An In-depth Study on the Management Consulting

Services Industry In the Philippines

Submitted by:

Mr. Edgardo Bolinao

Project Head

and
Ms. Ma. Theresa Mosquito
Senior Researcher

August 17, 2001

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 Table of Contents

page

List of Tables ii
List of Appendices iii
Executive Summary vi

Introduction 1
1. The industry 2
1.1 Definition 2
1.2 Industry Structure 5
1.2.1 Global Management Consulting Services Industry 6
1.2.2 Philippine Management Consulting Services Industry 20

2. Forward Linkage/Market 46

3. Backward Linkage/Suppliers 52

4. Laws Hindering/Facilitating 55
4.1 Philippine Laws and ADB Policies 55
4.2 Commitments under GATS 58

5. Market Potential/Foreign Market Demand and Competition 60

5.1 Entering Foreign Markets 60
5.2 Extent of Services Rendered Abroad 63
5.3 Foreign Market Demand and Competition 64

6. Supply Capability 66
6.1 Services Offered 66
6.2 Areas of Specialization 67
6.3 Expertise/Technical Competence of Manpower 68
6.4 Existing Association 73

7. Industry Training Needs 75

7.1 Quality and Quantity of Training 75
7.2 Identification/ Listing of Training Needs 75

8. Opportunities and Threats 77

8.1 Opportunities 77
8.2 Threats 78

9. Summary of Issues and Confronting the Management Consulting 79

Industry

10. Action Plan Enhancing Competitiveness 85

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 10.1 Recommendations 85
10.2 Performance Monitoring Scheme 94

11. Directory 97

References 104

Appendices 106

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 List of Tables

Page
Table 1 Scope and Definition of the Management Consulting 3
Services Subsector based on UN CPC Provisional Code
and Version 1.0
Table 2 Scope and Definition of Business and Management 4
Consultancy Services Subsector Based on the PSIC Code
Table 3 50 Largest Management Consulting Firms 6
Table 4 Performance of the World’s Largest Consultancies 7
Table 5 Profile of Major Players in the Global Management 9
Consulting Services Industry Based on Interviews made
by Wetfeet.com
Table 6 Profile of Various Management Consulting Services 15
Offered
Table 7 Contribution of the Business and Management 21
Consulting Services to Business Services Industry, 1994
(values in thousands of pesos)
Table 8 Large Multi-functional Consulting Firms or Full-Service 22
Service Firms in the Philippines
Table 9 Firms Which Started From Accounting and Audit Firms 24
and Now Offers Major Consulting Services
Table 10 General Management Consulting Firms 25
Table 11 Human Resource Management Consulting Services 25
Table 12 Financial Management Consulting Firms 26
Table 13 Marketing Management Consulting Firms 27
Table 14 Production Management Consulting Firm 27
Table 15 Risk Management Consulting Firms 27
Table 16 Management Consulting Firms Involved in Development 28
and Policy Studies/Work
Table 17 Franchise Management Consulting Firm 28
Table 18 Management Consulting Firm Involved in Business 29
Recovery and Turnaround
Table 19 Management Consulting Firms Which Are Limited to 29
Offering Services for Specific Sectors/ Industry/ Market
Table 20 Technology Consulting Firms 31
Table 21 Engineering Consulting Firms 32
Table 22 Business Intelligence Units 32
Table 23 Market Research Firms 33
Table 24 Investment and Financing Companies 34
Table 25 Learning and Academic Institutions and Non-Government 35
Organizations
Table 26 Internet-based Service Providers 36
Table 27 Number of Establishments in the Philippines Classified 37
Under Business and Management Consulting Services by
Size of Employment

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Table 28 Nature of Employment in Establishments in the 38
Philippines Classified Under Business and Management
Consulting Services by Size, 1994
Table 29 Compensation in Establishments in the Philippines 39
Classified Under Business and Management Consulting
Services by Size, 1994 (values in thousands of pesos)
Table 30 Financial Indicators for Establishments Classified Under 39
Business and Management Consulting Services, 1994
(values in thousands of pesos)
Table 31 Costs Incurred by Establishments Classified Under 41
Business and Management Consulting Services, 1994
(values in thousands of pesos)
Table 32 Financial Performance of Leading Business and 42
Management Consulting Services Firms in the Philippines
Based on SEC Listing of Top 12000 Corporations (values
in thousands of pesos), 1996-1999
Table 33 International Funding Institutions Providing Loans and 47
Grants to the Philippines, 1997-2000
Table 34 Areas of Funding of 128 Local and International Funding 48
Institutions
Table 35 Market Linkage of Business and Management Consulting 50
and Market Research Services in the Philippines
Table 36 Supply Linkage of Business and Management Consulting 53
and Market Research Services in the Philippines
Table 37 Services Offered by Philippine Management Consulting 66
Firms
Table 38 Areas of Specialization of Philippine Management 67
Consulting Firms
Table 39 Profile of Manpower Competence and Expertise of 69
Employees in Philippine Management Consulting Firms
Table 40 Profile of Manpower Expertise and Human Resource 70
Development Efforts in Global Management Consulting
Firms
Table 41 Possible Groupings of Stakeholders According to Area of 93
Specialization

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List of Appendices

Page
Appendix A Nature and Scope of Research and Development 106
Linkages of the Different Schools

Appendix B Nature and Scope of 127

Consultancy Linkages of the
Different Schools
Appendix C Nature of Development Assistance Projects, 1998- 131
2000
Appendix D Government Information 143
Systems Plan
Appendix E Market Studies on Specific Countries in Asia-Pacific 165

Appendix F Market Studies on Specific Countries in Europe 171

Appendix G Market Study on the United States 178
Appendix H Market Studies on Specific Countries in Other 181
Regions

Appendix I List of International Associations of Management 188

Consultants

Appendix J Strengths and Weaknesses 189

Appendix K General Agreement on Trade in Services 191

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 Executive Summary
The General Agreement on Trade in Services (GATS) had set the move
towards further liberalization of international trade in services. It urges
governments to identify and reduce barriers related to market access and
national treatment. Among the services for which schedules of specific
commitments had been set, management consulting services is included.
Nevertheless, even before the GATS, the current trend towards
internationalization and globalization of the world economy resulted to significant
developments in the management consulting sector. The sector is in itself an
open and liberal market. Entry, and work into foreign markets, are easy. This is
because of minimal legal barriers to management consulting services. There
are language and cultural barriers but they do not present serious obstacles to
consulting across national boundaries.

According to the United Nations Central Product Classification,

management consulting industry includes firms and individuals who offer
advisory, guidance and operational services related to general management,
financial management, marketing management, human resources management,
production management and other management consulting services. It excludes
computer activities, legal advice, accounting, auditing and bookkeeping, market
research, and technical advisory e.g. engineering and architecture. In the
Philippines, the PSIC or Philippine Standard Industrial Classification of the
National Statistics office is used as a basis for the classification of industries and
the subsectors. It includes not only activities as mentioned in the UN CPC but
also includes the activities of management holding companies. The difference in
the definition pose problems in estimating the real output and performance of the
management consulting industry in the Philippines.

The management consulting services industry, by its very nature is global.

The larger consulting firms operate internationally and have offices in various
countries. In 1992, it was estimated that the consulting business sold over US $
28.3 billion of advice, which further grew to US $ 43 billion in 1995. At present,
the Kennedy Research Group estimated that the total consulting revenues
worldwide is US $ 62 billion and growing between 10 to 30% annually from
country to country. Based on services offered, it was estimated that technology
planning represents 35 percent of the output, strategic services have a share of
20 percent and enterprise consulting covers around 15 percent . Forty two out of
the 50 largest firms are homebased in the US, eight are based in Europe (two
are based in France, three are in London, one is in Netherlands and two are in
Germany). But even with the dominance of the largest consulting firms that eat
a significant share in the market, consulting remains a fragmented business
where thousands of small specialty firms prosper. Based on the total revenues
of US $ 62 billion, the top ten firms have more than 50% of the share. And the
recent growth rate is often more than the industry average of 10% to 30%
annually. There is very high competition in the industry as reflected by a market

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where according to Milan Kubr, “supply has matched and even outgrown
demand”. This is indicated by the (1) increasing number of players that enter a
market characterized by minimum legal barriers for entry; (2) growing
sophistication of clients who become more selective resulting to the
development of a number of new and specialized services to address the
complexity of new management problems; (3) increase in efforts towards
advertising and marketing of consulting services; and (4) continued
internationalization of consulting firms. Competition is usually based on the
following: (1) skills and expertise of consultant/s; (2) development of new
executive management tools and/or services; (3) reputation/track record as an
expert in providing the service; and (4) network/s of clients established by
consulting firms/individuals; and (5) price. By location, the largest market was
estimated to be in the US where a US $ 15.2 billion was spent for management
consulting services industry in 1992, followed by Europe with US$ 7.6 billion, and
Asia with US $ 3.2 billion. The rest of the world spent an estimated US $ 2.3
billion. The social, technological, economic and cultural environment of
business and government is changing rapidly. This corresponds to the changes
in the customers and demand for management consulting services. The
changes are characterized by: (1) increasingly sophisticated clients who, on their
own, can handle present management problems formerly handled by
consultants; (2) increase in need for consultants who can handle difficult, risky
and new tasks that would require a great amount of information, speed of
analysis and action ; (3) an approach to problems with an interdisciplinary,
intersectoral perspective, innovative, with understanding of social and
environmental implications; and (4) availability of special expertise. Services
offered by internet-based consultancies became substitute products for
reengineering solutions and efforts of traditional management consulting firms.
While some technology firms tie up with management consulting firms to either
broaden services or converge with services provided by management
consultancies. There is also a rise in the growth of purely e-business consulting
firms. And this poses a threat to the management consulting firms.

In the Philippines, the business and management consulting services industry contributed not
more than 0.62% to the Philippine economy and 21.24% to the business services industry in 1994. Based
on the top corporations in the industry, performance varies widely across the different consulting industries
based on the size of the firm and services offered or specialization. Growth rate ranges from -5.27 to
738.52% based on financial performance reports of firms whose main activity is management consulting.
Similar to global firms, management consulting firms are diverse in nature and fragmented. It can be
classified into two broad classifications, traditional providers of management consulting firms who may offer
specialized or full-service packages and non-traditional providers of management consulting services such
as software vendors, IT consulting firms, market research firms, engineering consulting firms, non-profit
research institutes or centers and academic institutions.
There is an absence of reliable data base to properly monitor the
performance of the industry, the real contribution to the economy and the number
of players in the industry. The small size of the industry as compared to other
business service sectors lend itself to be included in “other business services” in
the definition of PSIC. The definition of the PSIC is a point of contention since it
includes activities of management holding companies therefore making
estimates on the performance of the industry unreliable. To add to this is the very

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nature of the industry of being diverse. There is a very thin line that draws the
difference between traditional and non-traditional providers of management
consulting services. There is therefore a need to also include the specific
management consulting services’ contribution in the business of the non-
traditional providers since these may have a significant effect on the estimation
of size of the market for management consulting services. Another point to be
considered is the existence of small players and individual consultants in the
industry. There is more difficulty in monitoring these individual consultants and
small players who may come and go because of low entry and exit barriers in
the industry.

There is a very competitive environment in the management consulting

industry in the Philippines. The competition in the industry is characterized by the
following (1) existence of large international multifunctional firms with the
capability of offering full-service packages and who have a significant share in
the market; (2) increasing number of non-traditional providers of management
consulting services; (3) low entry and exit barriers in the industry leading to more
players in the industry and poor image of consultants since anyone can just be a
consultant; (4) high supply of consultants and consulting firms and low demand
for the services in both private and public sector markets. There are recent news
indicating a decrease in official development assistance from other countries. For
private sector market, it is concentrated on large firms and even large firms have
limited demand for consulting services especially if they have internal consultants
(corporate planning department); (5) existence of few players with highly
differentiated services. Unlike technology consulting or market research firms
who were able to offer differentiated services through branded solutions or
packages, few consulting firms were able to successfully do so. Switching costs
are therefore very low.

Large, new players and non-traditional providers of management

consulting services have added significant competitive pressures to the local
market . With the blurring of the consulting industry’s boundaries, non-traditional
suppliers are adding to the supply of consulting services available to the market.
In addition, there is a growth in advisory services offered by public and non-profit
organizations such as colleges, universities and non-government organizations.
The competition these entities offer can affect management consulting firms of all
sizes.

There is a growing threat posed by technology consulting firms among

management consulting firms. The emergence and growth of technology
consulting firms point out to a growing demand of clients for information-
technology related services.

Information technology plays a big role in the businesses of many

companies. Slowly, even in government, technology is playing an
important role in systems and processes. Technology consulting firms

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 pose a big threat to management consulting firms especially to those
targeting private sector client companies. Private companies and
government corporations, in the past years have invested heavily on
computerization and business process reengineering. The strategy of
many consulting firms now is to recruit business graduates to complement
their technical expertise. These firms have realized the need to
understand business strategy and processes. This led to solutions known
as Enterprise Resource Planning (ERP), Customer Relationship
Management (CRM), e-commerce and e-business solutions. Since many
technology consulting firms are also software vendors which are used in
the implementation of the business processes developed, then it is
expected that switching costs will be high. Therefore, these technology
consulting firms are expected to be there for a longer time to monitor
implementation of systems that they placed. This has eaten a significant
share in the market of management consulting firms offering services
related to business process engineering, systems evaluation and systems
audit. It is not impossible that these technology consulting firms can grow
and become a full-service consulting firm offering strategic management
services and business intelligence. This is not far-fetched since the
services they offer now are related to tools to implement strategies and
tools to obtain continuous business information to make sound decisions.

The Philippine management consulting community is being challenged to

develop new services as a result of rising client expectations and sophistication,
changes in the information technology and growing competition. Philippines’
strength in management consulting is the small and sectoral expertise of some
players in the industry and it is a particular challenge for these knowledge-based
companies to focus significant human resources on new service development.

At present, the industry has numerous small to medium-sized general

management consulting firms and consultants but lack of locally-established
firms with highly specialized expertise. Global trends as well as available local
data shows that differentiation is a factor in the success of many small to
medium-sized consulting firms.

The increasingly competitive marketplace dictates that in order to

meet the challenges of the knowledge-based economy, firms are
required to innovate constantly in order to react quickly to changes.
Shortages of time, people and capital are major drivers why firms explore
the use of external sources of expertise known as outsourcing.
Outsourcing as a practice in the industry ranges from routine, project-
based, short-term contracts to cooperative agreements, including
partnerships and strategic alliances. This is why many established
consulting firms invest to maintain a database of available consultants and

10
 experts as well as consulting firm partners to rely on for particularly large
projects.

There is a rapid growth in the number of consultants offering

management advice, without a widely accepted level of standards,
standards of conduct, then the industry is bound to be negatively affected
both locally and globally.

Since there are no stiff entrance requirements for practicing inthe industry
that are equivalent to other professions. Some of these “ consultants” do not
have training in management consultancy processes and do not subscribe to
professional code of ethics in consulting.

Accreditation of consultants has long been pushed by some players

in the industry and particularly by IMPHIL but there is absence of a legal
framework and specific government support to assist in the
implementation of accreditation of consultants. This can upgrade the
standards in the industry and counter existence of more “fly-by night”
consulting firms and consultants.

The accreditation of consultants would help a lot in improving demand

and factor conditions in the industry. A reduction in the number of short-term,
one to two projects, fly-by night consultants and consulting firms can be made if
this is implemented. The poor image of consultants will be addressed. The
accreditation would also pave the way to easily market and promote the
services of consulting firms and consultants among local and international
clients.

