Review of the year – Management consultancy – the year revisited

Review of the year - Management consultancy - the year revisited

JANUARY

Big Six firms Price Waterhouse and Ernst & Young seek to limit their liability by taking on limited liability partnerships in Jersey. This move follows a successful suit by a former client against Binder Hamlyn (BDO) partnership, which left both the audit and consultancy side liable for damages of #34m. KPMG opts for partial incorporation on the grounds that consultancy contracts already limit the sums paid out to plaintiffs.

PA Consulting’s tax affairs are being investigated by the Inland Revenue.

The Mail on Sunday reports that PA faces a tax bill of #10m, but the company denies this.

On the international side Coopers & Lybrand is in the process of suing Ernst & Young for allegedly poaching 90 of its staff over a period of 96 hours and its project for the Spanish Airport Authority.

FEBRUARY

Touche Ross Management Consultants is renamed Deloitte & Touche Consulting Group. The name-change is part of a wider strategy to create a global consulting practice. Price Waterhouse also goes for the global practice angle and combines its US, European and Japanese management consultancy services.

Hoskyns launches a huge recruitment drive. The firm aims to recruit as many consultants as 500cc, the name of its new business plan, by 1997.

On the acquisition side, Pera Group buys Neville-Clarke International, the consulting and training group, giving Pera Consulting additional revenues of #10m. While Pera acquires, Amdahl metamorphoses. The IT firm merges its consulting and systems integration business into the newly procured Canadian services firm DMR Group.

Ernst & Young develops Ernie, a consultancy advisory service on the Internet.

And KPMG plunges into the business ethics market.

MARCH

Big Six firms cause vibrations in the City, with their plans to move into the legal market. Price Waterhouse recruits Chris Arnheim, head of Hammond Suddards’ corporate finance division to head a legal office.

Ernst & Young plans a stand-alone practice and Coopers & Lybrand considers launching a law firm.

Andersen Consulting sees worldwide revenues up 22 per cent to $4.22bn for the year 1995.

Accountancy firm Binder Hamlyn joins in Computer Management Group’s call for firms to ensure systems are Millennium compliant, after reports from analysts the Gartner Group said that the potential cost to firms worldwide would be $600bn.

Arthur D Little in the US says firms are losing millions because senior management fails to recognise the importance of environmental strategy in business issues.

Ernst & Young forms an alliance with off-shore systems integration firm, Tata Consultancy Services.

AT Kearney says US telecommunications legislation will create $100bn telecoms and entertainment conglomerates.

APRIL

Systems house Logica, whose interim profits for the six months ending December 1995 are up 25 per cent to #9m, announces plans to double the size of its business consultancy practice. It appoints Patrick Amzallag, formerly director at Oasis to head the new practice.

The Management Consultancies Association announces that members’ revenue rose by 15 per cent to #1.25bn at the end of 1995, accounting for 50 per cent of the UK’s management consultancy income.

The main increases in income are in corporate strategy and organisational development, which went up by 40 per cent to #138m, human resources, up by #21m to #61m, an increase of 52 per cent, and marketing and communications, up from #14m in 1994 to #28m last year.

PA Consulting completes the installation of a nuclear disaster early warning system in Belarus and the Ukraine; IBM acquires The Wilkerson Group (TWG), a US healthcare and pharmaceutical niche consultancy.

Arthur D Little restructures its North American operations to align them with those in Europe.

MAY

A report on investment trends and sales in Europe by Deloitte & Touche Tomatsu International, finds that direct investment in Europe by American firms is 200 per cent greater than in Asia, and 150 per cent more than in Latin America. It predicts that investment in Europe by US firms will rise.

The International Safety Management Organisation launches a new safety standard, International Safety Audit 2000, designed to be integrated with ISO9000 quality management system standards.

The Institute of Management Consultants joins together with Performance Audit to deliver Selectassure, a new accreditation scheme for consultants via Business Links and Training and Enterprise Councils.

