SPECIALITIES OF MANAGEMENT CONSULTING IN NEWLY JOINED AND CANDIDATE COUNTRIES
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SPECIALITIES OF MANAGEMENT CONSULTING
IN NEWLY JOINED AND CANDIDATE COUNTRIES
by Janko ARAH
BUDAPEST, NOVEMBER 9th, 2006
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Newly Joined and Candidate CountriesNewly Joined Countries:
Estonia, Lithuania, Latvia, Poland, Czech Republic, Slovakia, Hungary,Slovenia, Malta and Cyprus (8 new members are bordering Western Europe)
Candidate Countries:
Bulgaria, Romania, Croatia and Turkey
There are 8 members (out of 24) in FEACO from Newly Joined and Candidate Countries:
• Bulgaria (BAMCO)• Croatia (UPS – AMC)• Cyprus (CYBCA)• Czech Republic (APP)• Hungary (VTMSZ)• Poland (SDG)• Romania (AMCOR)• Slovenia (AMCOS)
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GDP per capita in PPS(EU-25: 100 – 17.900 euros)
Source: Eurostat
60,152,1
47,249,8
73,8
5561,4
80,6
69,5
83,3
32,134,7
48,8
30,7
0
10
20
30
40
50
60
70
80
90
Est
onia
Lith
uania
Latv
ia
Pola
nd
Cze
ch R
Slo
vaki
a
Hungary
Slo
venia
Malta
Cyp
rus
Bulg
aria
Rom
ania
Cro
atia
Turk
ey
Niz1
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Real GDP growth in 2005
• Source: International Risk & Payment Review, October 2006
9,8
7,5
10,4
3,5
6,1 6,1
4,3 3,9
2,3
3,8
5,55
4,3
7,4
0
2
4
6
8
10
12
Niz1
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Inflation, annual ave. in 2005
• Source: International Risk & Payment Review, October 2006
4,1
2,7
6,9
2,2 1,92,7
3,8
2,5 2,52
5
9
3,3
7,7
0
1
2
3
4
5
6
7
8
9
10
Est
onia
Lith
uania
Latv
ia
Pola
nd
Cze
ch R
Slo
vaki
a
Hungary
Slo
venia
Malta
Cyp
rus
Bulg
aria
Rom
ania
Cro
atia
Turk
ey
Niz1
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Unemployment in % in 2005
0
8,36,9
17,8
7,9
16,2
6,5
10,2
7,3
3,4
10,1
5,8
17,8
9,5
0
2
4
6
8
10
12
14
16
18
20
Est
onia
Lith
uania
Latv
ia
Pola
nd
Cze
ch R
Slo
vaki
a
Hungary
Slo
venia
Malta
Cyp
rus
Bulg
aria
Rom
ania
Cro
atia
Turk
ey
Niz1
•Source: International Risk & Payment Review, October 2006
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The European MC-Market Composition by Country/Region, 2005 in %
Source: Feaco 2006
38,9
27,5
9,7
4,7 4 3,7 3,5 2,65,6
0
510
1520
2530
3540
45
Niz1
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Estonia – some general information on MC
- leading country in the Baltic region, small c. & market
- culture for consulting is very young, no clear market leader
- 3 sectors in MC:- big companies (KPMG, PWC, E&Y and D&T) - local companies: technical oriented, young staff, MC mainly for export- many individuals (hard to find clients, strong competition)
- ECA was established in 1992; has 35 members
- accepted as a partner by governmental institutions
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Latvia - some general information on MC- Association of Business Consultants - founded in 1995 and
has 67 members - association's members services are HR management,
economy, marketing, organisation's management, IT, legal services, production and technology
- main goals of LBKA- Latvian MC market trends- current activities of LBKA
- implementation of CMC standards- elaboration of training programs- involvement in common EU projects
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Slovakia - some general information on MC
- MC manage their Slovak operations from Prague- small private companies, specialized agencies, banks,
broker firms, investment companies, foreign trade organizations, different information centers, trade and industrial chamber, and some of the universities
- small and start-up businesses represent a specific area of MC
- National Agency for Development of Small and Medium Enterprises (NADSME), the network of Business Innovation Centers (BIC) and Regional Advisory and Information Centers (RAIC)
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Comparison of Management Consulting in Selected Markets
TurnoverMC Market GDP Pop.
in MC* Growth Growth in mio.
