SPECIALITIES%20OF%20MANAGEMENT%20CONSULTING%20IN%20NEWLY%20JOINED%20AND%20CANDIDATE%20COUNTRIES

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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 Countries

• Newly 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
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Real GDP growth in 2005

• Source International Risk Payment Review,
  October 2006

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Inflation, annual ave. in 2005
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Unemployment in in 2005

• Source International Risk Payment Review,
  October 2006

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The European MC-Market Composition by
Country/Region, 2005 in Source Feaco 2006
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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, EY and DT)
• - 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

• Turnover MC Market GDP Pop.
• in MC Growth Growth in mio.
• Poland 240 (300) 10,0 (30) 3,5 (5,6) 38
• Czeck R 390 (400) 2,9 (4) 6,1 (3,7) 10
• Hungary 251 (226) 11,0 (5) 4,3 (3,9) 10
• Slovenia 120 ( 90) 8,9 (10) 3,9 (4,6)
  2
• Romania 200 (107) 20,0 (35) 5,0 (8,1) 22
• Bulgaria 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
• SMEs 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)
Source FEACO
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Hungary Management Consulting Market by Service
Line (251 mio euros)
Source FEACO
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Slovenia Management Consulting Market by Service
Line (120 mio euros)
Source FEACO
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Romania Management Consulting Market by Service
Line (200 mio euros)
Source FEACO
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Bulgaria Management Consulting Market by Service
Line (56 mio euros)
Source FEACO
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Daily Effective CEE Partner/Manager Fee Rates
Contrasting Countries Firm Size
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Daily Effective CEE Senior Consultant Fee Rates
Contrasting Countries Firm Size
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Daily Effective CEE Consultant Fee Rates
Contrasting Countries Firm Size
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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.