There is a limited domestic market for management consulting in the

Philippines. Private clients are limited to large players in the industry which are
mostly multinational which either have their own internal consultants or would
prefer international management consulting firms recommended by their mother
companies. Very few small and medium-sized firms seek the assistance of
consultants since this is considered an”expense”. The Philippine domestic
market is not as sophisticated as the clients found in Europe or United States
where small and medium-sized ventures are very much open and encouraged to
seek the expertise and assistance of management consulting firms to ensure
productivity and profitability.

Projects obtained through international funding institutions and

government agencies are limited to the available official development assistance
and national budget. There are trends that show a decrease in the official
development assistance as well as increasing number of international players to
compete with in the projects.

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 The industry is also characterized by lack of industry-wide information on
market opportunities abroad. Most efforts with regards to market research related
to consulting opportunities abroad are done on a per-company or individual
basis. There is no institutional information network to assist management
consulting firms in expanding their market. With the expertise and knowledge
resident in the small and medium-sized firms, there is significant potential to take
advantage of the growing global market. The smaller firms usually cannot
compete with foreign firms for large projects, but with the specialized functional
and sectoral knowledge, they can take on niche assignments with larger firms.

Absence of a focused marketing strategy aimed at promoting and developing

the industry towards preparation for the international market. Along with a
growing need to strengthen the management consulting capabilities of the
players in the industry, there is also a similar need to market the companies who
are capable and willing to compete abroad. In the face of a limited domestic
market, there is a need to expand further into other markets outside the country.

In seeking to promote the growth and national development of the

Philippines Consulting Industry in general and the Filipino consultants in
particular, the proposed action plan will approach the objective at three
levels: The government, COFILCO itself (being an umbrella organization
that represents Filipino professional consultants) and the other related
organizations levels, which includes IMPHIL. Parallel to these approaches
will be a legislative approvals of reviving the passage of the proposed
National Consultancy Act:

Government Level:

1. To seek a government policy statement that the government

supports the engagement of Filipino Consultants and an
assurance of a level playing field:
a. in loan negotiations
b. in project scoping and position
c. in national project (should hire consultants instead of hiring
employees, as in-house staff of the agency, limit agency
capability to contract management

2. Engagement of the Filipinos as prime or lead consultants.

For foreign assisted project, must be at least joint ventures (50-50

min) with the Filipino consultants for two(2) years, then Filipino consultants
as lead consultant for the next five (5) years, and then 100% totally
Filipino consultants onwards. For locally funded project, only Filipino
consultants as lead or Prime consultants.

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 3. Increasing the fees of local consultants.

Standard rates (minimum) for local consultants, for locally-funded

projects. Standard rates for Filipino consultants at international rates for
international selection of consultants.

4. It is strongly recommended that the Implementing Rules and Regulations

of E.O.164 the procurement of Consulting Services for Government
Projects, or the Consultancy IRR which provided a systematic and
standard set of procedures in the hiring of local and foreign consultants be
strictly and fully implemented. The consultancy IRR was conceived to
develop a more orderly, uniform and transparent set of procedures in the
selection of consultants and likewise increase the participation of local
consultants as well as to provide adequate and fair systems, rules and
conditions governing government’s procurement of consulting services
many projects. No less than the former president Fidel V. Ramos in 1992
articulated the fact that successful consultancy implies rich project
experience and high technical capabilities, as demonstrated by Filipino
consultants in a wide and diverse range of fields. “They not only provide
needed expertise to plan, build and manage project in the country, but
also in foreign exchange from project involvements abroad,” but first track
record must be developed. And this was not the general case among
local consultants. Their flight was sad and a lonely one. Their experience
in obtaining government project since the consultancy IRR was
characterized by frustration and disappointment. They have become a
second rate citizen in their own country and moved in the shadow of their
foreign counterparts as regards to governments projects. The Philippine
Management Consulting Industry is a potential giant if given an
opportunity to grow and develop its wings to become a force to contend
with global management consulting. The industry is now expressive of its
remaining hope on the full implementation of the Consultancy IRR to fulfill
its four basic principles. These are: first, to achieve maximum efficiency
and economy in the development and implementation of development
projects and related activities; second, to enhance the growth of the local
consulting industry and to optimize the use of local expertise, material and
resources; third, to bring about the transfer of new technology into the
country; and fourth, to maintain transparency of government procurement
processes and procedures. The local consultants are one in the export
potential of their craft but a faithful compliance of the consultancy IRR is a
necessity whose time has come.

5. Monitor through NEDA, EDC and congress committee on trade and

industry the full implementation of the consultancy IRR. In the spirit of the

13
 transparency, there is a need to publish in the Web, the list of the
government projects for bidding in line with the E-Commerce act.

6. Revive and lobby for the passage of the National Consultancy Services
Act which was based on E.O.164. There is no law governing the
consulting industry which calls for an organized regulatory body of
government that will supervise, control and enhance the industry, and in
the selection and hiring of consultants for government infrastructure and
other projects giving priority to Filipinos and/or Philippine Consulting firms
thus make them globally competitive.

7. Impose penalty for consultants not complying with the NEDA guidelines.

8. To assist the Filipino consultants to penetrate and maximize participation

in the international market.

• Policy to support the local consultants in foreign assisted local projects

to develop capability and gain experience.
• Policy to promote local consultants through trade shows,
advertisements by the Philippine government
• Policy to support Filipino consultants to obtain software license at
reasonable rates and terms.
• Provision for incentives such as tax breaks to those who penetrate the
international market.

COFILCO Level and other related association level

1. Continuous dialogue with cabinet secretaries involved in policies related to

infrastructure and hiring consultants. DTI, NEDA, DPWH, DOTC, DILG,
NPC, NHA, PPA and NIA.

2. Capability-building of IMPHIL. IMPHIL, with the support of the

government and other non-member players in the industry should be able to
build its capacity through an aggressive campaign in increasing membership and
developing programs to be able to achieve the objectives for which it was
founded. IMPHIL was primarily found to represent the management consulting
industry as well as assist in enhancing the competitiveness of the industry. It has
a big role to play in competitiveness-enhancement of the industry. Its members
are among the well-established and long-existent consulting firms in the country,
but with the increasing diversity in size and specialization of management
consulting firms, it would have been ideal to have significant representations of
the other management consulting firms. IMPHIL should make aggressive efforts
to open its doors to more number of members who can commit to its existing
code of professional ethics. This can be done through regular press releases,
regular updating of its website, organizing professional development programs

14
for management consultants, maintaining a secretariat, developing strong
linkages with local professional and industry associations and international
associations.

Strengthening the domestic market. The industry is characterized by a

competitive environment where the supply exceeds the demand and there are
low barriers to entry. To have a well-developed domestic market there are three
important stakeholders who will play a role in the strengthening of the domestic
market: the customers, the providers of services and the suppliers.

The customer base need to be expanded. At present, there are

opportunities that can be developed in the domestic market among small and
medium sized firms which are not used to hiring consultants, large firms
which have preferential treatment for foreign consultants and government
and non-government organizations which have research and consultancy
needs in their projects but may not have access to available consulting firms
they can tap. Among small and medium sized firms, IMPHIL can spearhead
an aggressive awareness campaign to introduce the organization and its
member firms along with service capability to some associations of small and
medium sized firms like the Philippine Exporters’ Association (PHILEXPORT),
for example. The same campaign may be done to Chambers of Commerce
(Philippine, American, Chinese, Australia-New Zealand, European) and Non-
Government Organizations’ associations. Campaigns can be done through
provision of brochures which were already prepared by IMPHIL to these
associations. Government can also assist through DTI or DFA in representing
the industry to these associations or assisting in establishing linkages
between the associations. IMPHIL can also forge linkages with industry
associations like PCCI and the like. Presentation and promotion of services
among their member firms can be made to make more companies aware of
availability of local consultants who can offer the same quality of services as
their foreign counterparts as well as strengthen the position of the Philippine
management consulting firms locally and lessen the threat of new entrants.
Government, as an institution with significant share in the market of
consulting firms should give opportunities to consulting companies,
specifically those that can be accredited to provide quality services according
to their expertise, to be able to assist in building their track record in the
industry.

The providers of management consulting services, especially the small

and medium-sized players need to strengthen outsourcing capabilities to be
able to meet the diverse needs of clients and compete with large multi-
functional consulting firms. But at the same time, greater differentiation in
core competencies should be developed.

Joint ventures between foreign and local consulting firms should be

encouraged to foster technology transfer and training. There is a need for

15
consulting firms to strengthen technology through management tools. But
these ventures should be viewed as a long-term partnership for both parties.
The contractual agreement should clearly define responsibilites of each firm.

Important suppliers of human resources, information and technology

should likewise be developed. Academic institutions and professional
schools should be encouraged to offer electives in management consulting
services and practices(management services , for accountants) as well as
opportunities to conduct practicum training in consulting firms to develop
awareness among future business leaders about the role that management
consulting play in the economy. This will create opportunities for acceptance
of management consulting in the future among these business leaders as an
important tool to assist management and not just another “expense or cost”
that a company would incur. In the Philippines, unlike in more developed
countries like US and Europe where consulting is a standard, expected
business practice, Filipino consulting firms, especially the small and medium-
sized firms are not used to getting consultants. Cooperation from
information suppliers like the government agencies such as NSO, NSCB,
SEC, and DTI is needed. This is further explained in the next section of this
study concerning performance monitoring scheme. Technology suppliers
such as software vendors in the Philippines can assist the industry in
developing partnerships with consulting firms to develop branded solutions
especially for specialized services offered by management consulting firms.
This can be similar to branded solutions developed by market research firms.
This is specifically applicable for management consulting firms with
differentiated core competencies. IMPHIL can assist in identifying these firms
with differentiated core competencies.

Expansion into the foreign market. With a limited domestic market,

The industry would have to find ways to enhance competitiveness and
expand market into foreign shores. This can be implemented through (1)
identification of players with extensive track record in foreign countries and
those who are committed towards expanding their market overseas; (2)
assist in developing capabilities for international market penetration of these
players; (3) monitor performance in foreign markets and continuously
provide information on market opportunities abroad.

In identifying the players in the industry with extensive foreign experience,

based on the profile of players in the industry, particularly IMPHIL members, it
can be gauged that many of the consulting firms who were able to be
successfully engaged in international projects or projects overseas are those
in the areas of development studies and environmental management,
engineering and technology consulting through projects with international
funding institutions, or partnerships/affiliation with foreign consulting
companies. These are the major areas seen where consulting firms can
possibly compete in foreign markets.

16
 To assist in building capacities for international market penetration, these
players identified can be tapped to represent IMPHIL in international
symposia, conferences, sponsored by international consulting associations to
be able to network with possible partners, affiliates and clients. Alliances of
the established players with extensive foreign experience with other players
who have developed their capabilities well but have not had as extensive
opportunities as their counterparts can be a means to foster sharing of
information, capability building as well as development of specialists. These
are cooperative strategies that may be attractive to organizations with limited
financial, technological and human resources to contend with. Alliances and
consortia among local consulting firms of various specializations should be
encouraged. These firms can complement each others capability and
expertise to compete with the international market needs’ for projects. They
are not formed to undertake a specific project , but exist as a pool of
resources available on demand. The lead firm explores markets in developed
or developing countries and identifies the consulting firm (or group of firms) in
the consortium best suited to provide the required services

Also, through its international affiliations, IMPHIL can facilitate global

collaboration among management consultants. Establishing and
strengthening a secretariat for IMPHIL would go along way to implement
these collaborative actions. This will build the electronic infrastructure to
facilitate formal and informal connections between Philippine members and
members of institutes in other countries. The level of association between
Philippine consultants and consultants in other countries will measure the
progress made on the issue.

Trade commissioners in foreign posts can benefit from informed,

immediate support in promoting the industry. The IMPHIL and government-
initiated agencies can examine the feasibility of a “secondment” program that
would place experienced management consultants in selected number of
foreign posts for a specified period, say, for two-year terms. The countries
selected would be in which the Philippines has significant business
opportunities. The secondees would be involved in formulating and
chanelling specific opportunities to Philippine management consultants. The
secondees could also build relationships with local consulting firms and
contractors of large projects. Such relationships can provide valuable
intelligence about required service offerings in the global market.

Also with the ongoing, computerization efforts in the government, if these

are successfully implemented through the GISP, management consulting
industry can benefit with its access to better information and access to better
communication

17
 Institutionalize the development of the management consulting services
sector. Governments and private sector should recognize that developing the
local consulting profession is a long-term process of institutional development.
based on the development of human resource, information and technology.
These can be done by designating a team as the focal point with responsibility in
preparing and monitoring the strategy and plan of action for developing the
profession. This can be a combination of representatives from the associations
and DTI, universities, professional societies, and national associations of
consultants should play a more active and effective role in raising the
professional standards and quality of performance of the consulting profession.
Formal linkages between professional schools and the consulting industry should
be established. This practice is prevalent in other countries especially in the US
which paved the way for development of new management tools and specialists,
as well as participation of Philippine consulates as institutional marketing arm of
the industry in different countries. Consulates abroad should engage in
aggressive marketing efforts to market services abroad and conduct follow-
through on targeted partners and clients. Targeted clients are those who may
want to conduct business in the Philippines and would need consulting
assistance or foreign companies who would want to get the services of Filipino
consultants/consulting firms

To properly monitor the performance of the industry , the following are the key
result areas that need to be addressed:

National Information database. Based on the data presented on the profile

of establishments and practicing consultants in the Philippines, it can be gauged
that one of the weaknesses of the industry is the weak database it has. There is
lack of information to monitor the performance and contribution of the
management consulting service subsector to the economy.

In this aspect, there should be a close coordination between the information

centers of the National Statistics Office, Securities and Exchange Commission,
Department of Trade and Industry and IMPHIL, as a representative from the
industry sector to identify the needs of the industry in the performance of growth
and opportunities. Specifically, the following improvements can be made:

• through the government, the PSIC should be harmonized with the UN

CPC classification/definition to have a common framework by which
management consulting industry is monitored. Specifically, exclude the
activities of management holding companies in the PSIC definition
• through IMPHIL, regular surveys through e-mail can be conducted
among its members and possibly, other non-members to establish a
database that is necessary and useful in establishing specific
strategies that IMPHIL can take in addressing new issues and
challenges in the market. This should be done on a regular basis to
confront the changing market conditions and ensure competitiveness
of its members and the industry, in general. In other organizations like

18
 FIDIC, for example, this is regularly done to determine emerging trends
in the market. The following are some of the suggested surveys that
can be conducted at different points in time:
o Survey on the amount/percentage share of sales generated by
each company
- classified by industry/sectors served
- classified by services rendered
- classified by source (domestic sales or export sales)
This will assist in identifying trends in the market and market
performance. It will also support any marketing activities
that can be initiated by IMPHIL to improve performance in the
domestic and foreign market.
o Survey on training needs. This will assist IMPHIL in the design
and implementation of a professional development program that
can assist capability building in the industry.
o Survey on professional designations and expertise of
consultants in the Philippines. This will assist IMPHIL in
determining outsourcing strategies especially for larger projects
where cooperative collaborations are formed to better compete
in the market.
o Survey on the extent by which information technology is used in
the companies. This will again assist IMPHIL in determining
information-technology related seminars that can be conducted
through the professional development program of IMPHIL.

Accreditation of Consultants. An accreditation system of management

consultants may be implemented with the assistance of the Department of Trade
and Industry, NEDA and IMPHIL to establish consultancy as a profession and
safeguard the quality of consultancy services in the Philippines.

An accreditation system of management consultants may be implemented

by DTI and IMPHIL to establish consultancy as a profession and to safeguard the
quality of consulting services delivered. It is necessary, that an appropriate
legislation , especially of similar measures like the National Consultancy Act may
be lobbied by IMPHIL and COFILCO for DTI to implement such accreditation.
Accreditation by specialization may provide proper categorization of consultants.
The Certified Management Consultant (CMC) designation on practitioners who
successfully complete its course of study and practical experience requirements
and adhere to uniform code of professional conduct can be given according to
area of expertise or specialization.