Poland 240 (300) 10,0% (30) 3,5% (5,6) 38Czeck R 390 (400) 2,9% (4) 6,1% (3,7) 10Hungary 251 (226) 11,0% (5) 4,3% (3,9) 10Slovenia 120 ( 90) 8,9% (10) 3,9% (4,6) 2Romania 200 (107) 20,0% (35) 5,0% (8,1) 22Bulgaria 56 ( 56) - (7) 5,5% (5,3) 7* In mio EURO in 2005 and (2004)Source: Feaco, Survey 2005-2006
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Key Figures of Selected European MC-Markets, 2005 (2004)
Country Turnover per
Consultant (EUR)
Czech R 46,791 (50.000)
Hungary 55,134 (65.000)
Slovenia 57,554 (65.000)
Poland 24.000 ( - )
Romania - (50,000)
Bulgaria 20,000 (20.000)
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Specialities in MC
- 97,4% of the 61,6 billion Euro MC turnover in Europe was generated within the Western-European countries and 2,6% in CEE in 2005
- MC has developed significantly
- typical daily fees: 100 – 1.300 EUR
- potential growth rate varies between 2,9 – 20 % (4 - 35 % in 2004)
- MC can be optimistic about the future
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- the importance of reliable local partners will increase, due to language barriers, to the knowledge of the local business culture and to local client contacts
- privatisation and public market projects- private sector and services such as business strategy,
organisation development, human resources and IT consulting
- clients seek not only advice, but implementation and operation services as well
- speed, quality and value added, comprehensive solutions are going to be of key importance
- outsourcing - a key driver of the industry development
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Outsourcing:
- from invoicing to advanced research and development
- Accenture, Capgemini, IBM- some multinationals, like Lufthansa, General Electric... - economic benefit - capital involved - CEE cannot compete with China or India on wage
rates, but it has other advantages:- broad knowledge of European languages- for call centres, it is better to have them in the same time zone, to enable them to respond quickly- geographic proximity
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Specialities of MC in Slovenia
- pro-active promotion activities (awards)- Networking; Consulting cluster- Relation to national government- Changes in top managements- SME’s looking for strategies and HR
- Local communities (consortium for development funds, EU projects etc.)
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Czech Republik Management Consulting Market by Service Line (390 mio euros)
OUT; 21,0
BC; 29,0
IT; 35,0
D&I; 7,5
OS; 21,0
Source: FEACO
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Hungary Management Consulting Market by Service Line (251 mio euros)
Source: FEACO
OUT; 0,8
BC; 58,3IT; 19
D&I; 4,1
OS; 17,8
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Slovenia Management Consulting Market by Service Line (120 mio euros)
OUT; 2,0
BC; 75,0
IT; 3,0
D&I; 12,0
OS; 8,0
Source: FEACO
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Romania Management Consulting Market by Service Line (200 mio euros)
Source: FEACO
IT; 15
BC; 35
D&I; 5
OUT; 5
OS; 40
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Bulgaria Management Consulting Market by Service Line (56 mio euros)
Outsourcing5%
HR24%
Strategy31%
IT10%
OM30%
Source: FEACO
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Daily Effective CEE Partner/Manager Fee Rates – Contrasting Countries & Firm Size
0
200
400
600
800
1000
1200
1400
Hungary Romania Slovenia
Da
ily E
ffe
cti
ve
Da
y R
ate
(E
UR
)
Top 40 Consultancy Medium & Small Consultancy
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Daily Effective CEE Senior Consultant Fee Rates – Contrasting Countries & Firm Size
0
100
200
300
400
500
600
700
800
900
Hungary Romania Slovenia
Da
ily E
ffe
cti
ve
Da
y R
ate
(E
UR
)
Top 40 Consultancy Medium & Small Consultancy
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Daily Effective CEE Consultant Fee Rates – Contrasting Countries & Firm Size
0
100
200
300
400
500
600
700
Hungary Romania Slovenia
Da
ily E
ffe
cti
ve
Da
y R
ate
(E
UR
)
Top 40 Consultancy Medium & Small Consultancy
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feaco forward programme2006-2008
Establishment of a clear operational framework
Development of prospectus Once a year ExCo meeting in one of the
countries Promote the temporary placement of staff
member of CEC association in large WE association
Have ExCo representative at each medium/large scale event organised by National Associations
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Thanks
for your attention.