Consultancies cash in as firms struggle with change
As companies around the world search for new markets and ways to deal with everchanging technological and regulatory landscapes, management consultancies are finding their services increasingly in demand.
Bain & Company, one of the world’s top three elite consultancies, has seen its business in Sub-Saharan Africa (SSA) more than double over the past three years, worldwide managing director Bob Bechek said during a recent visit to South Africa.
Bechek attributes the firm’s success to attractive opportunities in SA and the significant work undertaken to build its business in Nigeria, as well as having the right leadership and top talent in place.
“We have a very good business here in Sub-Saharan Africa, generally driven out of South Africa. In the last five years it’s been a rocket ship for us,” Bechek said. It is one of its fastest-growing offices globally, with the firm seeing growth in East Africa in addition to the growth of its South and West African business.
The company, which is owned by the firm’s partners, has 51 offices in 33 countries, and was the first global toptier consultancy to tie its fees to the bottom-line results of its clients. Bain & Co. operates independently from private equity f irm Bain Capital, a major shareholder in Edcon. Although both companies were founded by Bill Bain, they have no shared ownership or management, and Mr Bain is not involved in either today.
While Bain is notoriously secretive about its clients and works across i ndustries, t he l ocal mining and telecommunications sectors in particular are experiencing turmoil – which offers opportunities for consultants. “The mining industry for example needs to go through significant transformation as pricing levels have come under pressure in many different sectors. The industry therefore needs to increase productivity or find other avenues for growth. The organisational challenges are all very significant,” he said.
As is the case in most other emerging markets, the telecommunications sector, because of technological changes, is moving from a wired world to a wireless world, and needs to adapt to a market where increasing data usage is making voice an afterthought, Bechek said.
“It has a wonderful democratising effect, but it requires a very significant infrastructure buildout, customer service capabilities and distribution in very competitive telecoms marketplaces that we help carriers with all over the world.” Globally, Bain is seeing signif icant demand for its services from the retail and healthcare sectors in particular, Bechek said. “Retail’s been changed so much by technology, and we’re helping many retailers around the world to make that change successfully.”
A Bain study of 300 firms across 20 global industries, released in October, found that only 20% of companies had progressed beyond the “beginner” stage in responding to digital innovations that are transforming their industries. “A quarter century into the digital revolution, many companies still question whether to invest in digital capabilities or are unclear about how to best execute a digital strategy that will augment their business. Others have launched digital initiatives, but keep them entirely separate from their physical operations,” Bain found.
On the retail side, for example, Bain predicts that physical retail stores won’t