A tax incentive scheme for companies including small and medium sized
firms who will avail of consulting services from accredited consultants may
likewise be implemented through proper legislation in order generate more
patronage for local consulting firms. This will create additional domestic demand
for the consulting profession.

19
 An In-depth study on the Management Consulting Services
Industry in the Philippines
“Four issues will shape the consulting industry. Firms that can
come to grips with them are likely to be among the largest and
most successful: (1) technology;
(2) global reach; (3) human capital; and
(4) relationship management.”
- Ed Pringle

Introduction

The General Agreement on Trade in Services (GATS) had set the move
towards further liberalization of international trade in services. It urges
governments to identify and reduce barriers related to market access and
national treatment. Among the services for which schedules of specific
commitments had been set, management consulting services is included.
Nevertheless, even before the GATS, the current trend towards
internationalization and globalization of the world economy resulted to significant
developments in the management consulting sector. The sector is in itself an
open and liberal market. Entry, and work into foreign markets, are easy. This is
because of minimal legal barriers to management consulting services. There
are language and cultural barriers but they do not present serious obstacles to
consulting across national boundaries.

In the line of this events, the Philippine management consulting industry is

a promising sector that has been identified as one of the priority subsectors
where the Philippines can possibly enhance its competitiveness. For this
purpose, this paper aims to achieve the following objectives:
1. determine the scope of the management consulting services industry
2. present the industry structure in both the international and local setting
3. identify the laws affecting the trade of management consulting services
4. identify the conditions in entering foreign markets
5. provide information on existing local and international associations and
their efforts towards enhancing competitiveness of management
consulting industries
6. provide information on the market potential and demand in the Asia
Pacific, Europe, North America and other regions worldwide
7. identify training needs that could enhance competitiveness of the
management consulting services industry
8. identify opportunities and threats faced by the management consulting
services industry
9. determine the degree of competitiveness of the Philippine
management consulting services industry
10. propose strategies and plans to enhance the competitiveness of the
Philippine management consulting services industry.

20
 11. identify areas necessary in the implementation of a performance
monitoring scheme for the industry
1. The Industry

1.1 Scope and Definition

An analysis of the industry would require an understanding of its

coverage and definition. Management consulting service industry is a
subsector of the larger industry of business services. According to
Greiner and Metzger, management consulting industry consists of
individuals and organizations that offer ”professional advisory services
contracted for and provided to organizations by specially trained and
qualified persons who assist, in an objective and independent manner, the
client organization to identify management problems, analyze such
problems, recommend solutions to these problems, and help, when
requested in the implementation of solutions”.

Management consulting services is traditionally structured in

accordance with the structure of management functions–
production/operations, human resource, marketing and finance. The
World Trade Organization (WTO) Classification, which is the basis of most
international trade agreements, is similarly based on the said structure.
The Philippine classification and definition is also presented in this section
to aid in the analysis of the Philippine management consulting services
industry.

1.1.1 United Nations Central Product Classification (UN CPC)

WTO uses the United Nations Central Product Classification

(UN CPC) as a guide in the classification of industries. UN CPC
has more than one existing version that can be used in the
classification, two of these are the Provisional Code and Version
1.0. The Provisional Code, which was developed in 1989, was the
code used during the General Agreement on Trade in Services
(GATS). The CPC Version 1.0, on the other hand was the more
recent version developed in 1997.

According to the UN Provisional Code, management

consulting services industry is among the subsectors classified
under business services. Business services industry includes legal,
accounting, auditing and bookkeeping services; taxation services;
market research and public opinion polling services; management
and consulting services; architectural, engineering and other
technical services. The UN CPC Version 1.0, on the other hand
have more subclassifications as compared to the Provisional Code.
Management consulting services industry falls under the subsector

21
 of consulting and management services, which falls under other
professional, scientific and technical services subsector , which is in
turn under the business and production services industry.
Consulting and management services include management
consulting services, business consulting services, scientific and
technical consulting services n.e.c., computer consultancy services,
computer facilities management services, systems maintenance
services, and other management services, except construction
project management services

Management consulting industry includes firms and

individuals who offer advisory, guidance and operational services
related to general management, financial management, marketing
management, human resources management, production
management and other management consulting services. This
scope and coverage of the management consulting industry
presented differences between the Provisional Code version and
Version 1.0. The Provisional Code includes public relations
consulting services under management consulting industry while
the CPC Version 1.0 separated public relations services into a
different subsector called the business consulting services. Table
1 presents a detailed outline of the scope and definition of each of
the services offered by firms in the management consulting
services subsector.

Table 1. Scope and definition of the management consulting services

subsector based on UN CPC Provisional Code and Version 1.0
Management
consulting services Coverage
General Advisory, guidance and operational assistance services concerning business policy
management and strategy and the overall planning, structuring and control of an organization.
consulting services More specifically, general management consulting assignments may deal with one
or a combination of the following: policy formulation, determination of the
organizational structure (decision-making system) that will most effectively meet
the objectives of the organization, legal organization, strategic business plans,
defining a management information system, development of management reports
and controls, business turnaround plans, management audits, development of
profit improvement programmes and other matters which are of particular interest
to the higher management of an organization.
Financial Advisory, guidance and operational assistance services concerning decision areas
management which are financial in nature, such as working capital and liquidity management,
consulting services determination of an appropriate capital structure, analysis of capital investment
proposals, development of accounting systems and budgetary controls, business
valuations prior to mergers and/or acquisitions, etc. Exclusions: security broking
and fund management services, advisory services on short-term portfolio
management which are normally offered by financial intermediaries.
Marketing Advisory, guidance and operational assistance services concerning the marketing
management strategy and marketing operation of an organization. Marketing consulting
consulting services assignments may deal with one or a combination of the following: analysis and
formulation of a marketing strategy, formulation of customer service and pricing
policies, sales management and staff training, organization of distribution channels
(sell to wholesalers or directly to retailers, direct mail, franchise, etc.), organization
of the distribution process, package design and other matters related to the

22
 Management
consulting services Coverage
marketing strategy and operations of an organization. Exclusions: public relations
services, advertising services.
Human resource Advisory, guidance and operational assistance services concerning the human
management resources management of an organization. Human resources consulting
consulting services assignments may deal with one or a combination of the following: audit of the
personnel function, development of a human resource policy, human resource
planning, recruitment procedures, motivation and remuneration strategies, human
resource development, labour-management relations, absenteeism control,
performance appraisal and other matters related to the personnel management
function of an organization.
Production Advisory, guidance and operational assistance services concerning methods for
management improving productivity, reducing production costs and improving the quality of
consulting services production. Production consulting assignments may deal with one or a combination
of the following: effective utilization of materials in the production process,
inventory management and control, quality control standards, time and motion
studies, job and work methods, performance standards, safety standards, office
management, planning and design and other matters related to production
management. It also includes services provided by agronomists and agricultural
economists. Exclusions: advisory services and design for plant layout and
industrial processes which are normally offered by consulting engineering
establishments.
Public relations Advisory, guidance and operational assistance services concerning methods to
services* improve the image and relations of an organization or individual with the general
public, government, voters, shareholders and others.
Other management Advisory, guidance and operational assistance services concerning other matters.
consulting services These services include industrial development consulting services, tourism
development consulting services, etc. It also includes logistic consulting services
• Public relations services is classified under a separate subsector of business consulting in CPC Version
1.0 but is included under the management consulting subsector in the Provisional Code
Source: United Nations Classifications Registry of CPC Version 1.0 and Provisional CPC.
http://esa.un.org/unsd/cr/registry/regcst.asp.

1.1.2 Philippine Standard Industrial Classification (PSIC)

In the Philippines, the PSIC or Philippine Standard Industrial

Classification of the National Statistics office is used as a basis for
the classification of industries and the subsectors. Similar to the
United Nations Classification, there are different versions of the
PSIC Code, namely the 1977 PSIC and 1994 PSIC. But unlike the
United Nations classification where business consulting and
management consulting services are separate subsectors, in the
PSIC, the subsector is combined in one subsector named as
“business and management consultancy services or activities”.
The definition of this subsector, for the 1977 and 1994 PSIC
codes, coincide and is explained in Table 2.

Table 2. Scope and definition of business and management consultancy

services subsector based on the PSIC Code.
Coverage

1977 PSIC Inclusion

Code 7414 • Provision of advice, guidance or operational assistance to business
• Activities involving public relations e.g. through image building and opinion molding,

23
 Coverage
1994 PSIC to improve the relations of client with the public, the media or others, other than by
Code 85905 paid advertisements, welfare and charity affairs, politics, lobbying
• Activities in connection with planning, organization, efficiency and control,
management information etc.
• Combined management consultancy and actual management e.g. by agronomists
and agricultural economists to farms etc.
• Arbitration and conciliation between management and labor
• Activities of management holding companies

Exclusion
• Computer activities, legal advice, accounting, auditing and bookeeping, market
research, technical advisory e.g. Engineering and Architecture

Source: 1994 Philippine Standard Industrial Classification, National Statistics Office

The WTO definition and the PSIC definition coincide except

for one area: the PSIC includes activities of management holding
companies. This important detail will therefore be taken into
consideration in the analysis of available government data related
to the industry.

In this study, the scope and definition of the WTO will be

used to provide the framework for discussion but taking into
consideration the unique nature of the industry of being very
fragmented and diverse. The industry consists of a group of
companies that serve the needs and wants of their clients as
specified in the coverage in Table 1 but who may also at the same
time belong to related industries excluded in the definition such as
accounting, audit and financial service firms, engineering and
architecture consulting firms, technology consulting firms,
employment agencies, and market research firms.

1.2 Industry structure

The reconstruction after the war, rapid growth of business and

economy, technological changes, emergence of new developing
economies, and expansion of finance, commerce and industry across
different countries are some of the factors that created favorable
opportunities and demands for the introduction, development and growth
of the management consulting services industry.

The development of management consulting services in different

countries are similar yet different in various aspects. This section presents
the industry structure of the management consulting services industry in
two ways- one is based on the global point of view and the other is based
on the situation in the Philippines.

24
 1.2.1 Global management consulting services industry

The management consulting services industry, by its very

nature is global. The larger consulting firms operate internationally
and have offices in various countries.

In 1992, it was estimated that the consulting business sold

over US $ 28.3 billion of advice, which further grew to US $ 43
billion in 1995. At present, the Kennedy Research Group estimated
that the total consulting revenues worldwide is US $ 62 billion and
growing between 10 to 30% annually from country to country.

Based on services offered, it was estimated that technology

planning represents 35 percent of the output, strategic services
have a share of 20 percent and enterprise consulting covers
around 15 percent .

Location of leading firms. Table 3 provides a listing of the

50 largest management consulting firms according to Consultant
News. Forty two out of the 50 firms are homebased in the US,
eight are based in Europe (two are based in France, three are in
London, one is in Netherlands and two are in Germany). But even
with the dominance of the largest consulting firms that eat a
significant share in the market, consulting remains a fragmented
business where thousands of small specialty firms prosper.

Table 3. 50 Largest Management Consulting Firms

Firm Main Office
1. Andersen Consulting Chicago, IL, USA
2. PricewaterhouseCoopers New Yor, NY, USA
3. Ernst & Young Cleveland, Ohio, USA
4. Deloitte Consulting New York, NY, USA
5. Computer Solutions Corporation El Segundo, CA, USA
6. KPMG New York, NY, USA
7. McKinsey & Company New York, NY, USA
8. Cap Gemini Paris, France, EUROPE
9. Mercer Consulting Group New York, NY, USA
10. Arthur Andersen Chicago, IL, USA
11. A.T. Kearney Chicago, IL, USA
12. Towers Perrin New York, NY, USA
13. Booz-Allen & Hamilton McLean, VA, USA
14. IBM Consulting Somers, NY, USA
15. American Management Systems Fairfax, VA, USA
16. Keane Boston, MA, USA
17. Hewitt Associates Lincolnshire, UL, USA
18. Sema Group Paris, France, EUROPE
19. Logica London, United Kingdom, EUROPE
20. The Boston Consulting Group Boston, MA, USA
21. Watson Wyatt Worldwide Bethseda, MD, USA
22. DMR Consulting Group Montreal, PQ Canada
23. CMG London, United Kingdom, EUROPE

25
 Firm Main Office
24. Aon Consulting Group Chicago, IL, USA
25. Cambridge Technology Partners Cambridge, MA, USA
26. Arthur D. Little Cambridge, MA, USA
27. Bain & Company Boston, MA, USA
28. Debis Systemhaus Fasanaweg, Germany, EUROPE
29. PA Consulting Group London, United Kingdom, EUROPE
30. Woodrow Milliman Seattle, WA, USA
31. Origin Eindhoven, Netherlands, EUROPE
32. Telecordia Technologies (formely Bellecore) Morristown, NJ, USA
33. Buck Consultants Secaucus, NJ, USA
34. Metzler Group Chicago, IL, USA
35. Roland Berger & Partner Munich, Germany, EUROPE
36. Technology Solutions Company Chicago, IL, USA
37. Whitman Hart Chicago, IL, USA
38. CTG Buffalo, NY, USA
39. CBSI Farmington Hills, MI, USA
40. Renaissance Worldwide Newton, MA, USA
41. Hay Group Philadelphia, PA, USA
42. Mitchell Madison Group New York, NY, USA
43. Perot Systems Dallas, TX, USA
44. INS Sunnyvale, CA, USA
45. McGladrey & Pullen Schaumburg, IL, USA
46. CIBER Englewood, CO, USA
47. Monitor Company Cambridge, MA, USA
48. First Consulting Group Long Beach, CA, USA
49. Horwath International New York, NY, USA
50. Hagler Bailly Arlington, VA, USA
Source: Consultant News, http://www.kennedyinfo.com/mc/cn50.html

Financial performance of leading firms in the industry.

Table 4 presents the revenue performance of the 1998 leading
global consulting revenues for the top ten firms. It can be noted
that based on the total revenues of US $ 62 billion, the top ten
firms have more than 50% of the share. And the recent growth rate
is often more than the industry average of 10 to 30% annually.

Table 4. Performance of the World’s largest consultancies

Most recent Previous
year’s year’s Growth
revenue revenue rate Effective Number of
Rank Firm ( $ million) ( $ million) (%) Date consultants
1 Andersen Consulting 8,307.0 6,647.0 24.9 Dec 98 53,416
2 PricewaterhouseCoopers 6,000.0 4,286.0 40.0 Jun 98 39,000
3 Ernst & Young 3,970.0 2,950.0 34.6 Sep 98 16,450
4 Computer Sciences Corp 3,500.0 3,000.0 16.7 Mar 99 20,000
5 Deloitte Consulting 3,240.0 2,310.0 40.3 Aug 98 Not available
6 KPMG 3,000.0 2,300.0 30.4 Sep 98 14,000
7 McKinsey & Company 2,500.0 2,200.0 13.6 Dec 98 Not available
8 Mercer Consulting Group 1,543.0 1,338.0 15.3 Dec 98 Not available
9 Arthur Andersen 1,367.6 952.9 43.5 Aug 98 Not available
10 At Kearney 1,234.0 1,061.0 16.3 Dec 98 2,583
Source: Management Consultant International, June 1999 International Accounting Bulletin

Classification of firms. Management consulting firms cater

to diverse problems of management and diverse types of

26
businesses and industry. It is therefore expected that management
consulting service firms are diversified in the services they offer,
markets they serve, status, and organization. Consulting firms can
either be classified based on “service expertise” such as corporate
strategy, human resource development, financial valuation or
materials requirements planning. However some would be
classified based on “industry expertise” such as semiconductors,
telecommunications, social services, among others. And
furthermore some can be classified based on clients served such
as the private sector, government sector or international funding
institution. Firms can also be classified based on status in the
market and organization.

