Consulting firms to change business as we know it
Management consulting firms aren't simply looking to give some advice to companies. According to industry leaders, they are out to transform Poland.
"Transformation and restructuring in the economy our task is to make sure that those changes progress efficiently," said Eugeniusz Gosiewski, president of Wroclaw-based Kursor, a training and consulting company.
In the process, management consulting firms will also have to transform themselves as they, like companies across Poland, face increasing pressure from globalization, a more open economy and from European Union-based firms that soon enough will have the same privileges in Poland that they enjoy on their home turf.
"There are too many small firms and they will have to merge," Gosiewski said. "So the structure of the industry has to change internally. The external change will be enhancing the standards up to the level of international firms."
"With the speeding up of globalization, management consulting firms will have to become really global players and offer the same services across the world," said Monika Sowa, president of Warsaw-based Cap Gemini Ernst & Young Polska. "Local consulting companies without access to international knowledge will have to find a way to stay on the market."
Miroslawa Kucharska, owner of the Warsaw-based Schenk Institute, said the trend toward mergers has its exceptions. "There is a sector of small independent niche companies that are staying the way they used to," she said. "Two or three years ago we thought globalization and merging. The biggest are merging and the small are staying independent. It is sort of a surprise."
Within the competitive consulting market, new technology is one of the most important spurs for the industry and is leading to some of the biggest changes, executives agree.
"Management consulting will be merging with IT companies to combine strategy, business solutions and systems implementations into complex offerings," Sowa said. "According to some research, IT consulting exceeded the management consulting by almost four times in 1999, and the gap is expected to grow."
While trying to maintain their own competitive footing, management consultants also want to make Polish companies in other sectors their clients more competitive. One set of targets includes state-owned firms sent off by the government to fend for themselves in global markets. The Organization for Economic Cooperation and Development (OECD) names electric, railway, health insurance and telecommunications as sectors that haven't faced unbridled competition but soon will. These sectors are not alone.
"The enlargement will increase competitive pressure in the European Union (EU) and (Central and Eastern European countries), and require comprehensive structural adjustments on both sides," stated last year's report by the European Union of Artisans and Small- and Medium- Sized Businesses, an employers' organization representing companies in the EU.
"We must prepare the Polish business community to join the European Union," said Tomasz Sankowski, managing director of the Canadian Management Institute, which has offices in Montreal and Warsaw. "The Polish community is quite behind."
Sankowski cautioned that, even with increasing global competition, consulting firms have to take local circumstances into account.
"Many companies are skeptical about Western consultants," he said. "The No. 1 one resistance to hiring Western consultants is 'you do not understand the way we do business in Poland.' We have to show how we can assist."
One of the big challenges for the industry, Kucharska added, is convincing local companies that a new or different way of doing business can be beneficial.
While domestic firms are prime targets for consultants, another market segment lies in helping foreign companies adapt to Poland.
"Big companies need to adjust to Polish conditions," Kucharska said. "They have to tailor international patterns to Poland."
According to international studies, local businessmen are not the country cousins of the EU elite, and competition is stiff in the domestic market. "A high proportion of (Polish) firms have proven resilient under intense competition: Half of active SMEs in 1999 are already more than four years old," said the OECD in a report released this month. "Mid-size enterprises are a particularly noticeable group, showing remarkable investment activism and growth in the recent period. They engage in technological transfers and organizational development, most medium enterprises (seven out of eight according to a recent review) having already a fraction of foreign participation in their equity capital. They constitute the bedrock of Poland's domestic corporate sector."
While the market is getting tougher and more sophisticated, there is still plenty of opportunity, officials said.
"International companies present in Poland and new Polish business leaders and entrepreneurs will be the major customer group for us," Sowa said. "In terms of industries, telecoms and financial services will probably account for much more than half of the consulting market. The driving forces will be new technologies, foreign investment and deregulation. The recently privatized companies will require consultants to improve market position and increase performance."
