Boston Consulting Group looks to build on great year in Germany

15 June 2018 Consultancy.eu

Boston Consulting Group has enjoyed a fine year of growth in Germany, adding roughly €100 million to its annual revenue haul of €830 million in 2017. As the firm bids to kick on from the encouraging results, 2018 sees BCG plan to hire 500 new employees, including about 370 consultants.

Although the consulting firm has not published exact figures for the German market for four years, estimates extrapolated from the firm’s most recent filings submitted to the French Chamber of Commerce show annual sales in Germany can be estimated at just under €830 million, rising from €730 million in the year previous. With this expansion, BCG Germany has become the growth engine of the firm’s global footprint.

Globally, sales increased by 11% in 2017, from $5.6 billion to around $6.3 billion. As a result, the management consultancy has now seen double-digit growth for four consecutive years – a far cry from the annual growth of “one digit percentage” anticipated by BCG Germany & Austria Managing Partner Carsten Kratz in 2014 – something reflected by a huge boost to the firm’s global headcount. The organisation saw its collective staff boom from 14,000 to 16,000 over the course of 2017, and while the US – the world’s largest individual consulting market – understandably remains Boston-headquartered BCG’s largest market, it is closely followed by its European powerhouses in Germany and the UK.BCG looks to build on great year in GermanyCommenting to the German press (Handelsblatt) on the firm’s enhanced stature in the key European market, Carsten Kratz said, "We have clearly exceeded our goal,” after the news broke that BCG Germany had hired more than a quarter of the firm’s new employees last year. 500 new employees arrived at the MBB firm, including roughly 370 consultants, bolstering BCG’s offices in seven locations spread across Germany, with bases in Berlin, München, Stuttgart, Köln, Hamburg, Düsseldorf and Frankfurt.

This year, the consulting firm plans to pick up where it left off, hiring on the same scale. In the consulting industry, however, it is traditional for firms to experience a high turnover of staff, with the intensity of work leading to workforce attrition, and competition for talent meaning consultants are commonly lured elsewhere, sometimes within a few years of arriving in a new role. As a result, about half of this hiring is likely to be necessary to occupy existing jobs, and the other half is likely to be real growth.

Digital growth

The rapid ascent of the business in Germany has been built on the back of heightened demand for digitalisation. The global digital transformation market is currently worth $44 billion, having almost doubled in size over the past 18 months. According to the most recent figures available, revenues of the consulting service line have increased by more than $20 billion since 2016, as clients routinely tap consulting firms to assist with overhauls of their business plans to best utilise innovative new technologies, and fight off growing competition.

BCG has already played a strong hand in this field, having launched BCG Platinion – its subsidiary dedicated to helping clients with digitising and transforming their IT function, providing digital design and engineering capabilities – in Germany, before expanding it to boast a worldwide presence of its own, with offices in Europe, the US and Canada. Beyond this, however, Kratz sees great opportunities for German industry in the data economy – which BCG will hope to further tap into as a catalyst for its next stage of growth.Carsten Kratz, Managing Director BCG Germany & AustriaKratz said; "German companies are particularly well positioned when it comes to machine data," before elaborating that he believes the use of machine data is just beginning. "Half of all existing data was created only last year. Not even 1% of all existing data has been evaluated yet. If we succeed in setting up data-driven business models for mechanical engineering, German industry has a great future."

Besides digital, BCG has high hopes for another new business line set to be launched in Germany. BCG aims to achieve this by expanding its existing range of services, something complemented by the arrival of its American subsidiary, Brighthouse, to Berlin. The consulting firm, acquired three years ago by BCG, specialises in helping companies find meaning, or in German; "Purpose Beratung." According to Kratz, it is increasingly vital to help employees and managers of a company to understand, “Why does our company exist?”

While the deceptively simple question was answered by many companies relatively easily for generations, Kratz however maintains that "in the wake of digitisation, the answer is often suddenly no longer trivial." Studies have shown that companies which can clearly answer the question are more efficient, posting better results.

BearingPoint books 8th consecutive year of growth since buyout

11 March 2019 Consultancy.eu

BearingPoint has booked its eighth consecutive year of growth since gaining independence, lifting its global revenues to a record €739 million.

“I am proud that we were able to continue our path of sustainable and profitable growth in 2018 and reached the highest revenue ever,” said Kiumars Hamidian, who took over the reins at the management and technology consultancy in September last year. 

Underpinning the firm’s 4% growth, BearingPoint made over 1,100 new hires in 2018, lifting its headcount to over 4,500 employees. The partnership was enlarged with the appointment of 21 new admissions, of which 14 were promoted internally, and 7 recruited externally. “This demonstrates our attractiveness as employer of choice for top talent and confirms our commitment to the model of an independent partnership fully focused on client service,” said the firm’s boss in a press statement.

Western Europe was BearingPoint’s powerhouse region for growth last year. The regions France and Benelux (Netherlands, Belgium and Luxembourg) and the United Kingdom & Ireland booked growth “far above the market average”, said Hamidian. While not disclosing exact numbers, according to the latest data available, UK’s consulting industry on average grew by just over 5% last year, France saw its advisory market accelerate to over 6% growth, while the Benelux recorded growth of around 4%. Revenues of BearingPointIn the latter region, the consultancy last year launched an office in Luxembourg, where it has been supporting clients since the turn of the century, and acquired Belgian firm Inpuls, a data specialist, doubling its size in the country. In the largest of the three markets, the Netherlands, BearingPoint grew its team to over 60 consultants. 

Founded in 2009 in its current form, BearingPoint’s roots go back over 100 years to the early days of two of the biggest names in professional services: Arthur Andersen, founded in 1913, and KPMG, founded in 1987. Following a 2001 spin-off of KPMG Consulting from its Big Four parent KPMG, the BearingPoint brand entered the stage, and after the firm buckled to financial difficulties in North America in 2009, the then successful European division decided to complete a management buyout. 

Under the leadership of Peter Mockler, who passed on the baton to Hamidian, the renewed BearingPoint has been a remarkable success story since, growing its revenues from €441 million back then to today’s €739 million. The firm now has offices in 19 European countries, with locales in Casablanca and Dubai used to serve the Africa and Middle East markets. Outside EMEA, BearingPoint has offices in Asia and the US, and to cover other regions, it works with strategic partners: West Monroe Partners in North America, Grupo ASSA in South America, and ABeam Consulting in Asia.

Organised across three divisions, consulting last year recorded 6% growth, while the software solutions business grew slightly slower than in previous years. The ventures arm continued its expansion, investing in Insignary, an Asian start-up that develops open source software security and compliance. Two years ago the venture capital unit took a stake in Norwegian insurance technology start-up Tribe.

Looking ahead, Hamidian said that the firm is well on track to deliver on its long-term strategy. “The execution of this strategy will allow for more success and further growth in the upcoming years,” he commented, highlighting markets, portfolio and people as the key pillars.

Related: Kiumars Hamidian unveils his first focus areas as BearingPoint's new CEO.