Firms can also be categorized based on status in the

market: the industry elite, the big five, and boutique firms. The
industry elite includes the rich and famous of the consulting world.
These companies provide advice to executives which are
considered as cutting-edge strategy and operations. The best
graduates and MBAs are usually in these firms like Arthur D. Little,
AT Kearney, Bain & Co., Booz-Allen & Hamilton, Boston
Consulting group, McKinsey & Co., Mercer Management
Consulting, and Monitor Co., to name a few. The firms known as
the Big Five are usually those that belong to the biggest accounting
firms that offer also consulting services. These are Andersen
Consulting, Price Waterhouse Coopers, Ernst and Young, Deloitte
Consulting, Coopers and Lybrand, and KPMG Peat Marwick.
Recently, the SEC in US had ordered a separation of the auditing
and consulting units of these firms to safeguard conflicts of
interest. Ernst and Young sold their consulting firm to a French
company named Cap Gemini while Arthur Andersen spun off
Andersen Consulting. Table 5 presents a profile of the big five
firms based on interviews by webfeet.com. The major players in the
global management consulting sector offer a full array of services
from strategy management to technology management. These
services are rendered to both private and public sectors. Their
competitive advantage lies mostly on their ability to develop
services into one that meets the changing needs of their clients.
They still offer the basic traditional consulting services related to
strategy management, financial, operations, marketing and human
resource management but packaged accordingly based on new
trends in technology. And growth areas, as mentioned by these
major players are in the areas of e-business, information
technology, change management and in service industry sectors of
communications, health and finance. Boutique firms are usually
smaller firms that specialize along industry or functional lines. They

27
 have more focus as compared to the Big Five.
(http://www.kennedyinfo.com).

Table 5. Profile of major players in the global management consulting

services industry based on interviews made by Wetfeet.com
Consulting Services and Competitive Advantage Growth areas
Firm Customers
Andersen
Consulting Services Continuously redefine Technology and strategy
management consulting
Technology since the 1950’s e-Economy
management
Continuous growth of Business Process Management
Strategy around 20% per year outsourcing service (which topped
management the US $1 billion mark in revenues)

Process management Growth in the Financial Services

(33 % growth in 1998; US $ 2.5
Change management billion)

Customers Growth in the Communica-tions

Services (30 % growth in 1998; US
Top corporations $ 1.2 billion)
(Fortune 500) from
various industries Growth in the Chemical and Health
Services (42 % growth in 1998)

Deloitte Only firm who has been Invesrment and growth in major
consulting Services able to combine all transformationa reas – strategy,
aspects of enterprise process, technology and change
Enterprise transformation services leadership
transformation and the unique HR
models for each service ,
Strategy under one roof
Management
Known for having a very
collegial work
environment, both with
clients and their people
KPMG Provision of industry-
Consulting Services leading internet based Technology alliances such as those
solutions for clients in the with Cisco to develop global tele-
Internet integration Fortune 1000 communica-tions services across
services companies, the middle industries and with Qwest for
amrket and the public internet-based applications
Customer relationship sector management, hosting and service
management providing
Ability to provide rapid
Supply chain implementations using
management preconfigured ,
templated solutions
Knowledge
management Most experienced
consulting workforce
Financial averaging 13.5 years of
management industry experience

28
 Consulting Services and Competitive Advantage Growth areas
Firm Customers

Human resources Strategic alliances with

management Cisco, Microsoft and
Qwest
Strategy
management Revenue growth outpace
the consulting industry
Branding average

Design/Media

Infrastructure
technology enabling

Hosting/
Outsourcing

Customers

From those in the six

industry lines of
business:

1)Communiications
and Content
2) Consumer
and Industrial
markets
3) Financial
Services

4) Health Care
5) High Technology
6) Public Sector
Pricewater- Few of the full-service e-business consulting
house Services firms around (accounted for 40% growth in
Coopers 1998) which will be used for the
Training Programs following :

Human Resources building customer loyalty

Solutions
achieving market leadership
Outsourcing
optimizing business processes
e-business consulting
reaching new markets

enhancing human capital

harness technology

manage risk and compliance

Ernst & Young Intensive use of internet e-business
Services
Most Admired Investment in Patent & license
Advice on tools in tax, Knowledge Enterprise exchange, the first e-business
accounting and (MAKE) awardee marketplace for safe and efficient
corporate finance through the Knowledge sale of patents, licanses and other
Web that gives access to intellectual property
Corporate finance more than 651,000

29
 Consulting Services and Competitive Advantage Growth areas
Firm Customers
documents and 700
Online security Lotus Notes databases

Risk management

Valuation of
intangibles

E-business
acceleration

Source: http://www.wetfeet.com

According to the International Labour Organization’s

reference on Management Consulting, there are seven types of
consulting organizations. These are ; (1) large multifunctional
consulting firms; (2) management consulting services of major
accounting firms; (3) small and medium-sized consulting firms; (4)
sole practitioners; (5) consulting professors; (6) consulting services
of management institutions; and (7) non-traditional suppliers of
consulting services.

Large multifunctional consulting firms are firms referred to

as “full-service” management consulting firms which are able to
provide “total service packages”. They are usually multinational
consulting firms that prefer to serve large and multinational clients.
They also usually develop specialized services to make their
organizations competitive – specialization in either a sector or
service. It is a debatable issue on whether offering a full array of
services is a competitive advantage for these firms. Some would
argue that the convenience of having a single “one-stop-shop” is
worth it if one would not compromise the quality of service
provided.

Major consulting services of accounting firms developed as

major accounting firms organized their MAS or management
advisory services units. Recent years saw the growth of these units
which made many big accounting and audit firms move towards the
process of separating their auditing units with their consulting units.
Ernst and Young sold its consulting unit to European powerhouse
Cap Gemini Group for US $11.3 billion. Pricewaterhouse Coopers
said that it would also separate its accounting and consulting
divisions and KPMG has filed with SEC to spin off its consulting
unit. Arthur Andersen and Andersen also has already split. The
conflict of interest of the two units also made it proper to separate
the two units. Management consulting firms which were developed
from audit and accounting firms benefit from the expertise, image,
reputation, client , contacts and assignment opportunities that these

30
accounting firms provided. In the beginning, services offered by
these firms are in the same lines of accounting and finance. But at
present, it can be seen that services of these firms developed into
other areas such as human resource, operations, information
systems, control systems and even strategy management.

Small and medium-sized consulting firms embraces a variety

of organizations which may be limited to a (1) specific
geographical area; (2) specific technical areas such as corporate
strategy, training, quality control, ISO management, environmental
auditing, compensation survey etc.; and (3) specific sectors in the
market such as industries (textile industry, telecommunications
industry, hotel and restaurant, insurance etc.) or markets (public
sector, private corporation sector, government organizations and
non-government organizations).

Sole practitioners or independent consultants outnumber

consulting firms. In the United States, 45 percent of all consultants
are reported to be independents. They have some industry or
functional specialization and get hired on a project basis either by
another consulting firm or a client company. The existence of a
number of sole practitioners point out to an interest of some
organizations in the market to work with independent individuals.
These consultants may either be a generalist or a specialist. A
generalist emphasizes on a broad management experience, or
problem solving and behavioural skills, A specialist works in a
narrow technical area. Preference for independent consultants
may arise from the need of the market for a highly personalized
and flexible approach to problems. In addition, costs may also be a
consideration. Most often than not, it is less expensive to hire an
independent consultant as compared to getting a contract with a
consulting organization. Sole practitioners may be able to work
with organizations through informal networks. Small organizations
may have more preference for individual consultants while larger
institutions may prefer sole practitioners for smaller assignments or
specialized tasks. In some instances, independent consultants are
also able to get projects through formal networks with consulting
organizations and firms. Consulting organizations and firms who
need specialists in specific projects maintain a database of
possible external consultants who can be tapped, whenever
necessary.

Consulting professors are also independent consultants.

But they are different since sole practioners makes a living from
consulting. Consulting professors are involved in consulting on an
part-time but fairly regular basis. In the United States, recent years

31
have seen the development of new ideas and perspectives from
the university especially in the Professional Schools of
Management . The main contribution of the consulting professors
are these new ideas through the combined efforts in teaching,
research and consulting and not merely routine consulting work. A
small group has even evolved to attain the level of “guru”
consulting”. Their output can be seen in a number of management
books available and read by a number of executives worldwide.

Consulting services of management institutions are usually

found in developing countries to foster local management
consulting capabilities. These may be in the form of productivity
centers or business schools. Some may have full time consultants
or would just have some staff and tap consultants from the
institution’s teaching or research personnel.

Non-traditional suppliers of consulting services include

those whose main function is something other than consulting. The
concept of adding value to one’s product led to the development
of these group of consultants. Consulting is viewed as a means to
add value to the products or services offered by the company.
Some of the members of these group are the following: (1)
suppliers and vendors of communication, and computer equipment;
(2) computer software houses; (3) commercial and investment
banks, brokers, insurance companies; (4) suppliers or equipment
and turnkey projects in energy, transportation, drinking-water,
irrigation, and other utilities; (5) economic, statistical, and sectoral
research institutes and information centres; and (6) other
organizations that have turned their internal management service
groups into external consulting services. These non-traditional
suppliers are also sometimes referred to as the “think-tanks” of the
organization. Examples of services offered are strategic studies,
model building, forecasting of consumer demand, systems analysis
and design, and plant and office automation. Services offered are
usually research or technology-based. But research should also not
be equated to consulting. Research only forms as the basis of
ideas in consulting but research itself is an independent process.
Even in the classification of firms, a research organization is
different from a consulting organization but are mostly
interdependent.

Recent years also saw the growth of the number of internal

consultants in various organizations. They were formed to provide
consulting services to other units in the same organization. There
are many who criticize these internal consultants. Many say that
they can be useful staff function but does not deserve to be called

32
as management consulting because of lack of independence and
objectivity. In some cases, what is done is to make use of both
external and internal consultants to work in teams. As early as
1976, the Institute of Management Consultants in the United
Kingdom agreed that the term independent practice “shall include
consultants engaged as in-house consultants who meet the
required standards of knowledge, experience, and competence and
are free at all times to offer objective and independent advice”.

Competition. There is very high competition in the industry

as reflected by a market where according to Milan Kubr, “supply
has matched and even outgrown demand”. This is indicated by the
(1) increasing number of players that enter a market characterized
by minimum legal barriers for entry; (2) growing sophistication of
clients who become more selective resulting to the development of
a number of new and specialized services to address the
complexity of new management problems; (3) increase in efforts
towards advertising and marketing of consulting services; and (4)
continued internationalization of consulting firms.

Competition is usually based on the following: (1) skills and

expertise of consultant/s; (2) development of new executive
management tools and/or services; (3) reputation/track record as
an expert in providing the service; and (4) network/s of clients
established by consulting firms/individuals; and (5) price.

Skills and expertise of consultants. Consulting is an idea-

driven profession. Consulting firms boom and fade as tools such as
reengineering go in and out of fashion. But for majority of
consultancies, the most important asset is still its people. Over
time, consulting firms that do the best work for clients are the ones
with the best people. Hiring of consultants is an important factor in
the success of management consulting firms. Few consultants
today get hired simply by being smart. Both service expertise and
industry knowledge based on educational background and
experience are prerequisites before being hired.

Development of new executive management tools and/or

services. As more and more complex management problems are
being addresed by consultants, various services offered by
management consulting firms are being developed and serve as
one of the factors that drive competition in the industry. There are
efforts made to increase long-term benefits derived by clients from
consulting projects. Table 6 presents a profile of some of the
management consulting services developed by various firms.

33
 Price. According to ILO, the basis of price for consultancy
charges and fees are based on (1) salaries and fees of consultants
which may vary depending upon the specialization, level, and
experience of the consultant; (2) marketing policies such as fees
charged by competitors, fees for different market segments,
promotional fees for new services, subsidized fees for some
countries through government financing of consulting services
made for small enterprises, fees determined by clients (based on
their budget allocation), and congruency of fees with consulting
company’s image.

Table 6. Profile of various management consulting services offered

Management
Consulting Prominent global firms offering the
service Description service
Strategy Advisory, guidance and operational A. T. Kearney (Chicago, IL)
Consulting assistance to companies in the area of Advisory Board (Washington D.C.)
strategic planning for the next two to five Andersen Consulting Strategic
years. This can involve choosing a strategy for Services (Chicago, IL)
growth , making suggestions for restructuring, Arthur D. Little (Boston, MA)
providing international expertise, suggesting Bain & Co. (Boston, MA)
acquisitions/divestitures and revitalizing Booz Allen & Hamilton (New York,
leadership. NY)
Boston Consulting Group (Boston,
MA)
Conner & Company (New York, NY)
Braxton Associates (Boston, MA)
Coopers & Lybrand (New York, NY)
Corporate Decisions (Boston, MA)
CSC Index (Cambridge, MA)
Dean & Company (Vienna, VA)
Delta Consulting group ( New York,
NY)
Gemini Consulting (Morristown, NJ)
GeoPartners Research (Boston, MA)
LEK/Alcar Consulting Group (Boston,
MA)
Linkage (Lexington, MA)
McKenna Group (Palo Alto, CA)
McKinsey & Co. (New York, NY)
Mercer Management Consulting
(Lexington, MA)
Mitchell Madison Group (New York,
NY)
Monitor Company (Cambridge, MA)
Parthenon Group (Boston, MA)
Piper Trust (London, UK)
Strategic Decisions Group (Menlo
Park, CA)
Strategos (Palo Alto, London)
Symmetrix (Boston, MA)
Vertex Partners (Boston, MA)
Systems Advisory, guidance and operational Andersen Consulting (Chicago, IL)
Consulting assistance to companies in the area of Arc Partners (New York, NY)
optimal configuration of their information Cap/Gemini America (Morristown,
systems, integration of information systems, NJ)
introduction of client-server computing, Claremont Technology Group
participating in software design and (Seattle, WA)

34
 Management
Consulting Prominent global firms offering the
service Description service
recommending hardware purchases. CSC Index (Cambridge, MA)
CTG
Digital Consulting (Maynard, MA)
EDS (Plano, TX)
Ernst & Young (Chicago, IL)
IBM (Armonk, NY)
James Martin (Fairfax, VA)
Princeton Consultants (Princeton, NJ)
Simulate (Philadelphia, PA)
Technology Solutions (Chicago, IL)
Tower Group (Newton, Ma)
Trans-Tech (Chicago, IL)
Process- Advisory, guidance and operational A. T. Kearney (Chicago, IL)
Oriented assistance to companies in the area of AT & T Solutions (Chicago, IL)
Consulting increasing productivity by improving business Boston Consulting Group (Boston,
processes. M.A.)
Coopers & Lybrand (New York, NY)
CSC Index (Cambridge, MA)
Ernst & Young (Chicago, IL)
Hackett Group (Hudson, OH)
JLA Consulting International
(Toronto, CA)
Price Waterhouse
Finance-Related Advisory, guidance and operational Andrew Kalotay Associates (Sea Cliff,
firms assistance to companies in the area of finance NY)
such as pricing of securities, strategies for A.B. Laffer & associates (Los
creating shareholder value, business Angeles, CA)
valuation, economic forecasts and analysis or Boston Consulting group (Boston,
suggestions for Treaury management, MA)
Coopers & Lybrand (London, UK)
Hackett Group (Hudson, OH)
Houlihan Lokey Howard & Zukin (Los
Angeles, CA)
Ibbotson Associates (Chicago, IL)
LEK/Alcar Group (Boston, MA)
McKinsey & Co, (New York, NY)
Mitchell Madison Group (New York,
NY)
Stanford Consulting Group (Menlo
Park, CA)
Stren Stewart & co. (New York, NY)
Treasury Management Associates
(Aurora, Co)
Wilshire Associates (Los angeles,
CA)

Human Advisory, guidance and operational A Foster Higgins

resources assistance to companies in the area of making Automated Concepts (Chicago, IL)
Services decisions on hiring, compensation benefits and Buck Consultants
packages, pension funding decisions, benefits Cambria Consulting (Boston, MA)
of a diverse workforce, employee development Forum Corporation (Boston, MA)
programs, organizational learning and training. Harbridge House
The Hay Group
Hewitt Associates (Lincolnshire, IL)
HRStrategies (Detroit, MI)
Linkage (Lexington, MA)
Milliman & Robertson
Management Science Associates
SIA Consulting Group

35
 Management
Consulting Prominent global firms offering the
service Description service
Sibson & Company (Princeton, NJ)
Wyatt Group (Chicago, IL)
Towers Perrin (New York, NY)
Source: http://www.cob.ohio-state.edu

Recent trends in global management consulting, as shown

in Table 5, are moving towards the convergence of management
and business processes and information technology such as e-
business consulting making traditional consulting practices in
danger of becoming less relevant in the Internet age specifically for
private client companies. Information technology specialists are
usually among the fastest growing sectors in the consulting
industry. WTO separates IT services in a different subsector,
however, some sectors in the industry consider them as direct
competitors that eat a share in the market.

