“Strategic management
consulting – the A.T. Kearney
perspective”
Warsaw, May 28, 2001
Wyższa Szkoła
Przedsiębiorczości i Zarządzania
im. Leona Koźmińskiego
w Warszawie
Presentation
an EDS companyAgenda
n Overview of management consulting
n A.T. Kearney as a strategic management consulting firm
n Consultant’s role in A.T. Kearney
n The future of management consulting Overview of management consultingToday, one is confronted with a variety of consultants . . . .
n Tax “consultants”
n Hair “consultants”
n Image “consultants”
n Color “consultants”
n Catering “consultants”
What then, is “management consulting?
Overview of management consultingOne definition . . . .
Management consulting = assisting management
in facilitating change
to gain and sustain
competitive advantage
Overview of management consultingCompanies engage management consultants for several reasons — some good,
some not so good
Some reasons why companies hire consultants
n The company does not have the necessary skills internally - Good reason
n The company has never confronted this situation before - Good reason
n Management needs fresh ideas and a new perspective - Good reason
n Management wants the consultant to confirm its ideas - Not-so-good reason
n Everyone in the company is too busy - Not-so-good reason
n Management needs a “tie breaker” - Not-so-good reason
Overview of management consultingWhy does management consulting seem to be growing in importance?
n 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
n Companies need “tailored” solutions to remain competitive in an increasingly global marketplace
n The high cost of what management consulting provides can only be justified by companies on an outsourced, as
needed basis
Overview of management consultingWhy does there continue to be a demand for management consulting?
n Most companies do not know how to
• Analyze „themselves” in an objective way when business situations change significantly
• Operate in a temporary, project mode
n Unfortunately, most business schools do not
• Prepare managers for “exceptions” in business situations
• Teach real project management
Overview of management consultingInformation technologyOperationsStrategy
• System strategy creation
• Information systems market
analysis
• Selecting appropriate IT
solutions
• Inplementation of selected IT
solutions
• Process optimalization
• Change management
• Business process reengineering
• Strategic sourcing
• Supply chain management
• Service level improvement
• Benchmarking
• Organization restructuring
• Corporate strategy
• Strategic business units
• e-business strategy
• Production strategy
• Distribution strategy
• Market entry strategy
• Restructuring
The major global management consulting firms concentrate in three areas of
consulting; A.T. Kearney, together with EDS, cover the whole spectrum
McKinsey
Monitor, BCG, Bain
Booz Allen
Accenture
CSC Index
IBM Consulting
A.T. Kearney (EDS)
“Big Five” firms
Overview of management consultingConsulting Industry Market Size and Growth Rates
Market 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
organizations
IT 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 consultingThe consulting services in Poland emerged after the transformation in 1989 with
privatization; other segments of the market developed later
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Development of the consulting market in Poland
Privatization consulting
Audit and legal services
IT consulting
High value added consulting
Start of the economic
transformation
Overview of management consultingThe development stages in Poland were significantly different than in
Western Europe
Source : A.T. Kearney
1998 - 20001994 - 19971990 - 1993
External
trends
• Start of economic
transformation
• Privatization of state own
enterprises
• Fast growth of the economy
• Development of the free market
institutions (e.g. stock exchange)
• Acquisitions by foreign investors
• Consolidation of the economy
• Increased competitive preasure
• Acquisitions and post merger
integrations
• Big ticket privatizations
Consultants’
value
proposition
• Privatization
• Financial valuation
• Privatization/Due Dilligence
• IT consulting
• Restructuring
• Efficiency improvement
• Reorganization/Reengineering
• Strategy
• IT consulting
Key players • Small Polish companies
• Smaller foreign companies
specialized in financial /
privatization consulting
• Big five
• Specialized Polish companies
• Big five
• A.T. Kearney
• McKinsey
• BCG, ...
