What deters the buyers of consulting firms?

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During a sell-side process, it is natural to focus on the factors that most attract buyers and attributes that make your firm a good strategic or financial investment. However, it is also important to understand the often pessimistic perspective from the other side of the table – the buyers.

Why? Active acquirers look at hundreds of acquisition opportunities every year. The first time a potential buyer looks at your firm as an acquisition opportunity, they are likely to try to justify a quick “no” to move quickly though their pipeline of potential deals.

Our research and experience has identified the three top factors which deter buyers of consulting firms. Some of them can take years to address, so early identification is key.

1. Poor cultural fit

A poor cultural fit is most likely to deter buyers from making an acquisition. Prolific buyers (those who buy more than one firm a year) in particular recognize the wide variety of integration challenges that most acquisitions present and that stand in the way of the expected benefits.

Cultural fit is a critical factor in realizing the full synergy value of an acquisition, as this is not simply a mechanical integration task. It always involves people from different firms working together toward a common purpose. This is especially true of acquisitions in the consulting sector, where people are the bulk of the assets and in which cultural synergy is highly sensitized.

Unlike other red flags mentioned in this blog, culture is not something that should be tampered with as part of a transaction. Culture is often inherent in a firm. It is significantly influenced by a firm’s leadership and typically lies at the heart of the firm’s success or failure.

2. Diversity of service offerings

For a consulting firm, a strategy of building and maintaining a wide spectrum of services can be a strategy of responding to and profiting from a variety of client issues. However, if you are looking to sell your firm, buyers may not view this positively. From a buyer’s point of view, a broad set of services may dilute their perception of value, as they may see less focus and domain expertise in any one service area, which is an aspect that buyers are in fact most attracted to.

3. Good profits, but no growth

There are often different choices made when operating your firm for sale versus operating for growth. For instance, a growth-focused firm may have the appetite and flexibility to make investments today that consume capital and impact revenue and profits, with the expectation of payoff in improved revenue and/or profits in the future. In contrast, a firm looking to sell will want to show a historic track record of growth and, at the time of going to market, be in a steady growth state with good profit margins. This sets a historic precedent for the forecast future revenues and profits, on which buyers base a value. As such, a firm should ideally sell when prior investments have begun to pay off, as opposed to making new significant investments just before a sale that may temporarily impact revenue and/or profits. Doing this will break the track record of growth that sets the precedent for its future trajectory.

This is important as buyers effectively acquire ownership of a firm’s future profits or cash flows. However, even if a firm is profitable today, buyers will be deterred if there is no precedent for and/or planned future growth.

By identifying the areas that may deter buyers early on, you will be in a position to address these prior to any future sale process. And by addressing these key issues early on, you will maximize the chance of gaining full value should you one day want to sell your consultancy.

If you’d like to find out what deters buyers in more detail, please read the full article here. You need to be a member of Equiteq Edge, but signing up is free and takes only moments here.

Consulting Sector M&A Deals for week beginning 22nd June

businessman doing handstand on the beachErnst & Young (UK) to acquire Integrc (Netherlands)
Deal Size: Undisclosed Industry: IT consulting Date: June 2015
Ernst & Young signed a conditional agreement to acquire Equiteq’s client, Integrc. Integrc is a privately owned, leading provider of governance, risk and compliance (GRC) services to companies that run SAP. Through their award winning RouteONE portfolio, they help clients maximise the value of SAP GRC to improve their business performance. Headquartered in the Netherlands, Integrc operates from a number of locations across the world including the UK, India, the Middle East and Africa. The acquisition will help cement EY’s position as an industry leader in SAP GRC services by further enhancing its end-to-end offering — from strategy to technology implementation. Ernst & Young is a professional services company.