Reputation/track record as an expert in providing the service

Another source of competition is based on reputation and track
record as an expert in providing the service. These are usually
gained after years of experience and after handling a number of
consulting projects on one’s specialization. Smaller and new
players , at times, have difficulty and face stiff competition for lack
of experience and track record as compared to larger firms.
Clients would usually require a listing of previous consulting
projects and clients of the consulting firm or individual together with
the profile (academic achievement and working experience) of the
consultants directly working with the firm.

In the internationalization of management consulting service

firms, the country’s image and reputation as a source of credible
consultants with reliable management tools and services for
specific clients’ needs also play an important role in the
competition. US is now known for most of the management
consulting services offered. Europe is known more for economic
and financial management services offered.

Network/s of clients established by consulting

firms/individuals. Lastly, the network/s of clients established by
consulting firms/individuals is a major factor in industry competition.
Marketing of services is usually based on personal networks, both
formal and informal. These are usually gained through exposure to
previous consulting projects and/or work experience of consultants,
industry and/or professional associations. Larger firms have
recently engaged in advertising to build its brand name and
reputation.

36
 Customers . By location, the largest market was estimated
to be in the US where a US $ 15.2 billion was spent for
management consulting services industry in 1992, followed by
Europe with US$ 7.6 billion, and Asia with US $ 3.2 billion. The
rest of the world spent an estimated US $ 2.3 billion.

The social, technological, economic and cultural

environment of business and government is changing rapidly. This
corresponds to the changes in the customers and demand for
management consulting services. The changes are characterized
by : (1) increasingly sophisticated clients who, on their own, can
handle present management problems formerly handled by
consultants; (2) increase in need for consultants who can handle
difficult, risky and new tasks that would require a great amount of
information, speed of analysis and action ; (3) an approach to
problems with an interdisciplinary, intersectoral perspective,
innovative, with understanding of social and environmental
implications; and (4) availability of special expertise.

Trends also indicate that downsizing in recent years in many

companies led to increase in demand for consulting firms to carry
out activities that companies no longer have the in-house staff to
perform. Outsourcing of information systems, market research,
human resource planning, sales force development, and strategic
planning have been demanded by corporations. At the same time,
downsizing resulted to increase in number of former executives
who become consultants.

Also, a fresh demand for consultants to install electronic

commerce systems and re-engineer business processes to take
advantage of internet fluorished in the past years. This type of
services is expected to lead to increase revenues to at least 12
percent in 2000 to US $113 billion annually. These trends gave
rise to new players who offer purely internet-based services. Some
of the biggest consulting firms in this area are Viant and Scient.
These two, along with other internet consulting firms had affected
the big management consulting firms that lose e-commerce deals
with clients. The scenario had led many consulting firms to
undergo their own e-business makeovers. They have been either
attracting young, technical people into the company or have been
forming partnerships with technology firms.

The buyer of consulting firms usually decides on the

selection of the consultant based on (1) track record; (2) reputation
; and (3) price. Good consulting remains expensive. Depending on

37
the type of work, fees can range from US $ 100 to US $ 500 per
hour. Fees have not risen significantly for 30 years, after adjusting
for inflation.

Suppliers. There are two major resources of management

consulting firms, these are the human resources and technology.

Human resources refer to quality and quantity of consultants

recruited and developed by management consulting service firms.
Table 4 presents the number of consultants in the world’s largest
firms. These are made up of generalists and specialists. They
come from various disciplines. The nature of services offered by
the firms determine the type of expertise needed by the
management consulting firms. Recruitment of consultants are
usually based on the following criteria: (1) personal qualities like
confidence, sense of organizational climate, integrity, and
interpersonal skills, among others; (2) education which may range
from a college level for staff to masteral and doctoral level for
consultants; (3) practical experience based on quality and years of
experience in the industry; and (4) age at which candidates are
recruited.

The two major sources of human resources are business

enterprises and universities. Some consulting firms advertise in
business and management journals and periodicals. Others also
go to schools, particularly professional business schools and recuit
MBAs who may start as a new staff and eventually be trained as a
junior to senior consultant or even a partner.

Technology refers to development and implementation of

new management tools and services based on information and
ideas. The suppliers of ideas are basically the consultants.
Information is obtained from journals, books, and other publications
as well as information resource centers like the government,
academic institutions and industry associations. Consulting firms
depend on a strong database of information so as to make a good
analysis and provide wise recommendations to clients.

In recent years, the movement of the customers towards

internet-based technologies also led to increase in the need for
technology firms to supply the needed software technology and
infrastructure needed by management consulting firms. E-
commerce and internet software firms are eager to build long-term
support for their products, particularly at the largest corporations.
One of their ways is through people like the management and
technology consultants who often install and maintain enterprise-

38
level software and processes. Microsoft recently irked a US 1 billion
pact with Andersen Consulting to create a new firm called Avanade.
It will make Microsoft a preferred vendor for Andersen clients.
Twenty-five thousand Andersen employees will receive training in
Microsoft products and Avanade will hire 3,000 technologists to
work exclusively on Microsoft-related installations. Similar deals
have been signed by KPMG and Cisco and KPMG and Qwest.
These are seen to strengthen the management consulting firms but
on the other hand, it will also limit the consultancies’ customer
diversity especially when certain IT platforms or hardware fall out of
favor.

Substitute services and New entrants. Management

consulting services are as diverse as the problems posed by
managers and executives. This very nature of a highly evolving and
diversified service makes it difficult for substitute services to come
in. But the advent of information technology resulted to the role of
IT providers as both suppliers, new direct competitors, and
substitutes depending upon the type of IT provider.

Services offered by internet-based consultancies became

substitute products for reengineering solutions and efforts of
traditional management consulting firms. While some technology
firms tie up with management consulting firms to either broaden
services pr converge with services provided by management
consultancies. There is also a rise in the growth of purely e-
business consulting firms. And this poses a threat to the
management consulting firms.

1.2.2 Philippine management consulting services industry

The Philippine’s weak database, particularly for a relatively
small sector such as management consulting services, makes it
difficult to have current and reliable data on this dynamic and
evolving industry. Nevertheless, because of the nature of the
management consulting services industry of being
internationalized, then there are a number of trends in the global
management consulting services industry that is also reflected in
the local management consulting services industry.

Contribution to the economy Based on the original figures,

the business and management consulting services industry,
contributed 0.62% to the Philippine economy and 21.24% to the
business services industry in 1994. The industry reported PhP 6.7
billion in revenue sales in 1994 which is 20.18% of the total
revenue/sales of the business services industry. There are a total of
9,376 employees in the sector. This is 5.01% of the total

39
 employment in the services industry and 0.04% of the total
employment in the Philippines. Since the PSIC definition followed
by NSO includes activities of management holding companies and
do not include output of management consulting services rendered
in accounting and audit firms, engineering consulting firms, market
research and technology consulting firms then these estimated
figures would not really represent the real output of the industry.
Nevertheless these estimates would give some indications on the
size of the industry. This means that the output of firms whose
main activity is management consulting contributed not more than
0.62% to the Philippine economy (if the management holding
companies’ output is excluded) in 1994.

Table 7. Contribution of the business and management consulting

services to business services industry,1994 (values in thousands of pesos)
Percentage Percentage
Percentage contribution contribution
contribution on Revenue/ On
on GVA of Sales of the employment
Size of firms business business Employ- in the
Gross services services ment business
Value industry Revenue/ industry services
Added (%) Sales (%) industry
(%)
Small firms 115,617 6.69 243,824 7.77 1,190 4.82
(less than 10
employees)
Large firms 4,633,649 22.46 6,456,294 21.47 8,186 5.04
(10 or more
employees)
Total 4,749,266 21.24 6,700,118 20.18 9,376 5.01
Source: 1994 Census of Establishments, National Statistics Office

To assist in having more reliable estimates in determining

the profile of the Philippine management consulting industry, the
available government data which primarily used the PSIC definition
would still be presented but to be complemented by some data
obtained through validation. Validations were made either through
telephone survey or through internet research to obtain a listing of
firms whose main activity is management consulting.

Sources of data came from the listing of the SEC’s Top

12000 firms from 1996 to 1998 and Top 5000 in 1999, SEC’s
listing of registered firms under business and management
consulting sector, the Institute of Management Consultants of the
Philippines’ directory of members and existing internet and
telephone directories. Although limitations of the validation include
the following:
1. Data is mostly limited to corporations. Majority of the
players as indicated through NSO data are small firms

40
 which may have been established as single
proprietorships and partnerships but their number and
sizes cannot be verified due to lack of available data.
2. Data do not include individual consultants who also are
included in the industry.
3. Data is limited to those with working telephone numbers
and websites so that their existence is validated.

Classification of management consulting firms and other firms

that deliver management consulting services. In the Philippines,
management consulting firms can be classified in a similar manner
as global management consultants which includes (1) large
multifunctional consulting firms or “full-service” firms with the
capability to provide total service packages but were able to
develop specific core competencies; (2) Firms which started from
accounting firms and now offers consulting services; (3) Firms
which offer limited/specific areas or services for specific
sectors/market in the industry; (4) Sole practitioners or independent
consultants; (5) Consulting professors; (6) Internal consultants; and
(7) Non-traditional suppliers of consulting services whose main
activities are other than management consulting (suppliers and
vendors of technical equipment, software, investment houses,
economic, statistical and research institutes, and learning institutes)

Some available information on major players in each of

these subsectors are shown in the tables that follow.

1. Large Multifunctional consulting firms or “full-service” firms with

the capability to provide total service packages but were able to
develop specific core competencies.

These firms mostly cater to both public and private sectors of

the market. They usually are engaged in delivering consultancy
services to the largest players in the different industries, those
companies which belong to the Top 1000 in the Philippines.
They usually employ people from different fields of
specialization and are usually affiliated with globally known and
reputable consulting companies.

Table 8. Large multi-functional consulting firms or full- service firms in

the Philippines
Company Name Description of Firm
SGV & Company The company is now considered as the largest multidisciplinary
professional services organization in the country. Services are in the
areas of business consulting, corporate finance, e-business, risk
consulting, human capital development, outsourcing, and tax
services. It is an Arthur Andersen company.
Louis Berger It offers professional consulting services in the areas of civil,

41
 Company Name Description of Firm
structural, mechanical, electrical, and environmental engineering,
program management, planning, environmental sciences, cultural
resources, information services, economics, policy and management
analysis, construction management and support. It is part of the
global group of Louis Berger companies.
Accenture It is formerly known as Andersen Consulting and affiliated with SGV &
Company. It offer business consulting and technology solutions. The
Business Consulting office offers services in the areas of strategy and
business architecture, change management, business processes,
customer relationship management, finance and performance
management, human performance management and supply chain
management. The Technology Business Solutions Center provides
solutions engineering, solutions operations , technology research and
management services.
EDS International The company has the capability of offering services in four business
lines: Management consulting, e-Solutions, business process
management and information solutions. The Management consulting
is provided by AT Kearney, a global player in management
consulting which was acquired by EDS..
Manila Execon Group It is an affiliate of the global company Kepner-Tregoe engaged in
services related to strategy formulation and implementation,
workplace transformation, systems and cost improvement, redesign
of human performance system, and skill development.
Iberpacific It is the Asia-Pacific consulting subsidiary of Soluziona Internacional
of Spain and also gets its experience and expertise from another
company which is Meralco. It provides consulting services in the
areas of business intelligence, enterprise resource planning
solutions, internet consulting services, IT services, and customized
services in the areas of public works development, in the energy
sector and environmental management technologies.
Pricewaterhousecoopers The company offers strategy and general management consulting
services, financial amnagement consulting, organization and human
resources development consulting, and information technology
consulting. Pricewaterhousecoopers It is presently affiliated with
Joaquin Cunanan & Company
Leverage International The company provides a comprehensive range of research and
Consultants consulting services such as strategy consulting and facilities
management, management services, project development services ,
project planning information technology services, and export
development services for both public and private sector clients.
Neville Clark Phils The company is an affiliate of Neville Clark absed in UK. Services
include consulting and assiatnce of executives in the areas of
manufacturing systems development, new product introduction,
operational performance improvement, business integration, supply
chain management, change management, problem centred training,
business re-engineering, benchmarking and strategic application of
technology.
DTT (Deloitte Touche Tohmatsu) The company is presently affiliated with CL Manabat & Co. after its
Consultancy (CL Manabat & disaffiliation with Diaz, Murillo and Dalupan. It provides general
Company) business advisory services, financial advisory, business development
and strategy consulting, tax services, outsourcing services and audit
services.
AYC Consultants, Inc. The company offers services which includes market research,
feasibility studies, country risk analysis, investment assistance,
strategic planning, policy research and conference organization.

2. Firms which started from accounting and audit firms and now
offers major consulting services

42
 Accounting and audit firms usually have management
service units to deliver consultancy services to their clients. But
as the global industry moves towards separation of the
accounting and audit unit with the management services unit to
safeguard controls and conflicts of interest, the Philippine
accounting and audit firms also has moved towards affiliation
with some of the biggest consulting firms which also started as
accounting firms to strengthen their management services
competence. Initially, core competence remains to be in the
area of financial management consulting. But eventually, as
what happened to SGV & Company, these companies evolve
into companies that are capable of offereing full-package
services to its clients.

Table 9. Firms which started from accounting and audit firms and now
offers major consulting services
Company Name
KPMG (Laya- Mananghaya)
DTTI Consultancy Phils (Diaz,
Murillo, and Dalupan)
Alba Romeo Management
Consultants
RM Management Consulting
DTT (Deloitte Touche Tohmatsu)
Consultancy (CL Manabat &
Company)
SGV & Company
Pricewaterhousecoopers
(Joaquin Cunanan)
Description of Firm
The company offers general management consulting services. KPMG
was formerly affiliated with Diaz, Murillo and Dalupan and is now
presently affiliated with Laya Mananghaya. At present activities are
mostly concentrated in financial management consulting.
The company offers general management services and financial
management services. It was formerly affiliated with Deloitte Touche
Tohmatsu until its disaffiliation in 1999.
The company specializes in auditing but offers consulting services in
human resource, general management, information technology and
legal areas. It is presently affiliated with BDO.
The company offers general management consulting and auditing,
accounting and tax services.
(see previous table)
(see previous table)
(see previous table)

3. Consulting firms which are limited to offering services in specific

areas or a specific market/sector/industry

There are management consulting firms who remain to

offer services in either limited areas or only to a specific sector
or market. This may arise as a result of two existing situations.
One, the company may not be big enough, therefore lack the
resources and capability of expanding its present line of
services or hiring other people specializing in different areas of
expertise. Second condition is when a company deliberately
decided to concentrate on a particular niche in the market
through differentiated services or serving a specific
sector/industry/sector.

