• 1. “Strategic management consulting – the A.T. Kearney perspective” Warsaw, May 28, 2001Wyższa Szkoła Przedsiębiorczości i Zarządzania im. Leona Koźmińskiego w WarszawiePresentationan EDS company
    • 2. Agenda Overview of management consulting A.T. Kearney as a strategic management consulting firm Consultant’s role in A.T. Kearney The future of management consulting
    • 3. Overview of management consulting
    • 4. Today, one is confronted with a variety of consultants . . . . Tax “consultants” Hair “consultants” Image “consultants” Color “consultants” Catering “consultants”What then, is “management consulting?Overview of management consulting
    • 5. One definition . . . .Management consulting = assisting management in facilitating change to gain and sustain competitive advantageOverview of management consulting
    • 6. Companies engage management consultants for several reasons — some good, some not so good Some reasons why companies hire consultants The company does not have the necessary skills internally - Good reason The company has never confronted this situation before - Good reason Management needs fresh ideas and a new perspective - Good reason Management wants the consultant to confirm its ideas - Not-so-good reason Everyone in the company is too busy - Not-so-good reason Management needs a “tie breaker” - Not-so-good reason Overview of management consulting
    • 7. Why does management consulting seem to be growing in importance? The nature of business is changing so rapidly that companies Cannot provide for every eventuality in the organizational structure Find it difficult to maintain permanent staff functions Companies need “tailored” solutions to remain competitive in an increasingly global marketplace The high cost of what management consulting provides can only be justified by companies on an outsourced, as needed basis Overview of management consulting
    • 8. Why does there continue to be a demand for management consulting? Most companies do not know how to Analyze „themselves” in an objective way when business situations change significantly Operate in a temporary, project mode Unfortunately, most business schools do not Prepare managers for “exceptions” in business situations Teach real project managementOverview of management consulting
    • 9. Information technologyOperationsStrategySystem strategy creation Information systems market analysis Selecting appropriate IT solutions Inplementation of selected IT solutionsProcess optimalization Change management Business process reengineering Strategic sourcing Supply chain management Service level improvement Benchmarking Organization restructuringCorporate strategy Strategic business units e-business strategy Production strategy Distribution strategy Market entry strategy RestructuringThe major global management consulting firms concentrate in three areas of consulting; A.T. Kearney, together with EDS, cover the whole spectrumMcKinseyMonitor, BCG, BainBooz AllenAccentureCSC IndexIBM ConsultingA.T. Kearney (EDS)“Big Five” firmsOverview of management consulting
    • 10. Consulting Industry Market Size and Growth RatesMarket Size ($ B)Per Annum Growth Rate (%)Source: The Global Consulting Marketplace: Key Data, Forecasts & Trends 2000 Edition, Kennedy Information Research Group. Chart pertains to the market for consulting firms independent of hardware/software organizationsIT projects to represent over 50 percent of the market The world consulting market is estimated at $ 117 billion and is characterized by a double-digit annual growth.Overview of management consulting
    • 11. The consulting services in Poland emerged after the transformation in 1989 with privatization; other segments of the market developed later198919901991199219931994199519961997199819992000Development of the consulting market in PolandPrivatization consultingAudit and legal servicesIT consultingHigh value added consultingStart of the economic transformationOverview of management consulting
    • 12. The development stages in Poland were significantly different than in Western Europe Source : A.T. Kearney1998 - 20001994 - 19971990 - 1993External trendsStart of economic transformation Privatization of state own enterprisesFast growth of the economy Development of the free market institutions (e.g. stock exchange) Acquisitions by foreign investorsConsolidation of the economy Increased competitive preasure Acquisitions and post merger integrations Big ticket privatizationsConsultants’ value propositionPrivatization Financial valuationPrivatization/Due Dilligence IT consulting RestructuringEfficiency improvement Reorganization/Reengineering Strategy IT consultingKey playersSmall Polish companies Smaller foreign companies specialized in financial / privatization consultingBig five Specialized Polish companies Big five A.T. Kearney McKinsey BCG, ...Key factors for successRelationships PricesLocal knowledge Quality standardsValue added Global network RelationshipMajor client groupState administration Largest Polish state-owned enterprisesForeign investors Foreign investors Largest Polish, privately owned corporations Overview of management consulting