Spada Limited (UK) is to merge with Infinite Public Relations LLC (USA)
Deal Size: Undisclosed Industry: Media consulting Date: June 2015
Spada, the UK’s leading specialist professional services communications consultancy, is to merge with US counterpart, Infinite PR, to create the leading independent global consultancy dedicated to advising professional and knowledge-intensive business services. The merged firm – to be called Infinite Spada – will have offices in London, New York and San Francisco, more than 45 consultants and an initial turnover of more than $7 million (or £4 million). The combination will enable Infinite Spada to service global, as well as national and regional communications briefs. Infinite Spada’s clients will span the legal, real estate, property, infrastructure and construction, corporate, pensions and asset management, accountancy and not-for-profit sectors. The new combined platform will enable the merged firm to deliver the full mix of communications support, including media relations, branding, digital and creative services, business development, research, film, content marketing, crisis management and litigation support.

Accenture (Ireland) is to acquire Brightstep AB (Sweden)
Deal Size: Undisclosed Industry: Media consulting Date: June 2015
Accenture is set to acquire Brightstep, a Swedish digital consulting company focusing on digital content and commerce solutions. The purchase of the Stockholm-based Brightstep will enable Accenture Interactive to offer expertise of professionals trained in digital commerce solutions from Intershop, hybris software and Adobe. Accenture did not disclose terms of the transaction. Brightstep, employing more than 60 people, provides services for digital platform selection, development, implementation and maintenance delivered to companies in the retail, fashion, telecommunications and resources industries. The company, founded in 2001, delivers consulting and implementation work around Adobe Marketing Cloud solutions, including Adobe Experience Manager, Adobe Analytics and Adobe Target. Accenture provides management consulting, technology and business process outsourcing services worldwide. Continue reading

Why do human capital consultancies plateau? Part two – Clients & IP

Targeting clientscropped

Last week we explored the important role a unique value proposition plays in helping human capital consultancies continue to grow, rather than plateauing at a revenue level of $3m, as so many do. This week we’re looking at how to target the right clients for growth and how to create and leverage intellectual property (IP).

After articulating the UVP (Unique Value Proposition) to include some indication of the results and return on investment a client might expect, the leadership team have to get it to the right clients; those where you have the right to win.

To find out where you have the right to win, go through your invoicing file and look at where your business has come from over the last few years. Create a simple matrix: a service/market matrix, like the example below.

Service Market matrix

What are the main industry verticals or affinity groups which have delivered the majority of your revenue and profit? What are your main service offerings? Find the intersecting cells which are strategic for your firm then focus your sales and marketing efforts there. In this way you will be able to drive revenue and growth.

Scaling a human capital consultancy requires a set of codified offerings which a growing team of trainers or consultants can deliver. This could take the form of, among other things, methodology to assess leadership skills, process maps, interview guides, or questionnaires. Having IP that is exclusive to your firm and that can be used by consultants with the same effectiveness, no matter if they are a principal or a new starter, makes you far more valuable to a potential acquirer. In fact, for those of you with aspirations to sell it’s worth having a look at our buyers research report, which shows that after financial stability buyers are looking for deep domain expertise. We are frequently asked to find firms who have a strong inventory of IP.

This IP also needs to be managed; who knows it and who needs to know it? What are the development plans to help the new consultants get up to speed quickly and how will you know if they are effective? This is the very subject you consult on your clients with and, like the proverbial cobbler’s children, it’s too easy to wing it and fall behind within your own firm. The IP you use to deliver your service is a major asset and should be managed accordingly.

If a client were to come to you saying they wanted to get the right UVP, to the right clients with the right IP, you’d do a superb job of building their leadership and organisational capability to deliver. So why not think of yourselves as your own most valuable client and do the same.

If you’d like to discuss any of the issues raised in this blog please contact us.

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Consulting Sector M&A Deals for week beginning 15th June

businessman doing handstand on the beachOMERS Private Equity (Canada) to acquire Environmental Resources Management Limited (UK)
Deal Size: $1.7 billion Industry: Environmental consulting Date: June 2015
Created in 1977, ERM is the leading global provider of environmental, health, safety, risk, social consulting and sustainability related services. ERM works with both private and public sector clients to deliver sustainable outcomes to complex environmental issues, from Board level down through the organisation. ERM has more than 4,800 employees including 600 partners and operates from 163 offices in 42 countries. It advises global and local clients spanning the oil & gas, mining, power, manufacturing, chemicals, infrastructure and pharmaceuticals sectors. ERM’s client base includes 60% of the Global Fortune 500. In recent years it has advised on the environmental and social issues of some of the largest and most complex development projects in the world. The transaction is in line with OMERS’ investment strategy; ERM occupies a market leading position in a sector with strong natural growth characteristics driven by both regulatory and societal change. With a focus on consulting rather than the direct provision of engineering services it has an independence that is highly valued by its clients. Most importantly, in John Alexander and his senior team, it benefits from an outstanding management group with a proven track record of delivering sustainable growth. Environmental Resources Management Limited provides environmental consulting services. OMERS Administration Corp. is a privately owned pension fund.

