The ICMCI Biennial Congress 2005 in Beijing

Consulting strategy on
Cross-cultural environment
Presented by : Dr. Kyeong Seok Han
Professor of Soongsil University
Korea Management and Technology
Consultant Association
e-mail: kshan@ssu.ac.kr

Contents
Session 1 : Outline
Session 2 : Global Consultancy in Cross-cultural
environment
Session 3 : Current Korean Status
Session 4 : The Challenges in Cross-cultural
environment
Session 4 : Conclusion
2

Session 1 : Outline

Definition of Management
Consulting
Management Consulting is to
provide the professional service
for clients/enterprises to
analyze and solve business
problems and
for clients to apply successful
cases of other companies to
their own companies.
4

Definition of Management Consulting

Definition of management Consulting
The provision of independent advice and assistance
about the process of Management to clients with
management responsibilities, The individual can be
a generalist or a specialist and may approach an
assignment with, for example, a purely financial
point of view, as required by the client.

Definition of Management Consulting

Key
words

Independence

Special Training
and Qualification

Identifying and
Analyzing Problems

Advisory
Service

Solving problems and

Implementation

Session 2 : Global Consultancy in

Cross-cultural environment

Global Consulting Market

We expect continuous growth until 2006.

Source : Kennedy Information

Global Consulting Market

Source : Kennedy Information

Global Consulting Market-by Industry

Source : Kennedy Information

10

Global Consulting Market-by Industry Ratio

Source : Kennedy Information

11

Global Consulting Market-by Region

This is the data of Year 2004. US is 50% of the whole market.

Source : Kennedy Information

12

Global Consulting Market - China

The Consulting Industry is growing rapidly in
Peoples Republic of China.
Currently the size of Chinese consulting market is
estimated as US $150 Million.
They expect that the management consulting
market maintains more than 20% of growth rate
until year 2010. After 20 years the size of Chinese
consulting market will be US $200 Billion which
will one of top five markets in the world.
13

Global Consulting Market - China

The reason of the growth
The main reason is the market-oriented
economic systems and rapid changes on
enterprises which needs advices from
consulting firms.

14

Global Consulting Market - China

Major consulting firms in China
The major consulting firms in China are
multinational consulting firms including
McKinsey, Accenture, Deloitte, and so on.
A specialist in KOTRA (Korea TradeInvestment Promotion Agency)
encourage to join Chinese consulting
market for more than 10,000 Korean
firms in China.
15

Global Consulting Market of Public Sector

Source : Kennedy Information

16

Areas of Global Consulting

Source : Kennedy Information

17

Areas of Global Consulting

Source : Kennedy Information

18

Session 3 : Current Korean

Consultancy

Current Status of Korean Consulting Industry

1.
1. Korean
Korean consulting
consulting industry
industry falls
falls behind
behind for
for
about
about 10
10 years
years comparing
comparing to
to the
the industry
industry of
of
advanced
advanced countries.
countries.
2.
2. More
More than
than 50%
50% of
of Korean
Korean consulting
consulting market
market is
is
dominated
dominated by
by foreign
foreign well-known
well-known consulting
consulting
firms.
firms.
3.
3. In
In order
order to
to satisfy
satisfy global
global standards
standards after
after Asian
Asian
Financial
Financial Crisis,
Crisis, Korean
Korean firms
firms needs
needs consulting
consulting
from
from foreign
foreign consulting
consulting firms.
firms.
20

Funding support from Korean Government

More than 200
Consulting firms &
APEC CBCs

Counseling with About 2,000

Consulting
Small businesses

Korea Management & Technology Consultants Association

(KMTCA)
[Help KMTCA trusted to keep the program going.]

