1. 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 e-mail: kshan@ssu.ac.kr The ICMCI Biennial Congress 2005 in Beijing

2. 1 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 Conclusion Session 4 : Conclusion

3. Session 1 : Outline

4. 3 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. 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. Definition of Management Consulting

5. 4 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

6. 5 Definition of Management Consulting Independence Special Training and Qualification Advisory Service Identifying and Analyzing Problems Solving problems and Implementation Key words

7. Session 2 : Global Consultancy in Cross-cultural environment

8. 7 Global Consulting Market We expect continuous growth until 2006. Source : Kennedy Information

9. 8 Global Consulting Market

10. 9 Source : Kennedy Information Global Consulting Market-by Industry

11. 10 Source : Kennedy Information Global Consulting Market-by Industry Ratio

12. 11 This is the data of Year 2004. US is 50% of the whole market. Source : Kennedy Information Global Consulting Market-by Region

13. 12 The Consulting Industry is growing rapidly in People’s 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. Global Consulting Market - China

14. 13 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. Global Consulting Market - China

15. 14 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 Trade- Investment Promotion Agency) encourage to join Chinese consulting market for more than 10,000 Korean firms in China. Global Consulting Market - China

16. 15 Source : Kennedy Information Global Consulting Market of Public Sector

17. 16 Source : Kennedy Information Areas of Global Consulting

18. 17 Source : Kennedy Information Areas of Global Consulting

19. Session 3 : Current Korean Consultancy

20. 19 Current Status of Korean Consulting Industry 1. Korean consulting industry falls behind for about 10 years comparing to the industry of advanced countries. 2. More than 50% of Korean consulting market is dominated by foreign well-known consulting firms. 3. In order to satisfy global standards after Asian Financial Crisis, Korean firms needs consulting from foreign consulting firms.

21. 20 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 SME’s per year More than 200 Consulting firms & APEC CBCs Counseling with Consulting About 2,000 Small businesses Funding support from Korean Government

22. 21 Current Trends of Korean Consulting Industry 1. The rapid growth of Korean Consulting Industry: The Size of Korean Consulting Market is estimated as about US$ 1.71 Billion. The growth rate was more than 14% in last 5 years. (Source: Korean Consulting Association in 2002) 2. The vague boundary of Consulting Job: Korean System Integration companies and other professional companies intrude into consulting markets.

23. 22 Current Trends of Korean Consulting Industry 3. The changed areas of Consulting Services: Clients need the total consulting service including strategy establishment, process innovation, and IT applications. 4. The changes in the competitive structure: Software companies, System Integration companies, accounting companies (CPA firms), and law firms becomes competitors.

24. 23 Current Trends of Korean Consulting Industry 5. The preference of well-known foreign consulting firms: Korean clients prefer well- known foreign consulting firms to Korean consulting firms. 6. The growing niche markets developed by small Korean consulting firms: Korean small consulting firms developed the niche markets based on client-oriented consulting strategies.

25. 24 Strategy IT Operation HR McKinsey, Booz Allen Hamilton, Bain & Company, The Boston Consulting Group, Monitor & Co., etc. Accenture, Deloitte, BearingPoint, IBM BCS, etc. BearingPoint, AT Kearney, CSC Index, etc. William Mercer, Towers Perrin, Watson Wyatt, Hewitt Associate, etc. Areas Specialized Consulting firms Current Specialty of Consulting Firms in Korea

26. 25 Strategy Focused Service Focused Narrow Service Broad Broad Information Technology Narrow McKinsey Brain & Company BCG SDS LG CNS AccentureIBM BCS BearingPoint Deloitte Consulting Source: Deloitte & Touche Future Battle Field Nemo Future Trends of Korean Consulting Industry

27. Session 4 : The Strategy in Cross- cultural environment

28. 27 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. Improved recognition of consulting as an industry Future of Korean Consulting Industry Future Strategy of Korean Consulting Industry

29. 28 The educational systems for consultants need to be developed to improve the ability of consultants in Korea. Universities are joining to the system. Developing Educational Systems to Improve Excellence of Korean consultants Future of Korean Consulting Industry Future Strategy of Korean Consulting Industry

30. 29 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. Developing Differentiated Consulting Tools Future of Korean Consulting Industry Future Strategy of Korean Consulting Industry

31. 30 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 Future of Korean Consulting Industry Future Strategy of Korean Consulting Industry

32. 31 Korean consultants would like to increase the level of cooperation with People’s 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. Conclusion

33. 32 Thank you! Q&A