Bankruptcy of management and supply chain consulting?
Dutch consultancy sector on the verge of bankruptcy” was the headline of a column by Pieter Klaas Jagersma, professor and entrepreneur, in a financial newspaper on 8 November 2013. His column started with the recent takeover of Booz & Company by PwC. According to the columnist, Dutch consulting firms have lost their relevance: the financial performance of Twijnstra Gudde and Berenschot is weak because they are being propped up by (low-level) government support. And there are no Dutch firms to rival the three strategic consultancy firms – McKinsey, BCG and Bain – and the ‘big four’ accountants – Deloitte, EY, KPMG and PwC.
“The big data trend will be the final nail in the coffin for many Dutch consulting firms who are currently struggling financially,” claimed Jagersma at the end of his column. As if the analysis of big data will make or break the consultancy sector – a dangerous conclusion.
According to two thirds of the managers recently surveyed by Dutch business magazine Management Team, there is too little differentiation between the major consulting firms and they are generally bland. “When describing themselves, they tend to state the obvious or emphasise non-specific criteria such as professionalism and quality,” says researcher Raymond van Doorn from consultancy AAIM, which advises other consulting firms on their strategy. Furthermore, existing companies are under threat from an emerging group of freelance interim professionals. The Dutch interim agency Eden McGallum supplies former consultants from McKinsey and BCG at half the price.
The acquisitions by the four big accountancy companies are primarily a result of an ever greater share of their turnover coming from consultancy activities, and of multinational clients requiring an increasingly broad range of expertise to handle their large-scale transformation projects. Based on our annual assessment of the Dutch market for supply chain consultancy, there is absolutely no sign of a downward spiral: the number of supply chain consultants and projects remains relatively stable.
Personally, I think that it is more a case of strategic advice taking a downturn. Professor and management guru Henry Mintzberg claims that you can’t just buy strategy: “Any chief executive who hires a consultant to give them strategy should be fired,” he says. In terms of helping to translate corporate strategy into actionable supply chain management, advisors – whether from major firms or as freelancers – will remain useful for a long time to come.
Publishing Director & Editor-in-Chief Supply Chain Movement