Buying Consulting Services In Asia
With many companies focusing on emerging markets as their source of growth for the next decade, consultants are one of the resources they will probably utilize to capture these growth opportunities. However, buyers of consulting services for, or in, Asia need to be aware that as in many other aspects, Asia is different!
Consulting is an immature industry in Asia
Organizations use consultants because the right consultants, engaged for the appropriate reasons and managed effectively can assist the organization to achieve greater levels of performance. However making sure that the expected value is actually delivered requires a lot more than good intentions. This is especially true in Asia where it is often difficult for organizations to source capable and qualified consultancies. While the consultancy industry is a mature one in the developed markets of the UK, most of Europe and the US, it is still in its nascent stage in Asia. The breadth of capability and depth of experience of consulting firms, even the global ones, in Asia is a fraction of that available in Western markets.
Building a consulting practice in Asia is challenging
Experienced executives in Asia know that it takes many years to truly understand the nuances and practical realities of building a business in each different country, particularly in the services industry. Building consultancies is even more difficult because the knowledge, techniques, and approaches of the consulting craft must be imparted to suitably qualified individuals across the strata of the consulting pyramid of senior managers, managers, senior consultants, consultants, and analysts. This is not a straightforward endeavor. Success depends on having a core team of experienced consulting partners who have invested the necessary years in consulting in Asia (either local hires or expatriates) and who are committed to remain in Asia to coach and mentor the consultants in their often rapidly-growing practices. Such consulting partners have been rare in the Asia operations of the global consulting firms. Due to the frequent rotation of consulting partners, loyalty to a firm has not been engendered at the consultant level, resulting in high staff mobility between firms fueled by the attraction of an instant promotion or salary increase. Thus local consultants often carry titles that are not justified by their cumulative client experiences and level of skills, but are nevertheless charged out at hourly rates that are at least one scale higher than those for comparable resources in Western markets. Further, consultant training programs are often an ineffective tool for developing strong local consultants because programs devised in the west are seldom adapted to acknowledge Asian approaches to learning, education and training, let alone to incorporate Asian business culture norms for how expertise is applied and change is facilitated, or for human interaction and communications. Compounding the challenge is the significant diversity of language and cultural in Asia that prohibits the development of a regional pool of consultants to be mobilized to apply the right expertise to clients in which ever country it is needed. Thus, the fortunes of consulting practices in Asia often rise and fall in three to five year cycles, synchronized with the tenure of Western expat consulting partners seconded to the region. Certainly most consulting firms have not been able to achieve a capability level in each Asian country that is consistent with their capability in Western markets. Asia-based clients of consulting firms should be careful that they are not paying for the learning curves and mistakes of ‘new-to-Asia’ consulting partners and fledgling consulting practices. That consulting firms are lagging behind their clients in establishing themselves Asia is part of the problem – instead of already having local knowledge and experience to provide to their clients, they are more likely to be learning on the job as they scramble to assemble teams to meet the requirements of their clients who are already operating in Asia. Yet executives are often convinced by the sales pitches of partners representing familiar Western brands, slick presentations by fly-in experts, logo-intense qualification statements, and reassurances that they can trust the global firm, and fail to assess the real on-the-ground capability.
Buyers must assess individual consultant capability
A buyer of consultancy services cannot assume that just because a consultancy has performed projects successfully for the organization in London or Paris, that the same consultancy will have equivalent capability in Asia. For example, buyers must learn to recognize when proposals presented to them are simply cut and paste exercises (borrowed from proposals and deliverables created in Western markets) without any depth of local knowledge and capability. And they must question the team’s capability if, during the proposal process, almost all the talking is done by the partners or fly-in subject matter expert—this is usually a sign that few members of the proposed project team (the people who will bill the majority of hours and fees) have actually worked on a similar assignment. Given the country, cultural, and language diversity in Asia, it is the individual consultants rather than the brand that will determine project success. Therefore anyone hiring consultants needs to invest the time to meet the actual team members to understand how relevant their experience is, and to verify that they are indeed available for the time commitment promised. Given the scarcity of consulting talent in Asia, buyers need to make sure that the resources promised are contractually committed to the project for the required duration and that the consulting firm cannot replace or substitute resources at will.
Proactive effort is required to extract value from consultants
Consulting buyers in Asia must carefully define the roles where consultants can truly add value, learn to identify which specific consulting resources have the necessary expertise, be creative in configuring an integrated team of internal and external resources (sometimes from multiple sources), and actively manage the consultants to deliver a well-defined business outcome, recognizing that approaches to using consultants, and indeed which consultancy can deliver, may vary from country to country in Asia.
For anyone planning to hire consultants in Asia, it is very much buyer beware.
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