ManTech International Corporation (USA) acquired Knowledge Consulting Group, Inc. (USA)
Deal Size: Unspecified Industry: IT consulting Date: June 2015
Fairfax-based IT contractor ManTech International Corp. has acquired Reston-based Knowledge Consulting Group for an undisclosed sum. KCG, a cybersecurity advisor for both government and commercial customers, was founded in 2000. It is one of the leaders in cloud security for government agencies. About 200 KCG employees are now part of ManTech’s Mission, Cyber and Intelligence Solutions Group. ManTech says the acquisition will help raise 2015 results. “ManTech is a cyber leader and the acquisition of KCG fits with our strategy of expanding into the growing cyber services and homeland security markets,” said ManTech chief executive George Pedersen. It is the second acquisition this spring for ManTech. In April, it completed its acquisition of former Computer Sciences Corp. subsidiary Welkin Associates Ltd., in Chantilly, for $34 million. ManTech (NASDAQ: MANT) had $1.77 billion in fiscal 2014 revenue, down from $2.31 billion in fiscal 2013. Knowledge Consulting Group, Inc., a cyber security services company, provides risk management, governance, operations, and compliance services for government and commercial sectors in the United States. ManTech International Corporation provides technologies and solutions for mission-critical national security programs in the United States and internationally.

Versatile Communications, Inc. (USA) acquired Kiiro Software, Inc (USA)
Deal Size: Unspecified Industry: IT consulting Date: June 2015
Versatile Communications, Inc. is pleased to announce the acquisition of Kiiro Software, an application services firm specializing in Microsoft SharePoint, business intelligence applications, and various application development services that will assist Versatile’s clients in their IT Cloud Transition strategy. As David Cote, Versatile’s President, explains, “As our clients seek the balance between on-premise and cloud compute environments, our organization continues to deliver on its commitment to diversify its portfolio of services. Kiiro provides Versatile with the ability to help clients in many key areas including: Enhancement of end user facing applications like the Microsoft SharePoint Platform and Salesforce.com; Custom development projects utilizing .NET, LAMP, modern web and mobile technology development; Integration of leading edge premise and cloud infrastructure services like OpenStack and the entire HP Helion portfolio.” Versatile is a full-service IT solutions provider with particular expertise helping organizations achieve the best business outcomes by striking the right balance between on-site IT and the cloud, offering a comprehensive suite of managed and professional services. Kiiro Software is a leading consulting firm providing solutions and products based on the Microsoft SharePoint Platform. Continue reading

Why do human capital consultancies plateau? Part one – UVP

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We all know the saying, “Do as I say, not as I do.” And often businesses fall victim to this too, whether it’s the IT consulting firm with out-of-date IT systems, or the management consulting firm with a vague strategy for its own growth. But what about human capital consultancies? Do they have superior leadership abilities which allow them to grow in ways others can’t? Or do they fall victim to the same habit of not using their own core competencies internally?

This week, in the first of a two part series, we’ll be looking at how human capital consultancies can develop their unique value proposition (UVP). Next week we’ll examine how to target the right clients to help your consultancy grow and the important part intellectual property (IP) plays.

Organizations are dealing with huge changes in the composition of their workforce. Baby boomers are leaving or looking for reduced, flexible working, millenials are arriving with different motivations for working and by 2020 there will be five generations working in the same workforce. This leaves businesses with big talent challenges to manage, as well as their day job of selling more products or services.