Key factors for
success
• Relationships
• Prices
• Local knowledge
• Quality standards
• Value added
• Global network
• Relationship
Major client
group
• State administration
• Largest Polish state-owned
enterprises
• Foreign investors • Foreign investors
• Largest Polish, privately owned
corporations
Overview of management consultingThe consulting market in Poland is still significantly different than in other
countries
DifferencesDrivers
n Low sophistication of the market. Many
potential clients do not recognize the need for
consulting services
n Brand names of global players not known
n Consulting fees relatively higher in relation to
personal costs
n Two groups of clients:
• International companies entering Poland
• Largest Polish companies of which many are
state owned
n Local shortage of consulting and industry
knowledge and experience
n Market dominated by financial and tax advisory
n Local consultancies enjoy important market
position in Poland
n Different product offerings and selling strategies
for domestic and for international clients
n Need to transfer knowledge and experience from
developed markets
Overview of management consultingConsulting market in Poland is still dominated by financial and tax advisory
services
Percentage of companies using different consulting services
Source : BOSS-Gospodarka
Financial and tax advisory
Quality management
Business strategy
Human resources
Public relations
Other
Do not use consulting services
Overview of management consultingIn parallel to world-wide brands, local consultancies enjoy important market
position in Poland
Polish subsidiaries of global consultancies
n Dominant strategies:
• Focus on long-term relationship with client
• Focus on several key products / industries
n Key success factors
• Global network
• Combination of industry and local knowledge
• Tangible results
n Targeted client segment
• International companies
• Largest Polish corporations from strategic
industries
n Products
• Value added projects
n Dominant strategies
• Niche players
• Specialization in one product / industry
n Key success factors
• Price
• Personal relationships
n Targeted client segment
• Small and medium enterprises
• State and local governments
n Products
• Off-the-shelf reports
• Company valuations
• Issuing prospectuses
• Feasibility studies
Local companies
Overview of management consultingClients can be split into two groups having different expectations regarding
consulting services
International clients Local clients
n Products
• Market entry strategies
• Distribution strategies
• Post merger integration of acquired local
companies
• Efficiency improvement in acquired
companies
n Projects sold mostly outside Poland (at the HQ
level)
n Co-operation characteristics
• Used to work with consultants
• Used to consulting fees
• Expect involvement of own staff
• Value added driven
n Products
• Strategy development
• Marketing strategies
• Restructuring
• Cost reduction
• IT systems
n Projects sold in Poland
n Co-operation characteristics
• Used to work with consultants
• Used to consulting fees
• Expect consultants to do “everything”
• Price driven
Overview of management consultingGlobal 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 capabilities
Global capabilities
and support
On-line access to intellectual
capital, data bases, benchmarks
Training and global
project experience for
local consultants
Overview of management consultingA.T. Kearney as a strategic
management consulting firmn Founded in 1926
n International scope
• 65 offices in 34 countries
• Over 3000 consultants
n 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
n Since 1995, A.T. Kearney is part
of EDS, the international leader in
technology information
n 80% of work for repeat clients
n Average consultant work
experience: 17 years
Tokyo
Chicago
New York
Madrid
London
Düsseldorf
Milan
Amsterdam
Brussels
Munich
Stuttgart
Beijing
SingaporeStockholm
Oslo
Copenhagen
Hong Kong
San Francisco
Los Angeles
Dallas
Phoenix
Atlanta
Mexico
Sao Paulo
Melbourne
Sydney
Berlin
Toronto
Boston
Cleveland
Washington
Paris
A.T. Kearney is one of the leading high-value-added strategic management
consulting firms in the world
Warsaw
Prague
A.T. Kearney as a strategic management consulting firmA.T. Kearney is one of the few high-value-added management consulting firms
which possesses the full range of consulting services
Complete set
of consulting skills
Business and marketing strategy
Post merger integration
Strategy sourcing
Transforming the enterprise
Restructuring
Technology management
Physical distribution & logistics
Operations redesign – Process & structure
Change management
Multi-functional bemchmarking
A.T. Kearney as a strategic management consulting firm
Core competenciesSample of
Recent Clients
Representative Annual
Results Achieved
• Ameritech
• 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-Royce
Federal Federal
ExpressExpress
>$500 Million>$500 Million
SearsSears
>$750 Million>$750 Million
Rolls-RoyceRolls-Royce
$750 million$750 million
Marks & Marks &
SpencerSpencer
$250 million$250 million
General General
MotorsMotors
>$3.5 Billion>$3.5 Billion
A.T. Kearney is committed to delivering tangible and measurable “bottom-line”
results for our clients
A.T. Kearney as a strategic management consulting firmSource: Louis Harris Survey, 1998
A.T. Kearney is the global leader in client satisfaction
A.T. Kearney as a strategic management consulting firmA.T. Kearney is a leader in the field of Integrated Supply Chain Management
• Delivered 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 Leadership
Selected Examples
A.T. Kearney as a strategic management consulting firmA.T. Kearney facilitates new thinking on the future of the Retail/Consumer
Products industry through several forums
Thought Leadership
• Lead 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
Forum
Selected Examples
A.T. Kearney as a strategic management consulting firm• 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 initiatives
A.T. Kearney as a strategic management consulting firmA.T. Kearney is the recognized European leader in several industries
Major clients per practice
• Deutsche Bank
• BNL
• Barclays
• Societe Generale
• AXA
Financial inst.