Government (Ministry of Small Business Administration)

Total consulting-aid volume: about half million US dollars to this
program out of 15 million US dollars to support consulting SMEs
per year
21

Current Trends of Korean Consulting Industry

1.
1. The
The rapid
rapid growth
growth of
of Korean
Korean Consulting
Consulting
Industry:
Industry: The
The Size
Size of
of Korean
Korean Consulting
Consulting Market
Market
is
is estimated
estimated as
as about
about US$
US$ 1.71
1.71 Billion.
Billion. The
The
growth
growth rate
rate was
was more
more than
than 14%
14% in
in last
last 55 years.
years.
(Source:
(Source: Korean
Korean Consulting
Consulting Association
Association in
in 2002)
2002)
2.
2. The
The vague
vague boundary
boundary of
of Consulting
Consulting Job:
Job: Korean
Korean
System
System Integration
Integration companies
companies and
and other
other
professional
professional companies
companies intrude
intrude into
into consulting
consulting
markets.
markets.
22

Current Trends of Korean Consulting Industry

3.
3. The
The changed
changed areas
areas of
of Consulting
Consulting Services:
Services:
Clients
Clients need
need the
the total
total consulting
consulting service
service including
including
strategy
strategy establishment,
establishment, process
process innovation,
innovation, and
and IT
IT
applications.
applications.
4.
4. The
The changes
changes in
in the
the competitive
competitive structure:
structure:
Software
Software companies,
companies, System
System Integration
Integration
companies,
companies, accounting
accounting companies
companies (CPA
(CPA firms),
firms),
and
and law
law firms
firms becomes
becomes competitors.
competitors.
23

Current Trends of Korean Consulting Industry

5.
5. The
The preference
preference of
of well-known
well-known foreign
foreign
consulting
consulting firms:
firms: Korean
Korean clients
clients prefer
prefer wellwellknown
known foreign
foreign consulting
consulting firms
firms to
to Korean
Korean
consulting
consulting firms.
firms.
6.
6. The
The growing
growing niche
niche markets
markets developed
developed by
by small
small
Korean
Korean consulting
consulting firms:
firms: Korean
Korean small
small consulting
consulting
firms
firms developed
developed the
the niche
niche markets
markets based
based on
on
client-oriented
client-oriented consulting
consulting strategies.
strategies.
24

Current Specialty of Consulting Firms in Korea

Areas

Strategy
Strategy

Operation
Operation

Specialized Consulting firms

McKinsey, Booz Allen Hamilton, Bain & Company,
The Boston Consulting Group, Monitor & Co., etc.

BearingPoint, AT Kearney, CSC Index, etc.

IT
IT

Accenture, Deloitte, BearingPoint, IBM BCS, etc.

HR
HR

William Mercer, Towers Perrin, Watson Wyatt,

Hewitt Associate, etc.

25

Future Trends of Korean Consulting Industry

Strategy
Focused

McKinsey
Brain & Company
BCG

Nemo
Future
Future
Battle
Battle
Field
Field

Deloitte
Consulting
Accenture IBM BCS

BearingPoint

SDS
LG CNS

Service
Focused
Narrow
Broad

Service
Information Technology

Broad
Narrow

Source: Deloitte & Touche

26

Session 4 : The Strategy in Crosscultural environment

Future Strategy of Korean Consulting Industry

Improved recognition of consulting as an industry
Consulting is recognized as an advertisement tool
rather than a productivity improvement tool and as a
more cost generating factor rather than a profit
generating factor in Korea.
Korean consulting firms will be able to apply the
experience of consulting to the cases of Chinese
companies which are being developed in more similar
manners than well-known big consulting firms.

28

Future Strategy of Korean Consulting Industry

Developing Educational Systems to Improve

Excellence of Korean consultants
The educational systems for consultants need to be
developed to improve the ability of consultants in
Korea.
Universities are joining to the system.

29

Future Strategy of Korean Consulting Industry

Developing Differentiated Consulting Tools

It is very difficult for Korean small consulting firms
to compete with well-known big global consulting
firms.
They have to find out niche markets using
differentiated consulting tools and contents based on
client-oriented strategies.
30

Future Strategy of Korean Consulting Industry

Implementing Infrastructures for Small
Consulting Firms to Share their Knowledge
Increasing Global Cooperation with
International Institutes of Management
Consultants such as ICMCI and APEC CBC
(Certified Business Counselors) for
Benchmarking and Sharing Information and
Foreign Consulting Firms
31

Conclusion
Korean consultants would like to increase the
level of cooperation with Peoples Republic of
China consultants to help improve the
productivity of firms.
Korean consultants will keep maintaining
global cooperation with international
institutes of management consultants such as
ICMCI and APEC CBC.
32

Thank you!
Q&A

33