You’d think all that change would create fast growing human capital consulting firms, with strong sales, profit growth and equity value. Unfortunately you’d be wrong as only about 50% get past the first stage of growth, the rest plateauing around the $3m revenue mark.

So what’s the problem and how do you make sure your firm is one of the 50% that breaks through this first glass ceiling to grow equity value? The key is to get the right UVP, to the right clients, with the right IP.

This is Equiteq’s 8 levers of equity value, which was can use to highlight the levers in human capital firms which typically drive equity value up and those which drag it down.

EQUITEQ_WHEEL_RGB

Human capital firms usually score well on the east west axis, with consultant loyalty and client relationships driving equity value up. However market proposition, sales and marketing and IP frequently drag equity value down.

The UVP has to answer the exam question ‘Why should I buy from you?’ and this is where human capital consultancies are missing a trick. The Kirkpatrick Phillips model (pictured below) is used for evaluating human resource development and training.

Measuring training V2

(http://www.gosignmeup.com/kirkpatrick-phillips-model/)

Because an overwhelming majority of participants said they liked their day out of the office in training for example (Kirkpatrick Phillips level 1) doesn’t put you in the running for bigger, more profitable contracts. For the CEO of an organization you are targeting this is not a compelling reason to invest in human capital consultancy work. What’s needed is to move up the pyramid and demonstrate the return on investment that the work provides.

Yes, it’s tougher in human capital firms than say, IT consulting firms, to measure the outcomes, but the leadership team have to create a UVP aligned with their clients’ pain points and produce measureable results. The higher up the pyramid the better. Consultancies typically diffuse their offering too broadly. It’s better to focus on a niche offering and do it well. In fact, buyers of consultancies have told us that they prefer niche offerings when they are assessing whether to acquire a firm.

Next week we’ll look at how to target the right clients to grow, as well as the important role IP plays.

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Consulting Sector M&A Deals for week beginning 8th June

businessman doing handstand on the beachiomart Group plc (UK) acquired SystemsUp Limited (UK)
Deal Size: $19 million Industry: IT consulting Date: June 2015
iomart, the cloud computing company, is pleased to announce that it has acquired the entire issued share capital of SystemsUp on a cash-free/debt-free basis with normalised working capital. SystemsUp is a London consultancy specialising in the delivery of IT transformation using Public Cloud. It boasts a range of expertise in the design and delivery of public cloud solutions and is a G-Cloud partner to Google, an authorised Government Partner to Amazon Web Services and a Microsoft Gold Partner. Angus MacSween, Chief Executive stated: “The market for cloud computing is becoming incredibly complex and the demand for public cloud services is increasing at pace. With the acquisition of SystemsUp, iomart has broadened its ability to engage at a strategic level and act as a trusted advisor on cloud strategy to organisations wanting to create the right blend of cloud services, both public and private, to fit their requirements.“

World Wide Technology, Inc. (USA) acquired Asynchrony Solutions, Inc. (USA)
Deal Size: Unspecified Industry: IT consulting Date: June 2015
Asynchrony, Inc., a technology consulting firm specializing in application development, mobile computing, systems and sensor integration, enterprise architecture, and tactical collaboration has been acquired by World Wide Technology, Inc., a market-leading technology integrator, from Schafer Corporation. As a part of World Wide Technology (WWT), the newly named Asynchrony Labs now offers enterprises a single provider that understands both the infrastructure and application side of technology initiatives; and the needs and concerns of both IT departments and lines of business. “This brings great value to both our employees and our clients,” said Bob Elfanbaum, Asynchrony co-founder and General Manager, Asynchrony. “A growing number of our customers need user-facing software solutions that integrate with complex back-end infrastructure. On demand access to WWT’s Advanced Technology Center (ATC) and engineers will let us innovate on both levels throughout an entire project.” WWT Asynchony Labs, a technology consulting firm, specializes in application development, mobile computing, systems and sensor integration, enterprise architecture, and tactical collaboration. World Wide Technology, Inc., a systems integrator, offers technology and supply chain solutions to federal government, state and local government, education, telecommunications, healthcare, retail, utilities, and oil and gas customers and suppliers worldwide.

