| | By Mick James
It looks like 2007 is
going to be a year of
acquisitions in the
consultancy business. On
the one hand the options
for organic growth are
narrowing as the supply
of experienced staff
dries up. On the other
hand there are now a
number of smaller
consultancies who are
nearing the end of their
initial growth curve and
are ripe for
acquisition.
Add to this the
number of new entrants
and re-entrants jostling
to achieve critical mass
and you have a scenario
that is full of
possibilities.
A perfect
illustration of this is
Hitachi Consulting's
recent acquisition of
Impact Plus (for an
undisclosed sum).
Hitachi is a huge global
brand but a relatively
recent force in
consulting with only 20
consultants in the UK.
Impact Plus is a
well-established UK
brand, used to punching
above its weight but
beginning to hit a glass
ceiling in terms of
growth.
"You can see this as
us joining a massive
conglomerate or a small | |
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| | ex-Andersen consultants.
"That was significant
for us as it took us to
around 400 people in the
US and put us into
'fast-forward' mode,"
says European chief
operating officer Jim
Schuchard, also
ex-Andersen. "We're not
trying to replicate
Andersen Business
Consulting, but we did
take on that flavour and
style."
Hitachi now has
nearly 1,300 consultants
in the US and has a
five-year plan to expand
into Europe by sending
out a nucleus of
experienced staff and
supplementing them with
selective acquisitions.
"This is our first
acquisition in Europe,"
says Schuchard. "We were
the ones that sought
them out, we looked at
various alternatives but
Impact Plus stood out:
the solutions were
complementary; the
cultures were very
closely aligned."
As well as doubling
Hitachi's headcount in
Europe, Impact Plus
brings with it a strong
presence in both
financial services and
the public sector.
"We're not trying to
build the largest
consultancy in the world | |
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| | but a highly recognised
and respected one based
on mutual, long-term
relationships with
clients," says
Schuchard.
With a goal of 500
consultants in Europe by
2010, the acquisition is
very much seen as a
platform for growth as
Hitachi expands to
support global clients.
"When we announced it
to staff the buzz round
the office was immense:
people were talking
about how their career
had been re-launched,"
says Bailey of Impact
Plus. "There are now
more career options for
people in the States and
in Europe – we've
already had one person
ask if they can go to
Spain."
The acquisition also
solves the problem that
faces many growing
consultancies – do they
keep trying to stretch
their internal systems,
or do they invest in new
levels of support that
will not be viable until
they are much larger?
"If you look at
systems, there's no way
we would have gone out
and bought Hitachi's
systems – we couldn't
have afforded them,"
says Bailey. "Now it's
just a few more log-ons | |
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| | to a system in the
States. We're not
getting swallowed up,
but we do have that
brand and financial
support. There's much
more flexibility about
benefits, for example
–Hitachi has tremendous
buying power."
The immediate focus
of the new UK entity, of
which Bailey becomes
vice-president, industry
and markets, is
recruitment.
"We've already
integrated the
management structures,
so there's nothing
stopping us from getting
on and doing it as one
business," he says. "The
first thing you look at
when you put two
businesses together is,
where's the pipeline?
We're already sold out
so we'd better get
recruiting."
Bailey's goal is to
add 25 people in the UK
by the end of 2007.
"We don't expect
there to be an issue
with attracting staff,"
says Bailey. "You can
join one of the big
firms and get swallowed
up, but here there are
so many career options
that are open to you."
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