    • 13. The consulting market in Poland is still significantly different than in other countries DifferencesDriversLow sophistication of the market. Many potential clients do not recognize the need for consulting services Brand names of global players not known Consulting fees relatively higher in relation to personal costs Two groups of clients: International companies entering Poland Largest Polish companies of which many are state owned Local shortage of consulting and industry knowledge and experienceMarket dominated by financial and tax advisory Local consultancies enjoy important market position in Poland Different product offerings and selling strategies for domestic and for international clients Need to transfer knowledge and experience from developed markets Overview of management consulting
    • 14. Consulting market in Poland is still dominated by financial and tax advisory services Percentage of companies using different consulting servicesSource : BOSS-GospodarkaFinancial and tax advisoryQuality management Business strategy Human resources Public relations Other Do not use consulting servicesOverview of management consulting
    • 15. In parallel to world-wide brands, local consultancies enjoy important market position in PolandPolish subsidiaries of global consultanciesDominant strategies: Focus on long-term relationship with client Focus on several key products / industries Key success factors Global network Combination of industry and local knowledge Tangible results Targeted client segment International companies Largest Polish corporations from strategic industries Products Value added projects Dominant strategies Niche players Specialization in one product / industry Key success factors Price Personal relationships Targeted client segment Small and medium enterprises State and local governments Products Off-the-shelf reports Company valuations Issuing prospectuses Feasibility studiesLocal companiesOverview of management consulting
    • 16. Clients can be split into two groups having different expectations regarding consulting services International clients Local clientsProducts Market entry strategies Distribution strategies Post merger integration of acquired local companies Efficiency improvement in acquired companies Projects sold mostly outside Poland (at the HQ level) Co-operation characteristics Used to work with consultants Used to consulting fees Expect involvement of own staff Value added driven Products Strategy development Marketing strategies Restructuring Cost reduction IT systems Projects sold in Poland Co-operation characteristics Used to work with consultants Used to consulting fees Expect consultants to do “everything” Price drivenOverview of management consulting
    • 17. Global high-value-added consulting companies will have an advantage over local consulting companies because global companies - Can leverage worldwide intellectual capital and experience - Still have necessary local capabilitiesGlobal capabilities and supportOn-line access to intellectual capital, data bases, benchmarks Training and global project experience for local consultantsOverview of management consulting
    • 18. A.T. Kearney as a strategic management consulting firm
    • 19. Founded in 1926 International scope 65 offices in 34 countries Over 3000 consultants Since 1996, A.T. Kearney is the second largest strategic management consulting firm in the world Over 3000 projects engagements per year 1,4 bln USD turnover in 2001 Since 1995, A.T. Kearney is part of EDS, the international leader in technology information 80% of work for repeat clients Average consultant work experience: 17 years TokyoChicagoNew YorkMadridLondonDüsseldorfMilanAmsterdamBrusselsMunichStuttgartBeijingSingaporeStockholmOsloCopenhagenHong KongSan FranciscoLos AngelesDallasPhoenixAtlantaMexicoSao PauloMelbourneSydneyBerlinTorontoBostonClevelandWashingtonParisA.T. Kearney is one of the leading high-value-added strategic management consulting firms in the worldWarsawPragueA.T. Kearney as a strategic management consulting firm
    • 20. A.T. Kearney is one of the few high-value-added management consulting firms which possesses the full range of consulting servicesComplete set of consulting skillsBusiness and marketing strategyPost merger integrationStrategy sourcingTransforming the enterpriseRestructuringTechnology managementPhysical distribution & logisticsOperations redesign – Process & structureChange managementMulti-functional bemchmarkingA.T. Kearney as a strategic management consulting firmCore competencies
