Accenture Completes Acquisition of Corliant, Expanding Enterprise Networking Services and Capabilities

NEW YORK–(BUSINESS WIRE)–Accenture (NYSE: ACN) has completed its acquisition of Corliant, Inc., a privately held technology consulting firm that helps clients deploy and support advanced Internet protocol (IP) networks.

Providing Accenture with specialized skills, methodologies, tools and Cisco-specific network technology expertise, Corliant strengthens Accenture’s networking services and enhances Accenture’s capabilities and market presence in the network technology space.

“This acquisition helps Accenture strengthen our networking services and skills, particularly around implementing advanced, next generation IP network solutions for our clients,” said John Kaltenmark, head of Accenture Technology Consulting. “Accenture’s experience combined with Corliant’s Cisco-based technology specialists will enable us to help our clients achieve high performance.”

The transition of Corliant’s approximately 150 employees to Accenture will enable the company to meet growing client demand for networking consulting services.

Terms of the deal were not disclosed.

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New Global Challengers Pose Growing Threat to Established Industry Leaders, According to a New Report by The Boston Consulting Group

SOURCE: The Boston Consulting Group

17 Companies Join The Boston Consulting Group’s List of 100 Emerging Giants in This New Edition for 2008

The 2008 BCG 100 New Global Challengers List Includes 17 New Entrants

NEW DELHI, INDIA–(Marketwire – December 3, 2007) – Companies from rapidly developing economies (RDEs) are globalizing so quickly that they pose an urgent threat to industry leaders, The Boston Consulting Group (BCG) warns in the second edition of its report on 100 of the most formidable companies from RDEs. The report — titled “The 2008 BCG 100 New Global Challengers: How Top Companies from Rapidly Developing Economies are Changing the World” — is being published today.

The BCG New Global Challengers list comprises 100 companies that are growing fast, globalizing aggressively, and reshaping global industries. With over $1.2 trillion in total revenues(1) and more than a half trillion dollars in yearly purchases, the BCG New Global Challengers are already formidable. But their ambitions are daunting — according to the report, their combined revenues will reach $3.3 trillion by 2010 and a massive $11.8 trillion by 2015. Meanwhile, hundreds more RDE-based companies will gain critical mass and launch global expansions as well.

“Industry leaders need to understand these new rivals and act quickly,” urges David Michael, the report’s coauthor and a Beijing-based BCG senior partner. “For those who move fast, the challengers could become key clients, suppliers, and even strategic partners. For those who don’t, the challengers will represent fierce competition and, in time, become potential acquirers.”

By many measures, the BCG 100 New Global Challengers are already outperforming established industry leaders. In the past five years, the Challengers grew revenues faster than the S&P 500 — in fact almost three times as fast since 2004 — earned a higher average return on sales, and created far more shareholder value. “The challengers are increasingly looking for acquisitions abroad,” said report coauthor and BCGBCG partner Arindam Bhattacharya. “In 2006 they completed 72 outbound acquisitions, up from 21 in 2000. The average size of these transactions grew from $156 million in 2001 to $981 million in 2006.”

“Executives at established industry leaders might not be able to pronounce the names of many New Global Challengers,” commented Michael, “yet it is essential for every executive to develop clear strategies for dealing with this group of huge and ambitious companies. Never before have so many potential competitors and customers arisen so quickly on a global scale. Moreover, the challengers have completely different approaches to competition, taking advantage of their bases in emerging markets. Many established industry leaders are frankly unprepared for these new types of competitors. They are also unprepared to capitalize on the sales-growth opportunities presented by selling to these companies.”

Of the 100 companies on BCG’s list, 41 are from China, 20 from India, and 13 from Brazil, with the rest coming from 11 other rapidly developing economies. In this edition of the report, 17 companies appear on the list for the first time, as they break into the ranks of the leading challengers entering the global stage. Notable newcomers to the 2008 list include Grupo Bimbo of Mexico, Nine Dragons Paper Holdings and Sinomach of China, Suzlon Energy of India, Tenaris of Argentina, Marcopolo of Brazil, and Inter RAO UES of Russia.

The full list, which is part of the report published today, is the result of careful screening of more than 3,000 companies from all of the world’s major RDEs. The screening was based on companies’ total revenues, their share of overseas revenues, and their degree of global ambition. (See Appendix B for the full list.)

