Con­sul­tan­cies cash in as firms strug­gle with change

Finweek English Edition - - INSIDE - BY JANA MARAIS

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

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