    • 21. Sample of Recent ClientsRepresentative Annual Results AchievedAmeritech Anglian BT Carrefour Casino Euro Disney Galeries Lafayette General Motors House of Fraser Johnson & Johnson Keebler Kellogg Metro Monoprix Nabisco Nomura PepsiCo Promodes Prudential Quelle Sears Shell Sprint Unilever Wal-mart“A.T. Kearney has helped enormously to address our key issues… We have planned and implemented cost reduction programs that will return over half a billion dollars” Fred Smith, CEO, Federal Express“…in sharpest contrast… A.T. Kearney consultants helped engineer one of the most stunning corporate turnarounds in recent memory” (Excerpt about Sears success working with A.T. Kearney, review of Dangerous Company in Fortune, August 18, 1997)“The Kearney work has made us radically re-think our approach to the business. We wouldn’t have done that otherwise” Marks & Spencer Supplier“A.T. Kearney is really the father of our global purchasing system.” “They are our achievement consultants” Jack Smith, CEO, GM“We wanted consultants who wouldn’t just give us advice and walk away” John Rose, CEO, Rolls-RoyceFederal Express >$500 MillionSears >$750 MillionRolls-Royce $750 millionMarks & Spencer $250 millionGeneral Motors >$3.5 BillionA.T. Kearney is committed to delivering tangible and measurable “bottom-line” results for our clientsA.T. Kearney as a strategic management consulting firm
    • 22. Source: Louis Harris Survey, 1998A.T. Kearney is the global leader in client satisfactionA.T. Kearney as a strategic management consulting firm
    • 23. A.T. Kearney is a leader in the field of Integrated Supply Chain ManagementDelivered keynote address at the 1999 NRF annual conference on and leadership practices in driving success through consumer-focused supply chains Co-sponsored Asia LOGICON conference for senior logistics professionals (1999) Addressed supply chain strategies and overcoming logistics obstacles for the Asia-Pacific region Presented research findings on issues, bottlenecks and IT-related concerns of the Asian supply chain Featured presenter for the Council of Logistics Management: “Why Effective Partnerships Require a Clear Supply Chain Strategy” Delivered keynote address at 1999 Strategic Electronic Commerce Conference, an EDS-sponsored conference Featured speaker at AsiaPorts 1998 conference - “How Shifting Global Sourcing Patterns Are Impacting Port Operations” Hosted CEO Forum on “Challenges in the Digital Future in the 21st Century”, with topics including digital supply chain opportunities and digital demand management Sponsoring future supply chain industry seminars: "Global Excellence in Operations" with Fortune (2000) "2000 Supply Chain Management Conference” (2000) A.T.Kearney/European Logistics Association: "Insight to Impact. Results of the Fourth Quinquennial European Logistics Study 1999“ White papers and research studies A.T. Kearney has been cited in several articles on supply chain management Leadership Past President of Council of Logistics Management Past President of Canadian Association of Logistics Management Seminars, Research and LeadershipSelected ExamplesA.T. Kearney as a strategic management consulting firm
    • 24. A.T. Kearney facilitates new thinking on the future of the Retail/Consumer Products industry through several forumsThought LeadershipLead the EDS/GMA Future Forces Roundtable, held annually Bring together the CEO’s and Presidents of the leading grocery manufacturers and retailers Facilitate discussions on future of technology and science Help to bring together new ‘breakthrough’ thinking e.g. UCCNet was formed based on the actions set out in the 1998 Future Forces meeting. A.T. Kearney is active with the World Economic Forum on several levels A.T. Kearney leads the Food and Beverage Governor's Meetings in Davos Switzerland as part of the World Economic Forums annual meeting Publishes annual white papers on advanced topics of interest to food and beverage executives as part of the World Economic Forum proceedings A.T. Kearney participates with Grocery Manufacturers of America on several fronts Facilitate Top-to-Top meetings at the annual Greenbrier CEO Conference (1999, 2001) Master of Ceremonies at the annual Information Systems, Logistics and Distribution conference (1997, 2001) Facilitate key issues forums with executive members (Presidents meeting (2000), Board of Directors (1999,2000) World Economic ForumSelected ExamplesA.T. Kearney as a strategic management consulting firm
