, Corey Hulse, to @PennCareerDay on Friday, March 30th.  Corey will talk about this unique career path that combines technology and business development in the consulting arena. To learn more about Corey, read below and follow him on the 30th!

Corey Hulse graduated from Penn in 2007.  He concentrated in Operations Information Management (OPIM) and Legal Studies (LGST) at Wharton.  During OCR his senior year, he was fortunate to find a job as a Consultant with Thorogood Associates, a Business Intelligence consulting firm, and has been with the firm for just about five years.

Thorogood’s clients are large multi-national enterprise organizations that have large amounts of data, and they work with them to implement solutions that allow them to make faster, more informed, and better business decisions.  The company will work with the client to figure out what’s best to address their challenges, and implement solutions using technologies from Microsoft, SAP, IBM, Oracle, QlikView, and Tableau.

During his time at Thorogood, Corey’s worked with retail clients like Chanel and multiple different clients from the Consumer Packaged Goods sector.  He’s been able to learn about, work with, and build solutions for multiple different business areas like finance, logistics, human resources, and factory production.  He’s also been able to travel to the company headquarters in London on multiple occasions for both client work and to contribute to internal company initiatives.

When he’s not working, Corey enjoys photography, board games, and spending way too much playing in Excel.  He’s developed a passion for interesting graphs and visualizations, and blogs for both GraphGraph.com and Geekadelphia.com.