| | By Mick James
One of the adages
about consultancy that
has stood the test of
time is that “it’s tough
in the middle”. The
medium-sized consultancy
runs the risk of having
its lunch stolen from
both sides. Either
smaller rivals can
cherry-pick projects and
undercut its rates, or,
if its chosen niche
attains critical mass,
the big boys can swoop
down to collar both
clients and staff with
their marketing muscle
and salary cheque books.
The answer, according
to Dai Bedford, European
executive vice-president
of Capco, is to dig deep
and build an impregnable
position based on
content knowledge and
thought leadership. This
is what Capco, “the
capital markets
company”, has been
trying to do ever since
its inception in 1998.
“When we started,
capital markets was an
industry in transition,”
he says. “There was
no-one who was serving
that market – it was
dominated by the big
systems integrators but
no-one was really in the
core operating model.”
Capco came out with a
clear vision of the | |
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| | also broadened its
offer, moving into
private client and asset
management work and more
recently into
reinsurance. However,
its point of view – that
financial clients need
to compete at the level
of operating model, has,
in Bedford’s opinion,
been vindicated.
“The internet bubble
disturbed the natural
evolution of the
industry and the
creation of processes
and utilities,” he says.
“I did projects in the
1990s with clients who
assumed the rate of
innovation products and
services would slow
down, but in fact it has
accelerated.”
The result is an
industry in desperate
need of operating models
which can enable it to
segment customers and
switch products and
services accordingly.
Capco has
conceptualised this
approach as “The Finance
Factory”, the
application of
manufacturing principles
to financial products
and, through the
Institute, has brought
together leading-edge
academic thought and
practice. This is what
Bedford believes gives | |
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| | Capco the edge over the
big players.
“The question for
clients is do you want
systems integrators and
outsourcers or partners
helping you design the
future?” says Bedford.
“We do tend to run into
the big players but,
where content is the
key, Capco wins every
time.”
Capco balances its
consulting work by
offering managed
services that are both
highly niched and
content specific, such
as managing client
reference data.
“This creates a high
barrier to entry, as we
combine the specialisms
of specific industry
expertise with the
operations management
expertise,” says
Bedford.
Capco regularly moves
its staff between
managed services and
consultancy work.
Generally, it takes
staff equally from
consultancy and
industry, but always
recruits people with
financial services
experience. Apart from
high-level recruits to
spearhead its drive into
new areas such as retail
banking and reinsurance,
all Capco’s UK partners | |
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| | have been internally
promoted.
“The more senior
people are, the more
difficult it is to find
the Capco profile,” says
Bedford. “Our model of
success is to grow your
own, we recruit at the
lower end of the pyramid
and promote from
within.”
The result is a very
stable workforce.
“It’s very rare for
someone to leave Capco
to go to another
consultancy, they tend
to go back into the
industry,” says Bedford.
“It’s the classic
consultancy profile,
people either leave at
three years or after
five or six, either
because they’ve got what
they wanted or because
they don’t like the
lifestyle. After that
they last for ever.”
Will Capco last for
ever?
“It’s an interesting
question. How do you
survive as a
medium-sized
consultancy?” says
Bedford. “We like to
play on the edge of what
the industry is thinking
– that’s our proposition
to clients – that we’re
at that edge.” | |
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| | future structure of the
industry, which stood it
in good stead during the
tough times which
followed.
“We survived where
others disappeared
because of our closeness
to industry and our
content focus,” says
Bedford. This focus is
expressed through the
Capco Institute, a
think-tank which brings
together the views of
academic and
professional experts in
finance and publishes
them in the Capco
Journal.
“It’s our R&D, it’s
the one thing that never
got cut in all the hard
times,” says Dai. “We
might travel by Easyjet
but we would never lose
the Institute, it’s our
lifeblood, it’s what we
are.”
During the difficult
post-dotcom boom,
post-9/11 period, Capco | |
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