NTT DATA, Inc. (USA) to acquire Carlisle & Gallagher Consulting Group, Inc. (USA)
Deal Size: Unspecified Industry: Management consulting Date: June 2015
NTT DATA, Inc., a leading IT services provider, announced it has signed a definitive agreement to acquire Carlisle & Gallagher Consulting Group (CG), a business and technology consulting firm that exclusively focuses on the financial services industry. Combining the two firms will strengthen their ability to provide a full set of lifecycle consulting and IT services that can address complex business issues and deliver strong business outcomes specifically for financial institutions in North America and around the world. CG is a leading financial services consultancy with a unique blend of industry expertise in consumer and commercial banking, wealth management and capital markets as well as proven consulting experience that delivers results. This expertise, coupled with NTT DATA’s broad technology depth, innovation and global reach, provides clients with a business partner that can help them adapt to changing market dynamics and implement business-based technology solutions that can drive growth and cost efficiencies. Carlisle & Gallagher Consulting Group, Inc. provides management and technology consulting, and complex technology solutions to the financial services industry in the United States. NTT DATA, Inc. provides information technology (IT) services. Continue reading

Equiteq’s Global Consulting M&A Report – A geographical overview

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Our Global Consulting M&A Report explores every aspect of M&As in the consulting sector. This week we’re taking a closer look at how different parts of the world compare.

North America

Globally, consulting activity reached a nine-year high in 2014, with an increase of 21%. As the largest market for consulting M&A, North America’s ongoing economic improvements are affecting this trend.

Looking at the North American market, 93% of acquisitions took place in the United States and 7% in Canada. After a sluggish 2010-2013 period, the US economy gained momentum and demonstrated strong economic growth in 2014. Well performing equity and credit markets, increased consumer confidence, low borrowing costs and companies’ high cash reserves positively affected M&A activity in the region.

Europe

In 2014, European M&A volumes increased by 7.4%, despite year on year deal volume declines since 2011. Despite this, deal value trends are rising for European consulting firms.

The optimism about Europe’s growth was being challenged by Russia’s military intervention in Ukraine and Europe’s sanctions against Russia, as well as an increasing threat of deflation in the western countries. In 2014, M&A activity was driven by the three largest European M&A markets: the United Kingdom (43%), France (14%) and Germany (11%). The strong economic performance in the UK was reflected by an 8.9% increase in the deal activity compared to 2013. The largest percentage increase in M&A activity was recorded by France, a 47.4% jump over 2013. The number of German transactions climbed by 25.7% from 66 deals in 2013 to 83 in 2014. From the next top seven countries, only the Netherlands saw an increase in deal activity when comparing 2013 to 2014.

Asia Pacific

After a steep period of growth in deal volumes from 2009 to 2011, Asia Pacific consulting deals have stabilized at approximately 300 deals per year. The effect of slowing growth in China was balanced by strong activity in the Australian market.

The region’s two largest M&A markets, Australia and China, grew by 9% and 5% respectively in 2014. The strengthened deal activity in Australia is a result of strong demand, improved confidence and stabilized valuations. And as competition has been increasing in China, we have seen rising consolidation in the domestic economy.

On the other hand, Japan and India slowed down in 2014. Stagnant economic growth and demographic problems continue to hinder Japanese deal activity, with a 13% drop compared to 2013. And a stringent regulatory environment and depreciating rupee has led to 4% fewer transactions in India.

Africa and the Middle East

In 2014, consulting deals in Africa and the Middle East were up 74% compared to the lowest point in 2010. They were just 12% shy of the nine year high in 2007. However, uncertainty across many regions cast doubt on the sustainability of the upward trends in deal volumes and values.

The region is a relatively small proportion of the global M&A consulting market, with an average of 2.3% of total deals a year. It is being driven by South Africa, with 45% of total deals.

South America

After a sharp drop in 2013, the deal volumes started to recover with a 19% increase in 2014. A slowing Brazilian economy is likely to have a negative effect on M&A in the region going forward.

Strong growth in Brazil was the main driver in the region’s recovery. On average, 51% of total yearly deals take place in Brazil, this rose to 65% in 2014. In Brazil the number of deals increased by 42% from 26 in 2013 to 37 in 2014.