To order a copy of The 2008 BCG 100 New Global Challengers go to: http://www.bcg.com/impact_expertise/publications/request_form.html?report=global_challengers_2007

The report’s authors are Marcos Aguiar (Sao Paulo), Arindam Bhattacharya (New Delhi), Laurent de Vitton (Beijing), Jim Hemerling (San Francisco), Kim Wee Koh (Singapore), David C. Michael (Beijing), Harold L. Sirkin (Chicago), Kevin Waddell (Warsaw), and Bernd Waltermann (Singapore).

(1) Figures from 2006, the most recent full financial year data available for comparison

About the Methodology for Selecting the 2008 BCG 100

Produced by BCGBCG’s Global Advantage practice, the report — “The 2008 BCG 100 New Global Challengers: How Top Companies from Rapidly Developing Economies are Changing the World” — is based on a detailed screening of more than 3,000 companies from RDEs. First, the BCG research team ensured that the candidate companies were truly RDE-based. Next, it homed in on large players — generally those with $1 billion in sales or greater. Finally, it looked at three years of financial data and scored the remaining companies using five globalization criteria: international presence of the company; major international investments pursued in the past five years; the company’s access to capital for financing international expansion; the breadth and depth of its technologies and intellectual property; and the international appeal of its offerings and value propositions.

APPENDIX A. The new Challengers

The 17 additions to BCG’s 100 New Global Challengers list are

 

• Changhong Electric, a Chinese home appliances company (2006 sales, $2.4 billion)
• Chery Automobile, China’s leading exporter of cars (sales, $2.6 billion)
• COFCO, China’s largest manufacturer, importer, and exporter of oils and food (sales, $17.9 billion)
• CSAV, a global top-ten shipping carrier based in Chile (sales, $3.8 billion)
• CSIC (China Shipbuilding Industry Corporation), the country’s largest manufacturer of ships and marine equipment (sales, $8.0 billion)
• Grupo Bimbo, a Mexican food and beverage company (sales, $5.9 billion)
• Inter RAO UES, Russia’s largest importer and exporter of electricity (sales, $1.0 billion)
• JBS-Friboi, Brazil’s largest beef and pork processor (sales, $1.9 billion)
• Marcopolo, the world’s third-largest maker of bodywork and components for buses and vans, based in Brazil (sales, $820 million)
• MOL Group, Hungary’s leader in oil retailing, fuel retailing, and gas transport (sales, $13.7 billion)
• Nine Dragons Paper Holdings, the largest paperboard-packing manufacturer in China and one of the largest in the world (sales, $1.0 billion)
• PKN Orlen, a Polish oil and gas company (sales, $17 billion)–the largest company in Central Europe
• Shanghai Zhenhua Port Machinery Co. (ZPMC), a leading China-based manufacturer of container cranes (sales, $2.1 billion)
• Sinomach, one of the world’s leading machinery contractors, based in China (sales, $5.1 billion)
• Suzlon Energy, the fifth-largest company in the world for wind energy, based in India (sales, $1.8 billion)
• Tenaris, an Argentina-based maker of tubes and pipes for the oil industry (sales, $7.7 billion)
• VTech Holdings, the China-based market leader in Europe and the United States for educational video games and an innovator in cordless phones (sales, $1.2 billion)

APPENDIX B: The full list of 100 companies that comprise the BCG 100 New Global Challengers — see graphic above.

Also available as PDF at: http://www.bcg.com/about_bcg/media_center/articles/GlobalChallengerslist.pdf

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Commissioning Structures for Sales

This post is by Mr Phil Pemberton, a Business Development Director at Vertex Data Science in the UK.

There is no universal mechanism for incentivising sales professionals. Much depends on the nature of the business, its sales strategies, market, products and services, competitive landscape, etc.

The sales commission plan must be aligned to, and help achieve, the business plan – are you looking at revenue growth, increased profitability, increased market share, introduction of new products and services, the available budget for sales and marketing, etc.

In a traditional direct sales channel where the vast majority of sales come through front line sales staff, it may be appropriate to have a single sales commission plan. In other scenarios, the plan may need to include a wide range of staff that contribute to business development – from marketing through to delivery and account management.

In order to get everyone in the organization pulling in the same direction, reward/bonus structures based on achievement of business plan as well as non-financial measures spread across a wider leadership group is relatively common. A percentage of revenue accumulates in a bonus pool to be shared amongst eligible employees. Long term incentive plans have similar qualities but tend to pay out after 3/5 years based on achievement of longer term goals.