    • 25. Assessed Delphi Automotive in implementing a “value capture” program for all modules of SAP/R3, for 50 sites throughout Europe, identifying over $28MM in incremental savings Aligned business and IT strategies with core processes, and leveraged existing ERP investments to derive additional business value; Leveraged IT assets by establishing IT shared services capabilities Developed a comprehensive E-Business “landscape” and competitive strategy, then assessed and realigned ERP priorities to support global purchase order management and supply-chain strategies Assisted HP in conducting an SAP post-implementation audit, recapturing over $19MM in net savings Identified over $250MM in unrealized business benefits in operations optimization, fleet productivity, staff reduction and sourcing as a result of their SAP implementation Pre-merger assessment including the ERP integration of two global multi-billion dollar organizations and creation of financial and HR shared services organizations; identified $52MM in IT run-rate reductions Restructured and consolidated IT organization to improve efficiency and effectiveness Assisted with functional and operational requirements analysis, ERP program management, global ERP consolidation, and ERP global template design and integration Assisted with global restructuring and consolidation of IT organizations and systems, to improve operational efficiency and effectiveness Reinvented IT organization, processes, and infrastructure as part of post-merger integration with Bank of America Aligned and streamlined business and IT processes and systems; developed an IT architecture “blueprint” for all enterprise applications Restructured business and IT processes for better alignment, and assisted in outsourcing certain IT functions to modernize the IT infrastructure; developed the IT blueprint to leverage ERP systems In addition to a market leading reputation in supply chain, A.T. Kearney has also delivered significant IT enabled transformation initiativesA.T. Kearney as a strategic management consulting firm
    • 26. A.T. Kearney is the recognized European leader in several industriesMajor clients per practiceDeutsche Bank BNL Barclays Societe Generale AXA Financial inst.Rohm&Haas Arjo Wiggins BASF Pechiney BP/AmocoChemicals/O&GFIAT Group VW GM Europe Daimler Chrysler RenaultAutomotiveFrance Telecom Siemens Deutsche Telekom Lucent PhilipsComm/hi-techVEBA/VIAG Drewag Mainova ENEL ENBW/NeckarUtilitiesCarrefour Marks &Spencer Galerie Lafayette Unilever AuchanConsumer/retailRolls Royce plc.AerospaceGambro Quintiles Merck HenkelPharma/healthSAir Group Air France Lufthansa KLM Deutsche BahnTransportationA.T. Kearney as a strategic management consulting firm
    • 27. A.T. Kearney has wide experience in many industry sectors in PolandA.T. Kearney as a strategic management consulting firmAutomotive Energy Chemical Banking Insurance Telecommunications Logistics and distribution Publishing Steel Fast-moving consumer goods Retirement funds Food Mining Shipbuilding Capital markets Media Real estate Government institutions
    • 28. Examples of projects realized by A.T. Kearney in Poland Number one Polish publisherLeading shipping companyMajor Scandinavian bankLeading automotive components manufacturerStrategy MIS Organisational structureGovernmental assistance programme developmentMarket entry strategySAP implementationPublishingTransportationFinancial InstitutionsAutomotiveIndustryClientProjectSelectionMobile telephony providerOperations improvement Business market diagnostics Loyalty programTelecomAlternative fixed line telephony provider Business planning for regional markets Project managementTelecomA.T. Kearney as a strategic management consulting firm
    • 29. Consultant’s role in A.T. Kearney
    • 30. Becoming a good management consultant requires time, experience and certain key skillsBusiness educationBusiness experienceManagement backgroundTechnical backgroundConsulting experienceWritten and oral skillsAnalytical skillsCreative thinkingManagement Consulting CapabilityConsultant’s role in A.T. Kearney
    • 31. Six key rules* must be followed by every good management consultant Know what you’re doing! Don’t act beyond your capabilities Continually add value commensurate with your skill and client expectations Keep to the agreed-upon project scope Hold client information strictly confidential Be ethical at all times*Source: Andrew Thomas Kearney, founder of A.T. KearneyConsultant’s role in A.T. Kearney
    • 32. In addition to “time”, experience and basic skills, the good consultant requires three disciplined core consulting capabilities Proposal writing = selling the assignment Project management = conducting the assignment Report writing = the productConsultant’s role in A.T. Kearney
    • 33. “Feel that I belong and am part of something good” Reliable network of people Appreciation of unique talents Communicate ATK’s direction and strategy to all employees Explaining how to get problems resolved Respect employees by providing timely and intelligent information“Constantly grow, learn and develop” Interesting mix of work Good project experiences Constructive feedback Understanding the measurement process Opportunities to develop Upward feedback initiatives “Be able to balance work and life” Provide a more balanced quality of life Tailor work requirements to individual needs Services to help balance work and personal life - 434U - Vacation buy-back program - Part-time program - Concierge services“Work hard; be rewarded well” Provide appropriate compensations acknowledges the demands of the business Being recognized for outstanding performance Provide input into compensation initiatives Salary increases for mid-year promotions Service incentive programs Principal LTI optionsA.T. Kearney adheres to four key points to hire and retain the best consulting talent WealthGrowthPrideTeamingSource: GPTWConsultant’s role in A.T. Kearney