If you’re interested in a more detailed analysis on any of these areas, more information can be found in our full report. To download a copy you need to be a member of Equiteq Edge – registration takes only moments here.

Consulting Sector M&A Deals for week beginning 1st June

businessman doing handstand on the beachDeloitte Touche Tohmatsu (Australia) acquired Dataweave Pty Ltd (Australia)
Deal Size: Unspecified Industry: IT consulting Date: June 2015
Professional services giant Deloitte Australia has made another acquisition to boost its consulting business, swallowing up Sydney Oracle specialist Dataweave ahead of the big four firm’s annual results announcement later this month. Cindy Hook, chief executive at Deloitte, said “every part of the practice has grown this year but the headline numbers are really coming from consulting and risk advisory”. Dataweave is Deloitte’s fourth technology buy in the past 12 months. It will add 40 staff, including Dataweave managing director Norman Weaver, to Deloitte’s consulting practice, reporting to former Bearing Point boss Robert Hillard, who was put in charge of Deloitte’s consulting arm in February as part a leadership shake-up. Robert Hilliard, Deloitte Consulting managing partner, says the addition of Dataweave’s team to Deloitte’s ‘brings together exactly the capabilities that Australian business and government are looking for to support their business transformation goals and deal with changing markets, technology and client expectations’. Dataweave Pty Ltd provides Oracle licensing, hardware, implementation, consulting, and managed services in Australia, New Zealand, and internationally.

Sweco AB (Sweden) to acquire Grontmij NV (Netherlands)
Deal Size: Unspecified Industry: Engineering consulting Date: June 2015
Swedish consultant Sweco has reached a conditional agreement to buy all the shares of Grontmij of the Netherlands. The combined consultancy will have approximately 14,500 employees with an annual total turnover of approximately €1.7bn (£1.2bn). The offer was unanimously recommended by the executive board and the supervisory board of Grontmij and has been supported by major shareholders of Grontmij and the two largest shareholders of Sweco. The two companies see themselves as having a near-perfect fit, geographically, operationally and culturally. They have a complementary geographic footprint and a similar governance model and culture. Grontmij will add new major markets to Sweco, while Sweco will give Grontmij further access to the Nordic market. There are estimated annual synergies and operational improvements of €27m, of which 90% is expected to be realised in the first four years after settlement. Sweco CEO Tomas Carlsson said: “Combining Sweco and Grontmij will create great value for all parties involved. Sweco has a solid track record of continuous operational improvements. In terms of growth, Sweco has consistently shown its ability to successfully grow through mergers. Now that our latest large acquisition, from 2013, has been very successfully integrated, we are ready to take the next step on the European market. Sweco and Grontmij are an ideal combination, since we share the same expertise and commitment to our customers. Together with Grontmij, we aim to become a recognised industry leader in Europe.” SWECO AB (publ) provides various services in the fields of consulting engineering, environmental technology, and architecture worldwide. Grontmij N.V. provides consultancy, design and engineering, and management services in various market sectors related to the built and natural environment.

Willis North America, Inc. (USA) acquired Evolution Benefits Consulting (USA)
Deal Size: Unspecified Industry: HR consulting Date: June 2015
Willis North America, a unit of Willis Group Holdings plc, the global risk advisory, re/insurance broking, and human capital and benefits firm, announced the acquisition of Evolution Benefits Consulting, a Malvern, PA.-based strategic health and welfare benefit advisory firm. Founded in 2001, Evolution Benefits Consulting specializes in providing cost-effective, strategic health and welfare benefit advisory services to employers across various segments including education, government, health care, financial services, manufacturing and religious organizations. As part of the transaction, Evolution Benefits Consulting will merge its operations with Willis of Pennsylvania, Inc. and serve clients under the Willis brand. All of the firm’s employees including principal owners Jim DiGuiseppe, Michael Lilley and David Chisholm will join Willis. Commenting on the acquisition, Jim Blaney, CEO, Willis Human Capital Practice said, “We’re thrilled to have the team from Evolution join our Human Capital Practice. They have a fantastic reputation that complements our strong brand. This acquisition supports our investment in the human capital space where we are committed to delivering industry-leading and specialized capabilities and consulting.” Willis North America, Inc. provides risk management, insurance brokerage, and related risk services to customers in various industrial segments in the United States, Canada, and Mexico. Evolution Benefits Consulting, LLC operates as a health care and group benefits consulting company. Continue reading

Building talent for growth through flexible working – Part two

Flexible working crop

In a previous blog from flexible recruitment specialists Capability Jane, they examined how the world of work is changing. This week they’re looking at five ways in which flexible working can benefit smaller to mid-sized consultancies.

