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Consultants prepare to face new challenges and exploit new opportunities
 
 200+ senior consulting
professionals are
expected at the
Annual Consultants’
Forum this September,
where discussions will
undoubtedly focus on two
key issues.
   New opportunities
emerging in the sector
are always a hot topic –
with challenges facing
the firms never far
behind.
   With this Management
Consultancies
Association event nearly
upon us, it's intriguing
to think back to the
issues that were
troubling the industry a
couple of years ago and
contrast them with the
hot topics we’re likely
to see discussed this
year. This puts into
sharp contrast the
transformation that
we’ve seen within the
sector in recent years,
whilst also highlighting
some enduring problems
that continue to trouble
partners at all the top
firms:
  
   Then: The lack of
an obvious growth driver
for the consulting
industry was a major		 
  
   
 
 
 
 
 
 
 
 
 is no longer a
challenge, but firms are
winning projects with
slimmer profit margins
and so are having to
adapt in order to
restore profitability
levels. Most notably
this is being achieved
through the offshoring
of many aspects of the
consultancy value chain
– with major firms
establishing operations
in the likes of India
and China that then
service the needs of the
global business.
  
   Then: It was felt
that we were witnessing
an increasing
sophistication of
clients and a growing
expectation that
consultancies should be
prepared to embark on
projects on a
risk-sharing basis.
  
   Now: Risk-sharing
projects have become
quite established in the
public sector, for major
undertakings such as the
NHS’s NPfIT programme.
But elsewhere – for the
majority of small and
mid-size assignments –
risk-sharing is still		 
 seen as something that
is incredibly difficult
to incorporate into
contracts and so the
procurement department’s
focus has remained on
negotiating down
day-rates rather than
insisting on
risk-sharing.
  
   Then: Resourcing
needs were being plugged
through an acceleration
in the use of associates
and contract
consultants. Firms
wanted to fulfil client
requirements without
leaving themselves
exposed to a possible
downturn in demand
through over-zealous
hiring of permanent
staff.
  
   Now: Demand
growth has been
sustained for so long
that recruiting
permanent staff is now
firms’ number one
strategic priority. A
war for talent is very
much back and firms are
turning to contractors
and associate staff out
of desperation rather
than as a strategic
staffing decision. 		 
   
   Then: What would
be the impact of the new
Indian powerhouses and
would they seek to build
up any kind of local
presence in the core UK
and US marketplaces?
  
   Now: The Indian
powerhouses are growing
their UK and US
presences very
aggressively – at the
same time as the Big
Four are re-entering the
consulting marketplace
in a determined fashion.
The implications for fee
rates, recruitment and
client retention rates
are all big talking
points.
  
   It’ll be intriguing
to see which of these
topics generates the
most interest at this
year’s event – and
indeed to look back on
these talking points a
couple of years from now
and see if they’ve once
again evolved into new
concerns and
challenges.
  
   		 
 concern, with no
significant
technological
developments expected
that might fuel growth
in the years to come.
  
   Now: Still no one
obvious stimulus to
growth (apart from the
2012 Olympic work) but
instead the combination
of reviving private
sector fortunes and the
ongoing desire to push
through public sector
improvement initiatives
is creating a wave of
demand for consulting
services.
  
   Then: A genuine
belief that firms would
have to adapt their
business models and
adopt innovative pricing
models in order to
improve profitability in
the face of slow growth.
  
   Now: Slow growth		 
 
MCG bids £81m for France’s largest management consultancy
 
 UK-based Management
Consulting Group plc
(MCG) is making its
largest acquisition to
date after announcing
its intention to buy
French firm Ineum in an
£81m deal designed to
boost MCG’s business in
mainland Europe.
   Ineum will continue
to trade under its
current name, adding a
third leg to MCG’s
present consulting arms,
Proudfoot Consulting,
which specialises in
operational improvement,		 
  
   
 
 
 
 
 
 executive Didier Taupin,
who has been president
of Ineum since its
foundation in 2003.
Current chief executive
Rick Fumo will
relinquish his role but
continue to work with
specific clients, and
will act as chairman of
the advisers to Parson
Consulting.
   Ineum is the largest
independent management
consultancy practice in
France, excluding IT
systems integrators and
outsourcing practices. 		 
    Paris-based Ineum
employs 675 people and
was created out of the
consultancy practice of
Deloitte France in 2003.
Since becoming
independent, Ineum has
developed a reputation
in the French
marketplace for
providing high quality
consulting services.
Ineum serves the vast
majority of major French
companies in the CAC 40,
including BNP Paribas,
EDF, Schneider, Societe
Generale, Veolia and		 
 Vivendi.
   The company provides
services primarily in
France, Belgium and
Luxembourg and reported
gross revenues of €105m
in the year ended last
May. France is the
world's fourth largest
market for management
consultancy services and
is estimated to grow at
7.2% in 2007.
  
   		 
 and Parson Consulting, a
financial management
consultancy.
   However, MCG plans to
merge the financial
management arm of Ineum
with Parson Consulting
because of strong
synergies between the
two businesses. The
enlarged Parson will
operate under new chief		 
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