Back to individual sales commissions: In my experience, the following have all worked to some extent:
1) Individual sales person is paid a percentage of total contract value (for high margin products, 3-5% is common). This is simple to administer, unambiguous, but does rely upon there being a clear understanding of the company’s cost base, product cost-of-sales, product margins, etc. It is best suited to product sales where pricing, cost of sales, overhead allocation, margins is relatively transparent and static. For more complex services, this is often seen as an unsuitable approach simply because the contribution (gross profit margin) achievable in reality varies from one sale to the next and is not readily determinable at the point of sale.

2) Percentage of gross profit (4% of contribution is a good benchmark for high value, low margin sales). This approach incentivizes on maximization of profits and thus discourages discounting and price dumping by the sales lead in order to close the sale.

3) Sales commission pro-rata to achievement of agreed sales targets. This approach rewards performance over a period (month, quarter, year) rather than the individual sales transaction. It is normal practice to only reward performance that exceeds target or an agreed threshold – this is typically 50% of the overall sales target. So for example, if an individual has an annual sales target of £10million and she actually sells £6M at the end of the sales period, she would be awarded 60% of her bonus entitlement as she met the threshold (£5M). In this approach, an On-Target-Earning (OTE) figure is used as the bonus level. It is reasonable for pure sales roles to have an OTE at 100% of base salary. Therefore, achievement of target would earn the sales person the equivalent of his basic salary as a bonus. Over achievement of target would be paid pro-rata, with usually an earnings cap at extreme levels (c. 300%+ of OTE).

There are also team/group reward pools and the ilk.

Some organisations reward sales people on a mix of performance indicators – overall earned revenue is usually top priority, but other factors may include profitability, in-period revenue/profit, personal development KPIs, tie-in to overall business plan, etc.

Unfortunately it is still all too common to find successful sales people not paid commission due. Most sales plans are deemed discretionary (although law would support the claim for unpaid commission where the individual had worked with a reasonable expectation of it being paid). Worst still, is the practice of changing sales targets such that the sales person’s success has diminishing returns over time.

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Talent Management and the Resource Crunch

For a management consultant there has never been a time like right now. Business is booming all over the world. Resource shortfalls are in almost every industry, particularly those where I operate, competition and regulation are driving all companies to try to get an extra “edge” over others in their sector, and many markets are starting to use consultants more and more. (UK and USA being cases in point)

The other side of this is that it has never been harder to find good resources to help you.

There are ways however, some take a lot more effort than in the past, but you can still find and keep people of good character and skill levels to work in your consultancy. Here are a few tips that I have seen working in different countries around the world.

1. Use niche job boards – The big job boards are flooded with roles, literally. So much so that it takes a heck of a long time for anybody to wade through them until they find something that suits what they think they should be doing.

Niche boards, on the other hand, focus on specific industry requirements. Our own board focuses entirely on consulting resources and roles for consultants.

2. Use LinkedIn – Depending on the size of your network, you will be able to access hundreds or more management consultants who could be working in the areas you are looking for.

The benefit of a product like LinkedIn is that the people who turn up in searches are not necessarily looking for work. I am on LinkedIn and I am not looking for work anyway. Therefore, instead of waiting for people like this to join the job market, you get the opportunity to approach them first, giving you a first mover’s advantage.

3. Other network options – Tap into your suppliers maybe, your competitors definitely, go to your local chamber of commerce or similar enterprise group.

4. Get a good head hunter – Not a body shop, not a recruiter, but a real honest-to-goodness headhunter.

The kinds of people that will scour your competitors companies, scour his own networks, rip through social networking sites, and act as a filter for you. The downside, real head hunters cost real money, small investment for the person you need.

5. Pay good money – And advertise it! When I was in the job market if the figure was not there neither was my attention. Let us not kid each other, money matters! It matters a lot. Moreover, as time goes on it seems to matter more and more.

Offer good money, and deliver what you offer. There is nothing worse than getting stiffed on a job application. And there is nothing more likely to get people to reenter the job market.

6. Offer additional compensation – Real players get equity. Give equity, profit share, things that are going to tie people’s fortunes to the company and, if they do well, will reward them beyond what they would normally receive. Sounds like a hit on profits? It is, but only on short-term profits.

If you have hired well, using the head hunter, then your new hire is good at what they do, they have the emotional connection to your company, and as time goes on they are only going to increase in their ability to generate revenue for you.