1. The labor market demographic is changing

As the labor market demographic changes so too do the needs and desires of the workforce. For non-millennials (those born before 1980), control over work, development opportunities and pay are the key drivers for work satisfaction. Millennials on the other hand (born after 1980) have different requirements. As they invariably work with less job security, retire later and do so with or without a pension, their attitudes to work have changed significantly.

PwC’s recent global generational study found that millennial employees are unconvinced that excessive work demands are worth the sacrifices to their personal life. Millennials value work/life balance and they place a high priority on workplace culture. The bigger consultancies now make sure that flexible working is a key part of their attraction and retention strategies. In fact, most millennials are not looking to work flexibly when they join a new consultancy, they just want the option to be available later on in their career. Flexibility in where they work and how much they work is a key driver in maintaining millennial satisfaction and it does not just need to be the preserve of big, global companies. We are increasingly seeing smaller and mid-sized consultancies embracing flexible working to the benefit of both staff and clients.

2. Greater retention of staff

An employee survey carried out for CIPD by Kingston University and Ipsos MORI found that workers on flexible contracts tend to be more emotionally engaged, more satisfied with their work, more likely to speak positively about their organization and less likely to quit. A happy workforce is key to retaining staff and offering flexible working helps employees to strike a comfortable work-life balance whilst ensuring that out of work factors, such as children or caring for family members, don’t interfere with work commitments.

3. Increased productivity

Many studies have shown a causal link between productivity and flexible working. Being able to manage one’s own time and work when inspired or unencumbered with other tasks can greatly improve efficiency and the quality of work. Smaller consultancies often pride themselves on their agility and not being as heavily encumbered by processes as huge organisations and flexible working can be another string in the bow of their offering.

Clients are also aware of these benefits. An MCA survey found that a third of clients involved in purchasing management consultancy services said that knowing a consultancy had a flexible working policy for their staff made them more likely to purchase from that consultancy.

4. Meeting customers’ needs when operating in a global or 24/7 marketplace

In the global business place the market never stops. Somewhere in the world there is always someone looking to do business. Can you afford to miss out on any business opportunities due to the 9-5 working day? Consultancies have to be particularly flexible and ready to meet client needs at any time of the day. Offering flexible working can help your workforce to meet your customers’ needs 24 hours a day, seven days a week. The rise of job sharing has come about, in part, to deal with the needs of clients in the global marketplace. By putting the right structure in place, documenting everything and communicating clearly, two people can easily share a customer-facing job. This ensures an employee is always contactable and ready to help.

5. Savings on overheads

Offering flexible working in the form of homeworking can make a real impact on the bottom line of smaller to mid-sized consultancies by reducing the amount spent on renting office space and energy costs. Whilst there may be an initial start-up cost to setting up working from home solutions, over a short space of time the benefits will far outweigh the initial outlay. Imagine the savings if the majority of your workforce could work from home. Even larger consultancies often only provide desk space for 80% of their employees and set up hot desks to ensure that desk space is not wasted. That could mean the difference between a good business and a great business.

These five areas are just the tip of the iceberg when it comes to the benefits that consultancies of any size can enjoy from offering flexible working options. As technological advancements continue to make flexible working an ever more attractive option and the demand from workers increases, flexible working is fast becoming the norm for consultancies. This trend is set to continue and there has never been a better time to consider flexible working options.

Capability Jane helps innovative and flexible organizations source talented executives on a flexible, part-time or job share basis and access a more diverse pool of candidates. 

