Guiding companies to succeed in borderless market

Guiding companies to succeed in borderless market

I. Christianto
Contributor
Jakarta

The trade globalization trend has seemingly turned the world
into one single market with a product from one place to other
parts of the world flowing freely without going through
significant barriers.

Despite offering growing business opportunities, the expanded
market has, however, posed a fiercer competition to business
players.

In such a situation, having a good product is no longer
enough. A company should also be backed with a good marketing
strategy, skillful human resources and reliable technology.
Otherwise they will become the losers.

In facing such a difficult situation, internal resources are
no longer sufficient in making a company more competitive and
more efficient and more profitable. This is why many companies
have turned to consulting companies to help them ride the
borderless business world.

Consulting firms offer a wide range of services to help their
clients. The advice includes internal organizational development,
restructuring, skill training, human resources, IT development
and problem solving.

In more macro fields, the consulting firms also provide advice
to reduce risks resulting from political uncertainty or in facing
the global competition.

Many consulting companies also offer advice on specific issues
such as in helping corporate clients to avoid bankruptcy, debt
restructuring, capital optimizing plan, product development,
recruiting qualified staff and investigating business rivals.

Consulting companies' executives acknowledge that the demand
for consulting services has been growing rapidly in recent years
as many companies, either small or large, have realized that
being smart is one of the key factors in achieving their business
goals.

The fact that seeking assistance from professionals would
enable them to significantly cut costs rather than if they hired
special personnel to carry out the job.

"This is one of the reasons why the consulting business is
growing," says Yanti Munthe, a consultant of PT AchieveGlobal
Indonesia (AGI).

In many aspects, outsourcing is cheaper and better for the
clients. Besides, the length of the works could be reduced to as
minimal as possible, the works of professional consultants will
be more accountable especially to those which require
transparency and impartiality.

A marketing executive of PT Magnus Indonesia, Rizky
Sewaka, says orders for consulting services had not only came
from large business companies but also from small and medium-
sized businesses.

Although the scope of consulting services given to such
companies are much smaller either in terms of value or volume,
their presence has had a significant impact on the country's
consulting business.

"The trend is very encouraging. This has also encouraged
consulting firms to prepare and arrange special consulting
packages suitable for small and medium companies," he adds.

The more diversified demands has also led to the creation of
several market segments for consultants. Many consultants offer
various consulting services ranging from formulating a marketing
strategy to massive corporate restructuring. Some others provide
research services.

Good consultants are those who are able to help uncover new
strengths and potential. They usually carry out diagnostic
approaches in order to give their clients a clear picture of the
company's operation and organization.

"The clients need our service because we help them to
formulate a strategy that will enable them to achieve their
business goals," Yanti says.

In addition, with the help of professional consultants,
clients will be able to apply the best business practices
commonly found in the business world.

AGI provides human resources consulting services including
training in the area of service excellence, sales performance,
leadership and organizational effectiveness, assessment and
cross-cultural effectiveness.

AGI, located on Jl. Gatot Subroto, serves its clients
in performance, results-oriented training and human resources
development, she added.

"Our clients come from the banking sector, consumer goods,
survey and research, oil and gas, heavy industry and IT."

AGI is part of the Florida-based AchieveGlobal, a leading
consulting group that specializes in helping clients to, among
other things, clarify business strategies and transform strategy
into implementation plans.

"The most-wanted services sought by my clients are the
expertise in bringing the method, building capacity, implementing
the program and keeping the skill alive. The current trend is in
the area of sales competency and organizational effectiveness,"
Yanti says, adding that most clients seek help because they lack
the experts to accelerate the process.

According to her, AGI serves approximately 250 clients yearly,
while fees would depend on the scale of the projects. Clients are
mostly multi-national companies (MNCs) and some local large
companies.

"We are small but efficient. Our consultants are postgraduates
and have been assigned in management positions prior to their
current assignments.

"The number of our consultants in Indonesia at the moment is
five. However, since we operate in 70 countries, if needed, we
can seek help from other regional and head offices," she says.

Unlike AGI, Mignus Indonesia specializes in IT-based services.

"Magnus Indonesia, affiliated with the Holland-based
Magnus, helps clients improve their business performance through
IT consulting, systems integration, implementation and systems
management," he says.

Magnus Indonesia, founded in 1996, also offers a full range of
services and has a dedicated in house software design and
development department.

"We offer Enterprise Resource Planning (ERP) which is
adaptable based on the business and system applied by each
client," he says.

There are dozens of international consultancy firms
operating in Indonesia. The number of local consultants
has also grown.

Each consulting company has a different tariff in charging
their clients. But they most charge their clients between
US$500,000 and $2 million depending on the scale of the works.

The main clients of such big consulting firms are mostly MNCs
or large Indonesian business corporations, including state firms
and those which have international affiliations.

Business consultancy which covers, for example, privatization,
debt restructuring, human resources and organizational
development with an average fee of between $2 million and $3
million for each assignment for larger firms. The figure,
however, will depend on the "brands", images and reputations of
the consultants.

There are usually two types of payments charged by business
consulting firms, namely retainer fees and success fee. Retainer
fees is a fixed rate negotiated between the firm and client. The
fee will be paid on a regular basis such as weekly or monthly,
based on the contract. A success fee is usually available per
case, for instance when the consultant is successful in clinching
an acquisition, merger or take over for the client.

But there are many factors that determine the fee, which
depends on the complexity and type of contract. Consultation for
strategy is so different from consultation for technology
implementation. Other consulting firms will agree to negotiate
based on the complexity and period of contract. The fee will also
vary according to the deployed consultant, whether she
or he is a senior or junior specialist.