43
 a. Firms concentrating in specific, limited areas like
general management, human resource, prodiuction,
marketing, franchising, financial management, risk
management and development or policy studies

General Management

Companies who offer general management services are

usually small to medium sized businesses who customized their
services according to the needs of their present clients. These
companies do not usually require consultants or personnel who
have very specialized areas of expertise.

Table 10. General Management Consulting Firms

Company Name
Inno-Vision Strategic
Development Consulting Inc.
BSA Sales & Management
Consultancy, Inc.
CLRV Neo-Synergy
Description of Firm
The company was only formed last year (2000) by educators from De
La Salle University-College of Saint Benilde to help Philippine
entrepreneurs in the various facets of business.
The company offers services that are customized according to the
needs of the clients in the various areas of business such as marketing,
human resource, operations and finance.
The company is Filipino owned and concentrates on delivering general
management consulting and financial services.

Human Resource Management

These companies usually offer services in the field of human

resource management. At times certain companies concentrate
on executive recruitment consulting, training, organizational
development, change management, or employee benefits and
compensation.

Table 11. Human Resource Management Consulting Firms

Company Name Description of Firm
Impact Consultancy Group, The company is a professional human resource and organizational
Inc development consulting firm engaged in training and top management
consulting.It serves both private and government clients in the
Philippines and its ASEAN neighbors.It is affiliated with Strategic
Consulting Services nternational, a UK-based worldwide management
consulting firm granting IMPACT with the license to use programs and
systems developed in its worldwide network of offices.
Asia Business Consultants, The company’s core competencies include manpower development
Inc. and training programs/services, executive recruitment, strategy
formulation, feasibility and industry studies and institutional
development
Ancilla Enterprise The company is affiliated with Enterprise Development group in US. It
Development Consulting offers consulting, training and research studies with its core foundation
in human resource and organization development.

44
 Company Name Description of Firm
Guthrie Jensen Consultants, The company is a training and management consultancy firm that offers
Inc. a wide range of programs in the area of organizational development,
sales and marketing, sutomer relations, and organizational
communication. Services include public and in-house seminars as well
as customized training programs for executives, management,
supervisors, sales, and service personnel.
George Garrett Guillford The company offers executive search and recruitment consulting
Management Consultants services.
Ward Howell ZMG The company offers executive search and recruitment consulting
services.
John Clements Consultants, The group has seven companies that specialize in the area of
Inc. recruitment. It offers specialized services in the areas of executive, staff
and technology employees recruitment. Processing and documentation
for the dispatch of employees to other countries is also done by the
company. It also has a Human resources Development Consulting
Division that provides development and design of training programs for
clients and conduct of public seminars for clients from different
industries.
Asia Partnership Philippines The company is an international executive search/recruitment
(APPI) consultancy. The company searches for middle to senior management
level professionals. It specializes in “cross-cultural” recruitment giving
attention to the corporate culture of its clients that come from different
parts of US, Europe and the Asia-Pacific.
Amrop International The company is a partner of the international executive firm Amrop
International which has 81 offices in 52 countries. Services include
executive search , management audit and assessemrent.
Watson-Wyatt Phils This global consulting company deliver services in two specific areas
that were combined: financial management and human resources
management. Services include benefits consulting, investment
consulting, insurance and financial services, human capital
development, Strategic Rewards® which aligns rewards system to
strategy of company and human resource technologies.
Solutions, Inc The company provides human resources consulting (job evaluation,
development of salary structure and employee communication),
employee benefit consulting , risk management consulting and broking
services (insurance).
Aedan Associates The company offers training services for employees and at the same
time engage in the recruitment and testing of personnel for its clients
Stream Training It is a training company that offers training development programs for
Consultancy supervisory training, team building, improvement of selling skills of
sales people and planning skills improvement.

Financial Management

These companies offer advisory services in the areas of

investment, cost management, profit improvement and portfolio
management.

Table 12. Financial Management Consulting Firms

Company Name
Capital Strategies
Equity Managers Asia, Inc
Incuventure Asset Managers
Description of Firm
The company provides independent corporate finance advice to
companies. It is affiliated with Capital Strategies at UK.
The company is a purely Filipino-owned company engaged in offering
financial advice to local clients.
The company is a purely Filipino-owned company engaged in offering
financial advice to local clients.

45
 Marketing Management

These companies offer consulting services related to

Formulation and implementation of specific marketing strategies
such as customer loyalty programs, direct marketing, image
building and other areas.

Table 13. Marketing Management Consulting Firms

Company Name Description of Firm
Motivation Asia Phils The company is affiliated with Performance Asia Group and Motivation
Asia Thailand. It focuses on consulting and research services in the
area of Strategic Incentive and Loyalty marketing solutions. .
TeamAsia, Inc The company is a corporate communications consulting firm with core
competencies in events conceptualization and management, direct
marketing and promotion, and corporate identity development. The
company also organizes public seminars where world-renowned
international business leaders and gurus are invited as speakers. It
established a company in Hongkong that specializes in training.

Production/Operations Management

Table 14. Production Management Consulting Firm

Company Name Description of Firm
Asiatech Resource The company addresses the requirement of the manufacturing sector
Management Corporation for expert advice and assistance on program, project and technology
management. Services include consulting regarding plant and process
definition and design, cale up implementation, project feasibility and
financial study, process optimization, equipment fabrication and
installation, industrial plant set up, contract management, equipment
repair and maintenance and other special projects and services.

Risk Management

The companies found to specialize in risk management

consultancy are usually affiliated with UK-based companies
where risk management consulting is a common practice.

Table 15. Risk Management Consulting Firms

Company Name Description of Firm
Pinkerton Consulting, Inc. It is a company affiliated with Pinkerton Consulting and Investigation
Services UK, the largest and most established commercial investigation
agency in the world with over 60 offices globally. The company offers
sull service in the area of intellectual property , investigative business
and security audit and consultancy.
Control Risks The company is affiliated with Control Risk in UK and is engaged in the
business risk consultancy service. It includes political and security risk
analysis, confidential investigations, pre-employment screening,
security consultancy, crisis management and response and information

46
 security and investigation.

Development and Policy Studies

There are also a number of companies that concentrate in

consulting services in the development work area such as
agriculture, fisheries, forestry, environment, gender issues, local
governance, agribusiness, economics, industry studies, rural and
urban planning and community development. Clients usually are
concentrated on government and international funding
institutions. Linkages are usually established with non-
government organizations, academe and research institutions.
Companies in these sector usually gain ground for international
exposure. Projects usually require multidisciplinary skills from
economics, business, engineering, development studies, social
sciences, agriculture and environmental sciences.

Table 16. Management Consulting Firms involved in development and

policy studies/work
Company Name Description of Firm
Madecor Group The group of companies in Madecor specializes in providing
consultancy, training and management services to development
projects of government agencies as well as the private sector in the
Asia Pacific.
Orient Integrated The company provides consultancy, training and management
Development Consultants, services to development projects of government, private institutions,
Inc. research institutions and academe. Services include areas like
integrated regional/rural/area development, environmental resource
management, institutional development and local governance.
Pacific Rim Innovation and The company offers services to both public and private sectors
Management Exponents ranging from pre-investment and feasibility study preparation to
detailed engineering design, project management, project benefit
monitoring and evaluation, design of management information
systems, policy review and formulation, design, packaging and
conduct of training programs, and organization of national and
international conferences.It is presentlyr egistered in the roster of
consulting firms of ADB, World Bank and FAO.
SEA Consultants The company’s core competencies include institutional strengthening,
capacity building, training, policy and planning, and financial
management in agriculture, finance, areas of urban and regional
development, education, toursim, transportation and forestrty.
Economic Development The company was first established to serve as private management
Foundation consultancy and training unit for private firms. Eventually it evolved
into a company that focuses on project management, implementation,
training, organizing, advocacy, and research in major areas of concern
like reforestation, environmental and coastal resource management,
and environmental training.
IDP Consult, Inc. The company is based in US and specializes on development,
economic and policy studies. Many of its projects include those in
Asia-Pacific region particularly USAID projects.
Associated Resources for The company is involved in designing and conducting training
Management and programs for micro-enterprises, human resource planning and
Development, Inc. development, community organizing and mobilization, installation of
micro-finance systems, design and conduct of socio-economic
surveys.

47
 Franchise Management

Table 17. Franchise Management Consulting Firm

Company Name Description of Firm
GMB Franchise Developers The company assists clients to develop their franchise system and
and Consultancy Firm assist entrepreneurs who wanted to engage in franchising.

Business Recovery/Turnaround

Table 18. Management Consulting Firm involved in business recovery and

turnaround
Company Name Description of Firm
Business Recovery and The company specializes in restructuring, recovery, rehabilitation and
Turnaround, Inc. turnaround of companies and businesses in the Philippines and the
Asia-Pacific.

b. Consulting firms which are limited to offering services for

specific sectors/industry/market

These companies usually concentrate on specific

industries or sectors such as health services, pharmaceutical
industry, tourism industry, fisheries sector, construction industry,
sugar production, telecommunications or export companies. The
consultants in these firms usually have significant years of
exposure and experience in these sectors. They also have a
wide array of linkages with the different professional and industry
associations in these sectors. They play an important role in their
specific sector to provide sound advice and information needs.

Table 19. Management Consulting Firms which are limited to offering

services for specific sectors/industry/market
Company Name Description of Firm
Asia Pacific Projects, Inc. The company specializes in providing strategic planning, general
management, marketing, economic, and human resource development
advisory services for the tourism sector. It also prepares and conducts
training programs in hospitality and travel through its training arm, the
Asia Pacific Tourism Training Institute.

Meganomics Specialists, The company offers consulting and research services in the area of
International, Inc. agriculture (including fishery, natural resources and environment). It has a

48
 Company Name Description of Firm
distinctive competence in agribusiness, sustainable urban and rural
development, food security, financial, sociological, market, production,
processing, and post-harvest feasibility studies.
Isis Research Phils The company is part of Isis Research with global headquarters in London
16 offices worldwide. The company specializes in providing qualitative
and quantitative healthcare market research services. Services include
providing informed interpretation of research results and
recommendations to clients. Focus is on healthcare services and
pharmaceutical industry. Isis Philippines offers an omnibus study run
quarterly among general practitioners, internists and pediatricians.
Rider Hunt Liacor It offers a number of professional services aptly described as “Cost
Management through all stages of the construction process”. This
includes preparation of budget estimates, assistance in value
engineering, preparation of cash-flow projections, assist in the pre-
qualification of contractors and suppliers, preparation of bid documents,
issuance of bid bulletins, contract negotiations and finalizing the contract
agreement. The company focuses on serving customers in the
construction industry.
Code Red Consultancy The company is affiliated with the UK-based Code Red Consultancy. It’s
focus is mainly on providing consulting for the finance sector to help them
maximize their returns through effective use of technology in meeting
business goals.
Consultancy by Technicus The company works in close cooperation with Deutsche Telekom asia
Corporation Pacific regional headquarters in Singapore. It provides technical
resources and assistance in the area of telecommunications. Isla
Communications Co. is among its customers.
CADP Consultancy Service The company is affiliated with Cantral Azucarera de Don Pedro, a major
player in the sugar industry. CADP Consultancy Service provides training
and consultancy services in the area of sugar operations. Most of its
clients are from abroad who are provided with a share of the
internationally-recognized management capability, sugar engineering
technologies, and processes in sugar manufacturing with start-up sugar
operations.
Wright Business & The company specializes in assisting clients in procedures involving
Management Consultancy setting up business inside any of the Philippine economic zones. The
company provides pre-operations and pre-registration assistance to its
clients such as SEC and PEZA registration, preparation of project
feasibility studies, site selection etc.)

4. Sole practitioners or independent consultants and consulting

professors

There are numerous independent consultants and consulting

professors in the Philippines. Some of them practice consulting
on a full-time basis while many of the consulting professors
practice consulting on a part-time basis. These consultants
were able to get clients based on previous association with
these private companies or public institutions. They are usually
known for a specific expertise that they have. Clients are
usually obtained through personal contacts, referrals or through
their position or status in the institution where they work or
teach. There are already some consultants who advertise their
expertise and services they can offer through the internet.

5. Internal consultants

49
 In large client companies, they form their own corporate
planning units or departments to serve as internal consultants
in the company. In some cases, these units are even spinned-
off to become profit centers and become management
consulting companies themselves by expanding their market to
include not only their mother company but other clients as well.

6. Non-traditional suppliers of consulting services whose main

activities are other than management consulting (suppliers and
vendors of technical equipment, software, investment houses,
economic, statistical and research institutes, and learning
institutes)

Technology-based consulting

In recent years, technology based consulting firms have

emerged out of the need for new business solutions that would
adapt to needed technology. These companies usually arise
from software vendors and distributors which eventually
ventured into offering full-packaged services from information
systems planning to systems analysis to systems design to
systems implementation and monitoring. At present, the
services offered by these firms have eventually have become
more sophisticated and more comprehensive to include what is
presently known as Enterprise Resource Planning (ERP) and e-
business solutions. Whereas before, these firms have targeted
only specific units in the company such as the finance and
accounting department and the sales department or the
warehouse and purchasing departments for their
computerization needs, at present, a total company package is
offered to client companies. These involves a reevaluation of
business strategy and objectives to determine necessary
information technology solutions that could assist in achieving
these objectives in the various units of the company and a total
business process reengineering.

Table 20. Technology Consulting Firms

Company Name Description of Firms
WeServSystems One of the largest players in the software industry. It is the software
International subsidiary of Fujitsu Philippines and provides technology based
consulting and solutions related to systems development, implementation
and maintenance.
IEWorks The company started out as a training and consulting organization. At
present it is involved in delivering e-commerce and web site solutions,
enterprise data modeling or business process reengineering and staffing
services.
MisNet The company provides technology based consulting focusing on
Customer Relationship Management and E-business solutions to

50
 Company Name Description of Firms
integrate business processes and technology solutions.
Corporate Information A subsidiary of Meralco which was formed from the Accounting and EDP
Solutions departments of Meralco in the 1970s. The company provide technology
based consulting and solutions related to information systems planning,
business reengineering, and systems integration.
Headstrong A new company formed after the merger between digital business
management consultancy firm James Martin and investment firms Welsh,
Carson, Anderson, Stowe and Hambrecht & Quis Asia Pacific. It offers
technology based consulting and business solutions in the Asia Pacific.
Asian Computer Group The company is affiliated with Systems Standards Incorporated and
engaged in customized software solutions, project management,
programming services, IT consultancy, facilities management, networking,
systems integration and IT education/training.
CM Technologies, Inc The only member of IMPHIL concentrating on consulting in the area of
information technology. Services include computer programminf and
hardware.
Ayala Systems Technology A company which was formed as a joint venture of Ayala, BPI, Mitsubishi
Corporation, and ST (Singapore Technologies) Computer Systems and
Services, Ltd. Services include systems integration, systems
development, networking and communications.

Engineering Consulting Firms

Engineering consulting firms usually require project planning,

feasibility study preparation and advisory services in the area of
project management which is usually the expertise of
management consultants.

Table 21. Engineering Consulting Firms

Company Name
Cedco Incorporated
ProConsult, Incorporated
Schema Konsult, Inc.
SP Castro and Associates
Asian Technicon Managers
& Consultants, Inc.
SFI Management
Consultancy
Description of Firm
The company offers a complete range of services from project sourcing,
conceptualization in the areas of engineering, economics, environmental
management, technical management services, and policy sciences.
The company offers advisory and review services, planning services,
design services, project management, environmental impact assessment,
and traffic studies.
The company offers multidisciplinary services in the areas of engineering,
architecture, project and construction management and project
economics.
The company is a project management and consultancy organization. It is
the country’s first 100% Filipino-owned company certified in project
management and construction management.
The company offers services in the areas of project management,
construction management, quantity surveying, technical evaluation,
feasibility studies and master development planning.
The company is engaged in consulting services in the area of property
management, construction and engineering project management,
technical services and human resources management.

