Business Insights Our research findings have already given us a good picture of international consulting. However, there remain a few unanswered questions. We still don’t know exactly how the market has developed in recent years and are especially interested in how the German consulting market measures up in light of these developments. Fortunately, we had the opportunity to speak with another expert on the issue. In our conversation with Dr. Andreas Merbecks, partner of BearingPoint Switzerland AG and of Business Strategy and Transformation for Financial Services, we finally got the answers we were looking for.
What meaning does the term “International Consulting“ have for you? If you Google the exact phrase “international consulting,” you get around 3.78 million results, so it can mean anything. As a practical approach, I suggest the following. International consulting can be seen from three perspectives: that is, from a client perspective, i.e. clients that operate in multiple countries; from a people perspective, i.e. consultants from different nations; and from a knowledge perspective, i.e. approaches, techniques, etc. that have their origin in different countries. How has the market changed within the last decade? Obviously there are two main trends. One is that companies and therefore clients have continued becoming more global. In order to serve larger organisations, an international reach has become more important for consulting firms. Secondly, the areas with the highest growth rates have been – setbacks notwithstanding – not in domestic markets, but in other regions. Think about BRIC states (Brazil, Russia, India and China) for example. In general, therefore, it is
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important for management consultants to be able to serve clients internationally and/or serve international clients. Are there any trends that you can make out? As I said, the world is globalising, and it appears this is unlikely to end any time soon. Therefore, I believe the demand for and the efforts of consultants to go international will further increase. As this occurs not just in Germany but around the world as well, networks will form. We may see something similar to developments in the international airline industry; just think of the Star Alliance, for example. Will the German consulting market profit from these trends? The typical consultants’ answer to any question is, “it depends.” It also applies when it comes to whether or not the German market will benefit from these trends. Having said that, if your perspective is European, Germany might benefit, as Germany is the largest market in Europe. In addition, German firms in particular have a strong foothold in foreign trade. Therefore, they may require ever more consulting services abroad. However, from a global perspective and in a rapidly growing global market, Germany’s relative share will decline. Which challenges do companies face when consulting internationally? Some challenges that come to mind include complexity, risk and cultural issues. Let me expand on that a little.
Consulting is already a complex business. If you want to go international, this complexity increases dramatically. Think of different laws, business practices, currencies, languages, etc. There is no automatism to success. More things can go wrong in an international setting, so there is more risk. Some consulting firms with German origins and international ambitions still do the majority of their business in Germany. And remember that in some countries, German cars may be popular while the German people and their style are much less admired than their products. Which markets are the most attractive, and are there any hidden champions? The textbook answer here is to look at the classic dimensions of market attractiveness, which happen to be growth and profitability. However, I’d also recommend putting emphasis on the consulting firm’s existing client base and this client base’s needs. Markets important to existing clients in a consultant’s home market are more likely to help the consultant on his road to success than any attempt at entering a certain market simply on the basis of its strong growth. In light of this, how will Germany develop in the future? Germany is and remains an important market. Quite a large proportion of projects are purely domestic. Whilst international consulting certainly is an important topic to observe, one should not forget the home market. /
Author: Maximilian Deuber Contact: Maximilian.Deuber@move-ev.de … a member of the students’ consultancy move – Studentische Unternehmensberatung e.V. in Münster (Germany).