Consulting Sector M&A Deals for week beginning 25th May

businessman doing handstand on the beachMulti-Strat RE Ltd. (Bermuda) acquired Annapolis Consulting Group (USA)
Deal Size: Unspecified Industry: Business consulting Date: May 2015
Multi-Strat Holdings Ltd. announced the acquisition of the entire business assets of the Annapolis Consulting Group LLC [ACG], an international consultancy business providing reinsurance and finality solutions for captives and corporate self-insureds. ACG specializes in the resolution of costly legacy claims and captive run-offs. The combination of ACG’s expertise and MultiStrat Re’s underwriting and capital capacity will provide captives, corporate self-insureds and other insurance companies with liquidity, growth, collateral relief and closure solutions for a wide variety of prospective and legacy claims portfolios. Bob Forness, MultiStrat Re’s CEO, commented “MultiStrat is excited to welcome the ACG team to our group of specialty reinsurance and advisory services companies. ACG’s expertise, knowledge and relationships will be essential to MultiStrat Group’s design and delivery of cost effective risk protection, capacity and legacy solutions for the captive market. ACG will be MultiStrat’s first US-based business, and the addition of ACG’s legal, claims, auditing and runoff acumen will add significantly to our overall capabilities.” Annapolis Consulting Group LLC provides reinsurance and exit strategies for captives and corporate self-insureds. Multi-Strat RE Ltd. provides reinsurance services to buyers in Bermuda.

BearingPoint Europe Holdings B.V. (Netherlands) acquired Magenta Advisory Oy (Finland)
Deal Size: Unspecified Industry: Management consulting Date: May 2015
Management and technology consultancy BearingPoint has acquired Magenta Advisory, the leading independent management consultancy for digitalization of businesses in the Nordics. Magenta Advisory helps organizations create digital advantage and works with clients ranging from global multinationals to top local companies across a spectrum of industries, such as finance, high tech, telecommunication, media and retail. With this acquisition, BearingPoint expands its offerings in the area of digital transformation and accelerates growth in the Nordic region. “Digital is one of the most important elements of our firm-wide strategy that goes beyond the typical boundaries of industries, service lines, and countries. The acquisition of Magenta Advisory strengthens our digital transformation capabilities and furthers our aim of making our clients more competitive and better positioned for the future. We are very excited about the growth opportunities this new acquisition opens up for us in the Nordics and firm-wide,” says Peter Mockler, Managing Partner BearingPoint. “For Magenta Advisory, this is a logical next step in continuing our rapid growth as the leading independent digitalization management consultancy in the Nordics,” says Markus Huttunen, Managing Director of Magenta Advisory. “Our clients will benefit from even stronger consulting services backed by BearingPoint’s strong industry and technology expertise as well as scale in delivering digital transformation assignments. This will also bring new professional development opportunities for our consultants in a global environment. The company founders, including myself, are thrilled about this development and are eager to move the business forward!” Magenta Advisory Oy provides management consulting services for digital businesses. It offers strategy development, customer journey design, data and analytics integration, and communication and marketing automation services. BearingPoint Europe Holdings B.V. provides management and technology consultancy services globally.

FTI Consulting (USA) acquires Global VAT Compliance (Netherlands)
Deal Size: Unspecified Industry: Financial advisory Date: May 2015
The addition of Global VAT Compliance, based in The Hague, Netherlands, further strengthens FTI Consulting’s tax advisory practice, and complements the existing corporate tax work it undertakes in the UK and across the world through the WTS Alliance. Global VAT Compliance provides international VAT advice and reporting services to medium-sized and large multinational companies, covering every aspect of VAT compliance including registration, representation and reporting. Marvin Rust, head of the European tax advisory services at FTI Consulting EMEA said, ‘We are delighted by this acquisition, which will play a central role in our growth strategy. ‘The addition of Global VAT Compliance’s centralised processes and state of the art technology enables us to offer the full range of VAT and tax services, and further enhances our offering to our clients who seek a real alternative to the Big Four.’ FTI Consulting, Inc. operates as a business advisory firm enabling organizations to protect enterprise values in complex economic, legal, and regulatory environments worldwide. Continue reading