A survey by the Institute of Certified Management Consultants of Canada finds significant growth in the number of consultancies operating in Canada.

Hardware manufacturer Amdahl pays $145m for US-based Trecom Systems.

JUNE

The Institute of Management Consultants announces plans to increase its membership by radically overhauling the membership structure.

A survey by Swedish reseachers Universum establishes that consultancy is the profession of choice for graduates in Europe. Graduates chose McKinsey as top employer, with the Boston Consulting Group and Andersen in joint second place. In the UK, however, graduates’ preferences were for the BBC in first place and British Airways second. Andersen Consulting was their 11th choice.

#50,000 grant by the European Commission’s Phare programme to develop management consultancy in Hungary. VTMSZ, the MCA’s counterpart in Hungary, receives #31,000 from the UK Know How Fund.

An unusual alliance is forged between Andersen Consulting, Computer Sciences Corporation, AT&T Solutions and Bell Atlantic Network Integration, when JP Morgan outsources its IT data centres to the consortium, in a seven-year $2bn contract.

JULY/AUGUST

Mike Jeans, KPMG’s director of global change management, is awarded an honorary MBA from Cranfield University, in recognition of his contributions to management consultancy.

The management support firm OSI launches an “holistic” approach to programme management in a bid to differentiate itself from the mainstream consultancies.

The IT recruitment consultancy Lorien buys P-E International for u11m cash. The acquisition is funded by a #14.6m rights issue. P-E, which was owned by the Cray Group, has been performing well but has been dogged by the group’s financial results; Cray announces a pre-tax loss of #19.4m.

AT Kearney makes for the Russian front, and acquires Moscow-based firm Canon Associates. And Cap Gemini Sogeti (CGS), which has been working in South East Asia, consolidates its operation by opening a new office in Singapore. The firm also acquires AQS, a Singapore-based software applications maintenance firm with 80 staff, skilled in the latest IT software, Oracle and SAP.

SEPTEMBER

Arthur Andersen merges its compensation and benefits arm into a new worldwide Human Capital Services practice, in a bid to expand its business and consultancy services.

IBM Consulting Group, which boasts 200 UK consultants, is elected a new member of the Management Consultancies Association.

ICL aims to create Europe’s largest human resource consultancy by merging its training and HR division, ICL Learning, and Peritas, the firm’s IT management and training consultancy. The combined annual fee-income of the firms is #10m.

A management buyout puts Alexander Consulting Group in the hands of staff from its organisational effectiveness division.

Ernst & Young outsources its entire IT operations to Sema Group. And AT Kearney and parent firm EDS sets up a new global business unit to deliver enterprise applications advice to their clients.

OCTOBER

In a bid to make firms and their management more aware of the cost and implications of Millennium compliance, Taskforce 2000 is set up by the Department of Trade & Industry, with funding of #170,000.

The Hoskyns name disappears, as the IT services group is rebranded as Cap Gemini.

A VNU report on the Future Markets for Consultancy 1997 finds that small consultancy firms have been charging out senior IT consultants to the financial sector at rates 15 per cent higher than those of the Big Six.

Druid Group announces its plan to float, and go for a full listing on the London Stock Exchange. And last but not least, Damon Hill, sporting the Andersen logo, wins the Formula One drivers’ championship for Williams-Renault.

NOVEMBER

DEGW, the architectural design and consulting group, merges with Dutch management consultancy Twijnstra Gudde to create a 450-strong international consultancy with revenues of $70m.

Ernst & Young’s $6,000 per year Internet service Ernie makes its first million dollars in revenue since its launch in February.

The Management Consultancies Association receives a #20,000 subsidy from the DTI’s Information Society Initiative’s Trade Association Network Challenge towards setting up a new Internet Website. The MCA puts u20,000 towards the project.

KPMG warns that firms should not sit on the fence over European Monetary Union. It says IT systems will need to be upgraded to deal with European Union, whether or not the UK joins the EMU.

Executive director of the MCA Brian O’Rorke is inaugurated as Master of the Guild of Management Consultants.

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