• Rohm&Haas
• Arjo Wiggins
• BASF
• Pechiney
• BP/Amoco
Chemicals/O&G
• FIAT Group
• VW
• GM Europe
• Daimler Chrysler
• Renault
Automotive
• France Telecom
• Siemens
• Deutsche Telekom
• Lucent
• Philips
Comm/hi-tech
• VEBA/VIAG
• Drewag
• Mainova
• ENEL
• ENBW/Neckar
Utilities
• Carrefour
• Marks &Spencer
• Galerie Lafayette
• Unilever
• Auchan
Consumer/retail
• Rolls Royce plc.
Aerospace
• Gambro
• Quintiles
• Merck
• Henkel
Pharma/health
• SAir Group
• Air France
• Lufthansa
• KLM
• Deutsche Bahn
Transportation
A.T. Kearney as a strategic management consulting firmA.T. Kearney has wide experience in many industry sectors in Poland
A.T. Kearney as a strategic management consulting firm
n Automotive
n Energy
n Chemical
n Banking
n Insurance
n Telecommunications
n Logistics and distribution
n Publishing
n Steel
n Fast-moving consumer goods
n Retirement funds
n Food
n Mining
n Shipbuilding
n Capital markets
n Media
n Real estate
n Government institutionsExamples of projects realized by A.T. Kearney in Poland
Number one Polish
publisher
Leading shipping company
Major Scandinavian bank
Leading automotive
components manufacturer
n Strategy
n MIS
n Organisational structure
n Governmental assistance programme
development
n Market entry strategy
n SAP implementation
Publishing
Transportation
Financial
Institutions
Automotive
Industry Client Project
Selection
Mobile telephony
provider
n Operations improvement
n Business market diagnostics
n Loyalty program
Telecom
Alternative fixed line
telephony provider
n Business planning for regional markets
n Project management
Telecom
A.T. Kearney as a strategic management consulting firmConsultant’s role in A.T. KearneyBecoming a good management consultant requires time, experience and certain
key skills
Business
education
Business
experience
Management
background
Technical
backgroundConsulting
experience
Written and
oral skills
Analytical
skills
Creative
thinking
Management
Consulting
Capability
Consultant’s role in A.T. KearneySix key rules* must be followed by every good management consultant
n Know what you’re doing!