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Growth of the Interim Management Market

In recent time the market for Interim Managers has gone through the roof. In Europe, the UK, the USA and throughout the Middle East, professionals working in this space are reporting greater levels of demand than many of them can cope with.

So what is an Interim Manager? How does it differ from the common areas of temping and sub-contractors? And, more importantly, how can we, as managerial consultants tap into this growing area of demand? I recently spoke with a range of experts in this field around the world to try to find the answer to these questions.

The first thing that came across is that Interim managers see themselves in a different field than management consultants. nearly all the people we spoke to in researching this piece considered consultants more focussed on giving advice and performing specific project related roles. IM’s, on the other hand, seemed to be more focussed on delivering the results, implementing and executing rather than enabling and advising could be a good description.

Eddie Mullen, A Director with Booster Interim Resources Ltd in the UK, notes that “Interim managers are normally over-qualified for assignments, and provide effective, impartial and expert support at short notice, integrated into the line management structure of the hiring organisation”.

Eddies distinguishes between consultants and Interim Managers through their cross functional operational expertise;”What differentiates contractors and other temporary staff from interims is value added. In addition to core skills (HR, finance, marketing, sales, IT), interims bring much greater generalist cross-functional management experience, expertise and knowledge to the hiring organization, at a senior level. By contrast contractors tend to be recruited to operate in a relatively narrow functional area. “

Eugene Rembor Principal of Rembor Partners Ltd, takes this descriptuion a bit further, explaining some of the differences between subcontractors and IM’s ” An interim manager is a senior person, usually someone who has held board positions, been there, done it and got the t-shirt. …[Subcontractors]..do none-line-management jobs or defined projects, whereas interim managers are turnaround experts, gap-busters, change managers or strategic consultants.

But is it worth it? Eugene goes on to add “I enjoy every second…I am always working when I want, but free to take a couple of months holiday when I want, I am earning money beyond my wildest dreams and get to see places.”

THis has to rank as one of the key areas where consulting professionals can find additional revenues over the coming years. There is a genuine lack of resources out there in business and management. Demand is exceeding supply, the old guard are retiring into semi-active and full retirement roles, and business is booming as never before. (Fueled by super commodity cycles, the spike in Asian growth and a range of other well know reasons)

In fact another of the people we spoke to, Vincent Papi, the Managing Director of Boyden Interim Management, sees an influx of available talent as well as a booming market. “Our practice is limited to senior executive positions and we’re growing at a very brisk clip. On an individual level, we’re finding plenty of talent — usually execs who took early retirement and have plenty of gas still in the tank — who relish the idea of taking on a serious challenge, even a short-term one.”

With his comment that his practice is growing at “a brisk clip” he believes that Interim management is now a permanent growth area within the North American resource marketplace.

From across the pond there is a similar view. David Hay, a Partner at AshtonPenny Interim, notes that there are a lot of inquiries but he also detects a lot of “window shopping.” Like others in our discussion he also believes that Interim Managers are”…senior executives who have chosen the interim route, rather than those who are struggling to find a new permanent role; those for whom earning money is less important than the interest and the challenge; those who network effectively and continuously.”

However, he also has a warning for those wishing to work in the industry and for those looking to hire from the pool of growing executive Interim talent. “Those…who are experienced IMs will have been on the receiving end of multiple calls about the same assignment from different providers.

In the main these are connected to companies seeking to use an IM for the first time, when there is a tendency to send the enquiry to all and sundry. Whilst I can understand their reasoning I have to say it is not always in the client’s best interest to create what is in effect a race. Inexperienced or less professional providers can be tempted to submit candidates without proper vetting, just to ‘get in first’. It’s frustrating for us and I’m sure it’s no different for you IMs out there.

Once, there were only a few providers here in the UK, but the market is now quite crowded, with a grey area around what I would call the top end of contracting and that must be confusing for new IMs and clients too.”

As a “would be” IM, this has been a fascinating look into the alternate universe of Interim Management, the potential rewards within the area, and the exciting levels iof growth associated with it. When (if) I ever go into practice for myself again I personally will have the Interim management badge as part of my own portfolio of works.

Interestingly, most people we contacted about this area all commented that most of the leads they get come from within their own networks.

For those of you looking to find out some additional information there are some excellent resources on the web, two of those mentioned in our discussion are.

• Interim Management Association (UK)
• Institute of Interim Management (UK)

Eddie Mullen, new to Interim Management and the best respondant we received on this topic puts it this way “I would certainly recommend interim management to others but would strongly recommend detailed research, personal refection and structured planning and preparation before committing to an interim career, particularly as it can take time to get established.”

