1. “Strategic management consulting – the A.T. Kearney perspective” Warsaw, May 28, 2001Wyższa Szkoła Przedsiębiorczości i Zarządzania im. Leona Koźmińskiegow 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 workand personal life
- 434U - Vacation buy-back program
- Part-time program
- Concierge services“Work hard; be rewarded well”
Provide appropriate compensationsacknowledges the demands of thebusiness
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-businessdelivery 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 compensationBusinessPlanLaunch
GrowthIPO/ 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