n Don’t act beyond your capabilities
n Continually add value commensurate with your skill and client expectations
n Keep to the agreed-upon project scope
n Hold client information strictly confidential
n Be ethical at all times
*Source: Andrew Thomas Kearney, founder of A.T. Kearney
Consultant’s role in A.T. KearneyIn addition to “time”, experience and basic skills, the good consultant requires
three disciplined core consulting capabilities
n Proposal writing = selling the assignment
n Project management = conducting the assignment
n Report writing = the product
Consultant’s role in A.T. Kearney“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 work
and personal life
- 434U - Vacation buy-back program
- Part-time program
- Concierge services
“Work hard; be rewarded well”
•Provide appropriate compensations
acknowledges the demands of the
business
•Being recognized for outstanding
performance
•Provide input into compensation initiatives
•Salary increases for mid-year promotions
•Service incentive programs
•Principal LTI options
A.T. Kearney adheres to four key points to hire and retain the best consulting
talent
Wealth
Growth Pride
Teaming
Source: GPTW
Consultant’s role in A.T. KearneyThe future of management consultingThe Global Consulting Market by Major Region
North America Western Europe Asia-Pacific Latin America Rest of World
Region
1998
2003
CAGR
Market Size
($ B)
CAGR
(%)
North America and Western Europe are projected to be the leading growth
markets
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 organizations
The future of management consultingGlobal Consulting Market Size and Growth Rates by Vertical Industry
($ Billions)
1998 Industry Size
20
1998 – 2003
CAGR
15
10
5
$5 $10 $15 $20
Manufacturing
$33.2
Financial
Services
$33.8
Government
$15.3
Communications
$19.8
Wholesale/
Retail
$11.9
Healthcare
$7.9
Energy/Oil
and Gas
$9.9
High
Technology
$8.0
Utilities
$7.3
Business
Services
$3.6
Transportation
$2.5
Med./Ent./Pub.
$2.9
Miscellaneous
$2.4
Traditional industries will continue to grow . . . .
2003 Industry
Consulting Market Size
Early E-Business Adopters
The future of management consultingPure E-Business
• Start-up e-business
• Web strategy, design and
implementation
• E-strategy, marketing,
operations
Type of Service Brick and Mortar Dot.com
1998 2003
$63.0 $68.0
1998 2003
$0
$20.0
1998 2003
$63.0
$48.0
1998 2003
$24.0
$75.0
1998 2003
$4.5
$19.0
1998 2003
$19.5
$56.0
1998 2003
$1.5
$16.0
1998 2003
$1.0 $11.0
1998 2003
$0.5 $5.0
All Clients
E-Business Related
• Traditional consulting services
with e-focus
Traditional Consulting
• Strategy
• Operations
• IT
• Change management
Sources: E-commerce Consulting Kennedy; A.T. Kearney analysis
Breakdown of Global Consulting Market
Segments (U.S.$ 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 growth
The future of management consultingExpected Growth in E-Business B2B Services
1999 – 2002 Annual Growth Rate (%)
Internet
Strategy/
Advice
Digital Value
Chain (2)
Internet
Software and
Services
Internet
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 analysis
B2B Is Eclipsing B2C:
Expected Growth in E-Business
Revenue
($ Billions)
• Higher barriers to entry than B2C
• More sustainable business models
The B2B market appears most attractive
The future of management consultingClient-Market Positioning Matrix
Pure E-
Business
E-Business
Related
Traditional
Services
Brick & Mortar
(incl. Dot Corp’s)
Dot.com’s
Clients
Therefore, the new Economy requires a new positioning and new innovative
client-service relationships
Traditional
Client Base
Management
Consultants
New Client
Base Venture
Capitalist /
Incubators
„New Economy
Consultants“
The future of management consultingEnd-to-end e-services will have a competitive advantage over functional specialists
Paradigm shift in IT -services provision
Plan
Traditional IT-services
delivery chain
e-business
delivery chain
ImplementBuildVision
The future of management consultingSo, 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
n A.T. Kearney together with e.solutions is enabling the enterprise to offer end-to-end
e-business solutions - from strategy to implementation
n 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
Stategy Operations Implemen-
tation Web-Design E-Business
Solution
End-to-End Solution Process
EDS e.solutions/
Kearney Interactive
A.T. Kearney
•e-Space (incubator)
• E-Business Practice
Marketing
The future of management consultingA.T.Kearney offers comprehensive support to start-ups and new ventures.
. Comprehensive
strategic and
operational
support
. Dedicated team
. Long-term
commitment and
flexible
compensation
Business
Plan Launch Growth IPO/
Sale
…
A.T. Kearney Start-up Service
Practice
Shares Others$
A.T. Kearney
Start-up
Network
+
Source: A.T. Kearney Start-up
A.T. Kearney New Ventures
Support through all business phases
The future of management consultingQuestions
& Answers
an EDS company
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