Business Intelligence Units

These companies usually provides venues for information

sharing through printing, publications or through the internet.
They also provide technical and trends analysis to assist
executives in planning and decision making.

51
Table 22. Business Intelligence Units
Company Name
Property Market Intelligence
(PMI) Asia, Inc.
Economist IntelligenceUnit
Philippines (EIU)
Description of Firms
The company is a provider of Asian property market research information
and technical analysis through internet. It is affiliated with PMI based in
Hongkong and serves primarily the Asian real estate industry.
The company is an associate of the London-based EIU which is engaged
in publishing, research and conference organization. The company
conducts quarterly roundtable meetings and peer-group meetings among
clients to update and assess prevailing economic, political, social and
business conditions as well as corporate operating experiences and
concerns. It also regularly provides information through its publications
such as The Philippine Alert, The Philippine weekly update, On-call
Information Service, and annual corporate surveys of MNC performance
and CEO salaries and benefits.

Market Research

The expertise of market research firms usually lie on their

capability to offer market research studies and information that
are based on a well-developed technology of data gathering,
analysis and interpretation. In the field of marketing, they provide
marketing consulting advisory services in the form of
recommendations on specific marketing strategies to be
implemented based on the results of the study.

Table 23. Market Research firms

Company Name Description of Firms
Trends-MBL The company is part of the MBL group worldwide providing strategic
planning, research, and consultancy in management and marketing.
Services include quantitative and qualitative market and product studies
including branded services such as IdeaMap®, and MarketMind Monitor
®
AC Nielsen (Pulse) The company is formerly known as Pulse Group which includes Media
Pulse, Consumer Pulse and Dealer Pulse. The company affiliated with
ACNielsen, one of the biggest global marketing research firms. It provides
retail measurement services, market modeling and analytical services,
customized researchs ervices, sales development services,
merchandising services, media intelligence services, computer industry
services, decision support services and ombnibus surveys.
PSRC-Research The company is one of the leading market research organizations in the
International Philippines. It provides full service market research services through
business and research consultancy. It includes customer and product
researches, service measurement, and branded solutions such as Equity
engine ®, Loyalty Driver ®, Trace®, and SMART® among others. It is
affiliated with the Research International group. It is formerly known as
Philippine Survey Research Center.
Taylor Nelson Sofres The company is formerly known as Frank Small and Associates. It is a full
(Frank Small & service marketing and business research firm. It is independently audited
Associates) each year by Ernst & young for compliance with QCSI (Quality Control
Standards for Interviewing), an ISO 9000 compliant award. It offers
omnibus surveys, advertising and consumer research and product testing.
It also has branded solutions like Optima®, NeedScope®, and Miriad®.
AGL Market Research The company was newly incorporated in 1999 to provide market research
services such as consumer and product researches, brand performance
studies, advertising research, sales and distribution research, industrial
research, feasibility studies, and corporate image research.

52
 Company Name Description of Firms
FS & Associates
Applied Marketing These companies offer market research services such as product and
Research, Inc consumer studies, brand performance studies , advertising and product
Asia Research Organization testing research.
Dynamic Research
Feedback Incorporated

Investment and Financing Companies

Table 24. Investment and Financing companies

Company Name Description of Firms
Walden AB Ayala The company is a joint venture between Ayala Corporation, and AB
Management Capital. Its main activity includes managing a US $ 19.7 million country
fund in the Philippines. Consulting activities include such areas as
assiatnce in the executive recruitment, corporate and business planning,
strategic alliances, fund raising and public listing of companies where
Walden has an investment portfolio in.

Learning Institutions/Academe and Non-Government

Organizations

There are non-profit institutions and organizations such as

academic institutions, professional schools and non-government
organizations that are also involved in research and
consultancy. In non-government organizations (NGOs) are
some NGOs whose objectives include provision of training and
consultancy to the sectors that they serve. They usually tap local
and international funding institutions to implement their projects.
There are a number of NGOs who either tap external consultants
to do some research and consultancy work for them or there are
some who develop their own capabilities for the said purpose.
Academic institutions on the other hand is slowly expanding their
function not only as learning institutions but as research
institutions as well. A study made by Edralin (2000) for the
Commission of Higher Education pinpointed that among higher
education institutions (HEI), there are 48 existing public and
private schools out of the 198 HEIs surveyed nationwide which
have research and development linkages with private sectors
and local and international funding institutions for various areas
of study . Twenty seven (27) are public HEIs and 21 are private
HEIs. The details of the nature of their research projects and

53
 donor institutions are shown in Appendix A. Some of the
research projects are academic in nature but there are also a
number which are applied researches and dwell on development
studies which are similar research studies prepared by
management consulting companies. For consultancy, there are
twelve (12) HEIs found to have formal consultancy linkages with
private and public institutions. The nature of these consultancy
linkages and the institutions they are usually affiliated with are
shown in Appendix B. Again, many of these consultancy linkages
are similar to services offered by some of the management
consulting companies.

Table 25. Learning and Academic Institutions and Non-Government

Organizations
Institution
Center for Leadership and
Change
Integrative Learning
International
Center for Empowerment &
Resource Development
Institute of Public Health
Management
SEAMEO regional Center
for Graduate Study and
Research in Agriculture
Peak Ground Institute of
Policy Research, Inc
State Universities such as:
UP Diliman,
UP Manila
UP Los Banos
Mariano Marcos State
University- Ilocos
Cagayan State University,
Mindanao State University
Description of Firms
The company is primarily responsible in delivering the Franklin Covey
Workshops and Programs for business students, professionals and
executives. The programs include Seven habits for highly effective
People, Time Management, Leadership, Creating Synergy, Building trust
etc. Some of these workshops are also made available through the
Ateneo Professional School.
The company provides the necessary tools and training needed by
clients through its “organizational development platforms of integrative
learning technology” . Workshops and seminars are conducted in Manila
and in other Asean neighboring countires.
The company is a non-profit organization engaged in development
consulting, research and work for small fisherfolk and women in the
Fiheries sector. Services include project management, monitoring,
evaluation, research, education/training, and institutional development.
The institute is a non-stock, non-profit organization that offers health
management training programs, promote practitioner-oriented research
through research and technical assiatnce, develop health policy
frameworks, assist in capacity building, project development and
evaluation. They cater to some projects of the government and funding
institutions.
The company is involved in agriculture consulting. Clients include both
local and government institutions. It is based in UP Los Banos.
It is an interdisciplinary institution specializing in business, economics and
public affairs. Services include business research and consulting, public
policy research and consulting, and advanced human development
programs such as the Advanced Management and Executive
Development Program and Corporate In-house Program. The company
is primarily based in Bacolod City.
State universities and colleges are really mandated to conduct researches
and extension work which usually come in the form of advisory, training
and consultancy work to assist in economic and social development of
the country.
A number of consulting professors as well as research institutes within
these learning institutions have been able to establish strong affiliation
with the private sector as well as local and international funding

54
 Institution
MSU-Iligan Institute of
Technology
Central Mindanao University
Silliman University
Private universities and
professional schools such as
De La Salle University
Ateneo de Manila University
Asian Institute of
Management
University of Asia and the
Pacific
University of Sto. Tomas
Mapua Institute of
Technology
University of the East
Notre Dame University-
Cotabato
St Louis College-Baguio
University of San Carlos
Description of Firms
organizations enabling them to delvier similar services as consulting
companies in the area of development work, agriculture, industrial
technology, engineering, economics and social sciences
The Commission on Higher education is pushing for further involvement
of academic institutions in research and consultancy. These institutions
are usually recognized to become Centers of Research in different
regions and more and more professors are engaged in research and
consultancy work as part of their total professional development.
Unlike public state universities who have budget allocation for research
through DOST, a number of private schools have to invest heavily on
organizing research centers as well as providing incentives for professors
to do research work. These research centers conduct their own
marketing efforts to bid for research and consulting projects to the
different funding institutions.

Internet-based service providers

There is also an emerging trend with the increase in the use

of the worldwide web to reach more customers. There are firms
based in other countries which are offering on-line services and
pose a threat to similar consulting and advisory services offered
by traditional consulting firms. An example of this is the
provision of on-line and interactive training workshops and tools.
These kind of services replace the traditional workshops
conducted by management training consultants.

Table 26. Internet-based service providers

Company Name Description of Firms
Career Systems The company is a Berverly Kaye company, an industry leader in the
International publishing of dynamic training materials distributed worldwide. The
company delviers interactive workshops to assist in the development of
the organization’s critical business needs and support retention and
development of key organizational skills and competencies.

An analysis of the classification of the different management

consulting firms would point out to an emerging trend towards
greater diversity in the types of services offered, nature and
scope of services offered, markets being served and a growth
in the number of types of non-traditional suppliers of consulting
services.

Number, Size and Location of establishments. There are

a total of 435 consulting firms in the Philippines as of 1994 based
on NSO’s census of establishments. This represents 4.89% of the
total number of establishments in the business services industry.
Small firms with less than ten employees dominate the industry.

55
 Large firms comprise 37% of the industry. Since NSO also uses
the PSIC definition, these figures include management holding
companies and would indicate that management consulting
companies would number not more than 435 as of 1994.

Since management holding companies are mostly large

firms the trend in the management consulting industry in the
Philippines would pinpoint that majority of the players in the
industry are small firms, with less than ten employees. But even if
the market is dominated by a number of small firms, a big bulk of
the revenues are shared by the bigger players in the industry.

It should be noted that these firms do not represent the

entire industry. There are still a number of individual consultants
from academic institutions and independent management
consultants.

Table 27. Number of establishments in the Philippines classified under

Business and Management Consulting Services by size of employment
Size of employment
Large establishments Small establish-
(10 or more ments (Less than Total
employees) 10 employees)
Based on 1994 Census of
Establishments 162 273 435
Based on 1996 Annual Survey
of Establishments 157* Not available -
Based on 1997 of
Establishments 171* Not available -
Source: National Statistics Office
* includes firms that offers market research and public opinion polling services

Based on NSO data from 1994 to 1997, the number of

business and management consulting establishments has been
decreasing based on the 1996 and 1997 NSO figures. The figures
even include establishments offering market research and public
opinion polling services. Please refer to Table 8.

On the other hand, based on the information gathered from

the Securities and Exchange Commission, there are a total of 2,558
firms which registered under the classification of business and
management consulting between January 1995 to November 2000.
Out of the 2,558 firms, there are 418 that provided telephone
numbers. Validation calls were made and resulted to having 318
numbers that are either residential/wrong or disconnected numbers,
6 firms which refused to give information, 51 firms which are still
existing (employment agencies, engineering consulting firms, IT
consulting firms, training firms and general management consulting
firms), 9 firms which have been dissolved, and 34 firms which have

56
been misclassified (these are law firms, retail firms, restaurants,
hotels etc.)

Majority of the management consulting firms’ main offices

are located in Metro Manila. However, there are also a number of
firms and offices in major cities and business centers like Cebu
City, Cagayan de Oro, Iloilo City, and Davao City.

Employment in Business and Management Consulting

Service firms. NSO figures point out that in the Philippines, the
business and management consulting sector generated a total of
9,376 regular employment in 1994. It was estimated that 12.16% of
the employees are managers/executives (senior
consultants/partners). A large firm has an average of 51
employees and small firms have an average of 4 employees. Not
reflected in these figures, are the independent consultants
contracted out by the management consulting firms. It was
estimated that there are around 25,060 external/independent
consultants contracted by business and management consulting
activities sector in 1994 based on labor statistics.

According to some consultants interviewed, the nature of the

business of being dependent on the projects available e.g. at
some point in time ,some firms do not have projects, pushed some
firms, especially the smaller ones, to maintain only a manageable
number of employees, mostly senior partners/consultants to
oversee the projects and some administrative support staff in the
office. Independent consultants are just contracted for specific
projects when their expertise is needed. The firms maintain a
database of independent consultants to tap. These independent
consultants may either be retired executives, professors and
researchers from the academe, or part-time consultants. In some
firms, the database includes both Filipino and foreign experts. The
firms usually tap those that the senior consultants/partners
personally know or those with whom the firms were able to work
with in their previous projects. The independent consultants are
selected based on their (1) track record; (2) reputation; (3)
expertise; and (4) consultancy fees demanded. The decision of the
management consulting firms to decide on the independent
consultant to be selected will be based on the nature of the project,
scope, expertise required, type of client, budget, and previous
experience with the consultant. Therefore, management consulting
firms who maintain and invest in building a database of
independent consultants to be tapped and establishing networks
and relationships with these consultants are also able to build their

57
 capability to accept projects, even those that require some
expertise that they do not have at present, in their firm.

Table 28. Nature of employment in establishments in the Philippines

classified under Business and Management Consulting Services by size ,
1994
Employment
Unpaid and
Working Managers/ Other Paid Total
Owners Executives employees Average
Small establishments (less than 10 Not
employees) 116 available 1,074 1,190
Large establishments (10 or more
employees) 100 1,140 6,946 8,186
Total 216 1,140 8,020 9,376
% to Overall Total Average 2.30 12.16 85.54 100.00
Source: 1994, National Statistics Office

The business and management consulting service

establishments expended a total compensation of PhP 1.3 billion
to its employees in 1994. More than a third of these (38.25%) were
allocated for managers/executives (senior consultants/partners)
and more than half are for other employees. This allocation is
presented in Table 11. Compensation for employees is 19.05% of
total revenue/sales of the sector.

Table 29. Compensation in establishments in the Philippines classified

under Business and Management Consulting Services by size, 1994 (values
in thousands of pesos)
Compensation
Employers’
Salaries/Wages contributio
Managers/ n to GSIS,
Executives Others SSS etc. Total
Small establishments (less than 10 Not
employees) available 61,017 2,301 63,317
Large establishments (10 or more
employees) 488,350 681,776 43,168 1,213,294
Total 488,350 742,793 45,469 1,276,611
% to Overall Total Average 38.25 58.18 3.56 100.00
Source: National Statistics Office

Financial performance of Business and Management

consulting service firms. About two thirds of the revenue/sales
of management consulting service firms were obtained from their
main activities. Only a third are from other sources such as rental or
property, equipment and other business services. Compensation
represents a bigger percentage of revenues of small
establishments (36.60%) as compared to large establishments
(28.05%). The total costs incurred by the establishments also
show that smaller establishments incur a bigger percentage of
costs relative to revenues (55.36%), which is more than half of the

58
 revenue/sales while large establishments’ costs represent 38.86%
of their revenues.

Table 30. Financial Indicators for establishments classified under Business

and Management Consulting Services, 1994 (values in thousands of pesos)
Large establishments Small
(10 or more establishments
employees) (less than 10 Total
employees)

Revenue Sales from

♦ Main Activity 4,325,252 172,989 4,498,241

% of total 66.99% 70.95% 67.14%

2,131,042 70,835 2,201,877

♦ Other Activities
33.01% 29.05% 32.86%
% of total
6,456,294 243,824 6,700,118
Total
o Compensation 1,213,294 63,317 1,276,611

% of total
revenue/ sales 18.79% 25.97% 19.05%

% of revenue
from main activity 28.05% 36.60% 28.38%

o Costs 2,508,611 134,983 2,643,594

% of total
revenue/ sales 38.86% 55.36% 39.46%

% of revenue 58.00% 78.03% 58.77

from main activity
o Fixed Assets 2,600,034 528,108 3,128,142

Capital-Output ratio 0.5611 4.567 0.6587

Source: National Statistics Office

The leading expense items of establishments in the business

and management consulting service sectors include (1) Non-
industrial services done by others; (2) interest expense; (3)
electricity and water; and (4) materials and supplies. There is a
similar trend for both large and small establishments in terms of
the top major costs incurred except for the item on interest
expense. Only large establishments incur significant costs for
interest expense. This may be attributed to the very nature of the
business and management consulting firms of having to allocate
resources for projects in advance, at times leading to a need to

59
 avail of loans. One of the difficulties of firms in the business is the
collection of accounts from clients especially if these are from the
public sector namely, government agencies and local government
units. The leading item – non-industrial services rendered by others
include building space rental, land rental and other services.