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Marketing for growth

When you just start out growing the business is a very hard thing to do. You have spent a lot of money and time to get the project you are working on now, and while you are working you can’t spend the time getting the next job or filling the sales pipeline can you.

Yet if you don’t do something then you are going to reach the maximum time you can sell your services for, and there will be no where to go in terms of growth.

There there are no real easy answers to this. However, one of the best options open to you is marketing. Start to generate gravity towards your company through effective PR and marketing campaigns.
Any expert in this area will tell you that one of the secrets is that PR beats marketing any day. Remember the iPhone launch? Do you recall the ads for it? No? Thats because there were none! One of the most successful product launches of the new century was done basically through good PR, interviews, press releases, comments at conferences and other “peek-a-boo” techniques generated a level of spin that even Tony Blair would be proud of.

But you aren’t Steve Jobs, so while good PR is a must do activity, you are also going to need to supplement it with good marketing.

So spend the money, take $40,000 from last years earnings and spend it on trade publication ads, internet marketing (but low level), conference appearances, and whatever else is going to work. YOur marketing budget needs to return at least 200%. So at least $80,000 in additional revenue. Giving you the opportunity to hire an additional resource, and to start working on your practice instead of in the practice.

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Building value into your consulting practice

Congratulations, you are making it! Your step out on your own has gone well so far. You now have four other people working with you, revenues in the low 7 figures and you are starting to realize your dreams of independence.

The fast cars, nice houses and great vacations are taken care of. So now what?

If you look around it seems that all the people you have hired are strangely like you are, each year you need to spend the same amount of effort driving work into the firm, and what happens if you want to walk away tomorrow?

If you are honest the firm is probably not worth too much. All the value is locked away inside the skills of you and your four colleagues, and your best exit strategy is probably either to just close the doors, or to sell it to the guys you hired.

Not really a great value proposition even though it is generating good revenues. So how can you build real value into your consulting practice? The sort of value others would pay millions to have?

Tiffani Bova, a Research Director for Gartner Group, puts it like this “When you look at this type of business, the value of the company must be greater than the ‘projects’ you deliver to your clients and the people in your company.” She makes the point that successful consultancy firms build their business on a combination of both project based work and some form of predictable revenue which delivers long term predictable value.

Paul Collins, a Managing Director of Equiteq in the UK, agrees and he should know. In his career he has sold a 30% stake in his own consulting business WCI in 2004, valuing the firm at £50m. He has also built a further 2 service firms, bought 2 and sold 3!

Paul is a strong advocate for developing a strong sales pipeline, one that can be used to predict fture reveunes accurately based on todays leads, yesterdays sales, and tomorrows aspirations. Predictable revenue is the baseline requirement of any firm looking to create permanent value for stakeholders of for eventual sale.

So how can you do this?

Octavio Ballesta, a Technology Project Manager at Inelectra, believes the basis of generating value within a consulting practice revolves around strong branding, good long term relationships with clients, and strategic partnerships. However, he pays special attention to resource diversification.

“In order to consolidate a competitive advantage you should hire, train and retain progressively world-class consultants with insights in Business Process Management, Six-Sigma methodology, Knowledge Management, CRM and Change Management to offer to the relevant market an enterprise-wide solution in different disciplines of consultancy. You should avoid dependence from one superstar consultant to manage your firm.”

This is a recurring theme in all the experts we spoke to about building value. The importance of a system over one or two superstar consultants is always emphasized as a way to build permanent value into the organization. Stephen Hancock, CEO of enCONCERT, offers the following advice in this area “f you have a particular skill that is valuable then you could try to systematise it using technology and then develop consultants or solution partners that can deliver the service without you being ever present. This could create income streams in license fees or royalties which earn “while you sleep”

The last area to explore in terms of developing a pipeline of repeatable sales and performance is to do with the elusive art of developing IP. “You need to build your IP as part of the practice” Says Brian Macleod, “This could be inherent in the way you train, explain or connect with your client. It must be defined as methods and techniques that can be communicated to others with the team.”

So experts agree, if you want to build permanent value into your company, the sort of value that is worth more than the value of your projects and the people who work for you, then a few of the key areas you will need to focus on include: diversification of resources, systematizing your approach, guarding and internalizing your IP, and finding a way to generate predictable recurring revenue streams.