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    • 35. The future of management consulting
    • 36. The Global Consulting Market by Major RegionNorth AmericaWestern EuropeAsia-PacificLatin AmericaRest of WorldRegion1998 2003 CAGRMarket Size ($ B)CAGR (%)North America and Western Europe are projected to be the leading growth marketsSource: The Global Consulting Marketplace: Key Data, Forecasts & Trends 2000 Edition, Kennedy Information Research Group. Chart pertains to the market for consulting firms independent of hardware/software organizationsThe future of management consulting
    • 37. Global Consulting Market Size and Growth Rates by Vertical Industry ($ Billions)1998 Industry Size201998 – 2003 CAGR15105$5$10$15$20Manufacturing $33.2Financial Services $33.8Government $15.3Communications $19.8Wholesale/ Retail $11.9Healthcare $7.9Energy/Oil and Gas $9.9High Technology $8.0Utilities $7.3Business Services $3.6Transportation $2.5Med./Ent./Pub. $2.9Miscellaneous $2.4Traditional industries will continue to grow . . . .2003 Industry Consulting Market Size Early E-Business AdoptersThe future of management consulting
    • 38. Pure E-Business Start-up e-business Web strategy, design and implementation E-strategy, marketing, operationsType of ServiceBrick and MortarDot.com19982003$63.0$68.019982003$0$20.019982003$63.0$48.019982003$24.0$75.019982003$4.5$19.019982003$19.5$56.019982003$1.5$16.019982003$1.0$11.019982003$0.5$5.0All ClientsE-Business Related Traditional consulting services with e-focusTraditional Consulting Strategy Operations IT Change managementSources: E-commerce Consulting Kennedy; A.T. Kearney analysisBreakdown of Global Consulting Market Segments (U.S.$ Billions)Total Global Consulting Market (U.S.$ Billions)Share of Consulting Market:10%47%43%. . . . but, e-Business will be the main driver of future growthThe future of management consulting
    • 39. Expected Growth in E-Business B2B Services 1999 – 2002 Annual Growth Rate (%)Internet Strategy/ AdviceDigital Value Chain (2) Internet Software and ServicesInternet Outsourcing(1)B2C (Business to Consumer) B2B (Business to Business) Notes: (1) Internet outsourcing includes Internet project management and web-hosting services (2) Digital value chain includes supply chain, ERP, integration, CRM, business intelligence and ASP services Sources: Forrester Research, IDC, A.T. Kearney analysisB2B Is Eclipsing B2C: Expected Growth in E-BusinessRevenue ($ Billions)Higher barriers to entry than B2C More sustainable business modelsThe B2B market appears most attractiveThe future of management consulting
    • 40. Client-Market Positioning MatrixPure E-BusinessE-Business RelatedTraditionalServicesBrick & Mortar (incl. Dot Corp’s)Dot.com’sClientsTherefore, the new Economy requires a new positioning and new innovative client-service relationships Traditional Client BaseManagement ConsultantsNew Client BaseVenture Capitalist / Incubators„New Economy Consultants“The future of management consulting
    • 41. End-to-end e-services will have a competitive advantage over functional specialistsParadigm shift in IT -services provisionPlanTraditional IT-services delivery chaine-business delivery chainImplementBuildVisionThe future of management consulting
    • 42. So, A.T.Kearney and e-solutions are implementing the e-business solutions for start-ups and established clients to provide truly end-to-end capabilities A.T. Kearney together with e.solutions is enabling the enterprise to offer end-to-end e-business solutions - from strategy to implementation EDS e.solutions/Kearney Interactive need to have a broad range of design and implementation services - including branding/marketing, web design and e-solution implementation StategyOperationsImplemen- tationWeb-DesignE-Business SolutionEnd-to-End Solution ProcessEDS e.solutions/ Kearney InteractiveA.T. Kearneye-Space (incubator) E-Business Practice Marketing The future of management consulting
    • 43. A.T.Kearney offers comprehensive support to start-ups and new ventures.Comprehensive strategic and operational supportDedicated teamLong-term commitment and flexible compensationBusiness PlanLaunch Growth IPO/ Sale…A.T. Kearney Start-up Service PracticeSharesOthers$A.T. Kearney Start-up Network+Source: A.T. Kearney Start-upA.T. Kearney New VenturesSupport through all business phasesThe future of management consulting
    • 44. Questions & Answersan EDS company