Table 31. Costs incurred by establishments classified under Business and

Management Consulting Services, 1994 (values in thousands of pesos)
Large establishments Small establishments
(10 or more (less than 10
employees) employees) Total
Type of Costs % (over % (over % (over
Costs total Costs total Costs total
costs) costs) costs)
Materials and
Supplies 209,421 8.35 25,693 19.03 235,114 8.89
Non-Industrial
services done by
others 824,197 68,753
32.85 50.93 892,950 33.78
Industrial
services done by
others 94,369 870
3.76 0.64 95,239 3.60
Fuels, lubricants,
grease etc. 34,326 1.37 7,127 5.28 41,453 1.57
Electricity and
water 342,181 13.64 7,507 5.56 349,688 13.23
Interest expense 600,029 23.92 6,568 4.87 606,597 22.95
Indirect taxes 63,624 2.54 5,901 4.37 69,525 2.63
Cost of goods
for resale 170,503 6.80 12,129 8.99 182,632 6.91
Research and 58,122 2.32 - - 58,122 2.20
Experimental
Development
Others 111,841 4.46 434 0.32 112,275 4.25
TOTAL 2,508,613 100.00 134,982 100.00 2,643,59 100.00
5
Source: National Statistics Office

After validation of the major activities of the leading business

and management consulting firms based on the Top 12000
corporations from 1996 to 1998 and Top 5000 in 1999, it came out
that there are 34 firms whose main activity is management
consulting. Please refer to Table 16. Financial performance of a
sample of leading non-traditional providers of management
consulting services is also presented.

It can be noted that many of the leading players industry

have foreign affiliations. There are also very few who are able to

60
 consistently make it to the Top 5000. The profile of the firms if it
will be referred back to Table 30 based on services offered is
diverse. Except for Accenture and Iberpacific, many of the leading
players have specialized niche market or differentiated services.

Among non-traditional providers, technology consulting firms

significantly grew in the past four years.

It is to be noted that the financial performance of single

proprietorship and partnership companies as well as research and
consulting centers in academic institutions is not included in the
analysis due to lack of information available.

Table 32. Financial Performance of leading Business and Management

Consulting Service Firms in the Philippines based on SEC listing of Top
12000 Corporations (values in thousands of pesos),1996-1999
Rank Gross Revenues Growth Gross Growth Gross Growt Ave
Company Rate Revenues Rate Revenues h Growt
Rate h
Rate
1996 1997 1998 1999 1996 1997 1996-97 1998 1997-98 1999 1998- 1996-
99 99
Firms whose main activity is management consulting
Andersen 683 500 328 342 808,079 959,568 18.75 1,471,686 53.37 1,414,211 -3.91 22.74
Consulting/
Accenture
Iberpacific 6807 3807 3171 2684 25,066 75,441 200.97 98,377 30.40 121,602 23.61 84.99
Consultancy by - 5811 1921 2694 NA 40,490 - 193,523 377.95 120,734 -37.61 170.17
Technicus Corp
IMS Philippines - 5496 3631 2991 NA 44442 - 82,505 85.65 103,652 25.63 55.64
Watson Wyatt 5192 5205 3984 3065 NA 48,059 - 72,691 51.25 100,236 37.89 44.57
Phils
John Clements 3961 4062 4392 3907 58,434 69,090 18.24 63,484 -8.11 72,695 14.51 8.21
Consultants
Orient Integrated 5080 5009 5303 - 40,014 50,940 27.31 48,143 -5.49 NA - 10.91
Devt Consultants
Motivation Asia 5415 10846 5856 - 36,625 13,866 -62.14 39,203 182.73 NA - 60.29
Phils
Urban Integrated 7825 8272 6900 - 19,713 22,925 16.29 28,393 23.85 NA - 20.07
Consultants
Lazaro, Bernardo, - - 7258 - NA 0 - 25,284 - NA - -
Tui and
Associates
Guthrie Jensen 7144 7123 7259 - 23,222 29,567 27.32 25,284 -14.49 NA - 6.42
Consultants
Cest Inc 8219 8254 7398 - 18,114 22,995 26.95 24,415 6.18 NA - 16.56
EDS Intl Phils - 8452 7539 - NA 22,097 - 23,468 6.20 NA - 6.20
Neville Clarke 8662 8722 7735 - 16,452 20,922 27.17 22,305 6.61 NA - 16.89
Phils
GCV Mgmt and - - 7882 - NA 2,565 - 21,508 738.52 NA - 738.52
Consulting
Hambrecht and - 7686 8113 - NA 26,036 - 20,290 -22.07 NA - -22.07
Quis Phils
Madecor Career 8637 9890 8905 - 16,565 16,514 -0.31 16,513 -0.01 NA - -0.16
Systems
Economic - - 9249 - NA 14,506 - 15,254 5.16 NA - 5.16
Development
Foundation
KPMG Consulting - - 10066 - NA 4,609 - 12,703 175.61 NA - 175.61
IDP Consult Inc - - 10082 - NA - - 12,652 - NA - -
Enterprise Devt - 10328 10417 - 11,615 15,203 30.89 11,787 -22.47 NA - 4.21
Group Asia

61
 Rank Gross Revenues Growth Gross Growth Gross Growt Ave
Company Rate Revenues Rate Revenues h Growt
Rate h
Rate
1996 1997 1998 1999 1996 1997 1996-97 1998 1997-98 1999 1998- 1996-
99 99
Pac/Ancilla
ENR Consultants - - 10457 - NA 6,123 - 11,671 90.61 NA - 90.61
Manila Execon 9670 9905 10703 - 13,463 16,474 22.37 11,054 -32.90 NA - -5.27
Group
Capital Strategies - - 11639 - NA 5,400 - 9,260 71.48 NA - 71.48
Phils
Pricewaterhouse - - 11902 - NA - - 8,861 - NA - -
coopers
Louis Berger Intl 7328 5431 - - 22,216 45,257 103.71 NA - NA - 103.71
Inc
ProSearch 8304 7018 - - 17,828 30,173 69.25 27,074 -10.27 NA - 29.49
Pinkerton 7517 7021 - - 21,140 30,159 42.66 NA - NA - 42.66
Consulting
Services
SGV- 8103 7945 - - 18,581 24,552 32.13 NA - NA - 32.13
Development
Dimensions
Control Risks 9404 8979 - - 14,174 19,906 40.44 NA - NA - 40.44
Phils
Escaler & Co inc - 10134 - - 7,666 15,753 105.49 NA - NA - 105.49
Madecor Env 9384 10753 - - 14,239 14,080 -1.12 NA - NA - -1.12
Mgmt
Corporate - 11007 - - NA 13,505 - NA - NA - -
Discretionary
Services
Isis Research Ltd - 11953 - - 7,129 11,465 60.82 NA - NA - 60.82
DL Lazaro Inc - 9956 - - 4,701 16,323 247.22 NA - NA - 247.22
Subtotal 1,215,036 1,749,005 43.95 2,397,388 37.07 1,933,130 -19.37 20.55

Non-traditional providers of management consulting services whose main activity is other than management consulting
Market Research
AC Nielsen 2557 2429 2031 1837 111,185 140,023 25.94 182,493 30.33 210,560 15.38 23.88
Dealer Msmst
Svcs (Dealer
Pulse)
AC Nielsen 3268 3049 2972 2859 78,819 102,570 30.13 109,106 6.37 110,016 0.83 12.45
Consumer Res
Svcs (Consumer
Pulse)
AC Nielsen - - 2930 2624 NA 75,593 - 110,706 46.45 125,295 13.18 29.81
Unisearch Res
Svcs
AC Nielsen Media 6826 7215 6053 - 24,958 28,812 15.44 36,870 27.97 NA - 29.43
Measurment Svcs
(Media Pulse)
FS & Associates - 4709 - - 27,338 55,602 103.39 NA - NA - 103.39
Phils
Taylor Nelson - - - 3655 NA NA - NA - 78,955 - -
Sofres Phils
(Frank Small and
Associates)
ResearchPhils- 3923 3801 - - 59,418 75,593 27.22 NA - NA - 27.22
Unisearch Inc
Trends-MBL 2672 2712 2623 2467 104,386 121,224 16.13 131,115 8.16 137,606 4.95 9.75
PSRC-Research - - 3767 4202 NA 59,787 - 78,589 31.45 66,039 -15.97 7.74
International
Asia Research 6958 9456 - - 24,249 18,031 -25.64 NA - NA - -25.64
Organization
Market Research - - 10727 - NA 0 - 10,997 - NA - -
International Phils
Subtotal 430,353 677,235 57.37 659,876 -2.56 728,471 10.40 21.73

Technology Consulting

62
 Rank Gross Revenues Growth Gross Growth
Gross Growt Ave
Company Rate Revenues Rate
Revenues h Growt
Rate h
Rate
1996 1997 1998 1999 1996 1997 1996-97 1998 1997-98 1999 1998- 1996-
99 99
Asian Computer 10878 11451 9760 - 10,594 12,501 18.00 13,636 9.08 NA - 22.54
Group
Ayala Systems 1789 2088 1038 1143 180,911 174,049 -3.79 443,061 154.56 378,630 -14.54 45.41
Technology, inc
Code Red 5611 6187 - - 34,643 36,945 6.64 NA - NA - 6.64
Consultancy
Corporate 2686 2063 1302 1176 103,709 177,364 71.02 337,544 90.31 366,222 8.50 56.61
Information
Solutions
IEWorks Inc 10097 11952 9891 - 12,356 11,466 -7.20 13,182 14.97 NA - 0.28
Intercommerce - - 7636 - NA 13,478 - 22,875 69.72 NA - 69.72
Network Services
James Martin & - - 2498 1618 NA 101,473 - 140,469 38.43 245,086 74.48 56.45
Co. Phils
(Headstrong)
Key Consultants - - 10528 - NA 8,432 - 11,447 35.76 NA - 35.76
Misnet 5820 3374 1720 1390 32,607 89,183 173.51 226,173 153.61 298,890 32.15 119.76
Sykes Asia - - 4680 1573 NA - - 57,546 - 253,052 339.74 339.74
WeServSystems - 1425 1499 1074 NA 287,653 - 269,586 -6.28 407,275 51.07 22.40
International
Subtotal 374,820 912,544 143.46 1,535,519 68.27 1,949,155 26.94 79.56

Construction/Engineering Consulting

Asian Technicon 8118 7241 7681 - 18,504 28,571 54.40 22,618 -20.84 NA - 43.99
Mgrs & Cons
Cedco - 7955 - - 5,280 24,503 364.07 NA - NA - 364.07
Constech Mgmt 10988 10913 - - 10,398 13,745 32.19 NA - NA - 32.19
Group
ProConsult Inc 8013 7225 7565 - 18,967 28,713 51.38 23,316 -18.80 NA - 41.99
SP Castro and - - 10613 - NA 687 - 3,574 420.23 NA - 420.23
Associates
Rider Hunt Liacor - 9561 - - 15,914 17,640 10.85 NA - NA - 10.85
Schema Konsult 6867 3095 3796 - 75,239 100,516 33.60 77,772 -22.63 NA - 22.28
Inc
Planning 6067 4341 6316 - 30,546 62,587 104.89 34,007 -45.66 NA - 82.06
Resources and
Operations
Systems
RN Ferrer & 5693 6170 4761 - 33,843 37,130 9.71 55,854 50.43 NA - 34.93
Associates
Pacific Orient - 10098 11078 - 6,793 15,877 133.73 10,241 -35.50 NA - 115.98
Consultants &
Mgmt
Subtotal 215,484 329,969 53.13 227,382 -31.09 NA - 37.58

Business Intelligence Units

PMI Asia - - 11093 - - - 10,213 - -

Investment/Financing Companies

Walden AB Ayala - - 8887 - - 14,981 16,579 - 10.67

Management

Learning Institutions/Non-Government Organization

Center for - - 10320 - - 10,406 - 12,054 15.84 - 15.84
Empowerment
and Resources
Center for - 7584 7931 - - 26,556 - 21,249 -19.98 - -19.98
Leadership and

63
 Rank Gross Revenues Growth Gross Growth Gross Growt Ave
Company Rate Revenues Rate Revenues h Growt
Rate h
Rate
1996 1997 1998 1999 1996 1997 1996-97 1998 1997-98 1999 1998- 1996-
99 99
Change
Subtotal 36,962 33,303 -9.90 -9.90

Source: Philippines Top 7000 and Next 5000 Corporations, SEC, 1997-2000 editions
Note: 1999 includes only the Top 5000 since the Next 5000 is not yet available

Substitute Services

The increase in use of information technology among clients,

give rise to the growth of the information technology consultancy.
The growth of this subsector presents both opportunities and
threats for management consulting firms. Some firms are able to
integrate and expand their services to include information
technology. This was easy for those with affiliations with global
management consulting companies which are also moving towards
this direction. As seen in the Top 12000 corporations, there are
more companies which have services related to information
technology that are among the leading companies as compared to
those in financial , human resource, marketing or development
studies. However, for some companies who are not able to
integrate IT into their services would mean a cut in the market
share of the pie when new IT services substitute management
consulting services. This is specifically applicable if the consulting
company is targeting the private business sector, particularly
medium and large corporations. An example of this is the possible
growth of the e-business consulting industry. E-business, according
to IBM is defined as “enhancing business processes using internet
technologies. It encompasses not only e-commerce – the selling of
goods and services over the internet – but all the business
processes that can be enhanced, streamlined, and (where
companies) can put in more value”. Internet technologies include
not only the internet but also transactions over electronic data
interchange (EDI). And a discussion of business processes and
enhancing them is among the services provided by the
management consulting services sector.

New Entrants

The barriers to entry in the management consulting

subsector is low because of low capitalization required. Ownership
of land and equipment is not a prerequisite in the business. Being a
knowledge-based industry, what matters in the entry into the

64
 industry is the presence of consultants who are specialized in their
fields and have made significant investments in education and
experience. However, some players in the industry perceive that
this low entry barrier may also lead to a perceived poor public
image of consultants and consulting companies compared with
that of other professional service industries since anyone can be a
consultant.

The entry and strengthening of position of the Big Five and

other global management consulting companies in the country and
the Asia-pacific region through local firms, pose a stiff competition
in the management consulting services sector. Especially, in the
Philippines where there is colonial mentality. Many clients would
prefer to deal with foreign and known management consultants
even if similar quality of services can be delivered. This reduces
the competitive advantage of existing local firms which have no
foreign affiliation, plus the fact that these foreign firms bring with
them greater speed to provide services needed with e-business
capability and seasoned battery of young, energetic and
enthusiastic consultants. On top of this, these consultants have
industry-specific-knowledge-base which makes it highly
differentiated, attuned to new territory, new language, new social
culture, new currency and new laws. They have had the experience
of global expansion in other countries and regions as well. But
according to one of the major players in the industry, the
competitive advantage of Filipino consulting firms and Filipino
consultants lie on the pricing of consultants’ fee.

In addition to the mentioned scenario of more global

management consulting firms entering the market , the direction of
the higher education institutions to improve growth of research
centers and extension centers in various colleges and universities
results to possible entry of more individual consultants and
consulting institutions. The consulting institutions may come in the
form of research and extension units that pose a possible threat
to management consulting firms especially in the pursuit of grants
from international funding institutions and the government as well
as a part of the private sector.

2. Forward linkage/Market

Opportunities for management consulting services arise

from three major sources. These are (1) international funding
institutions consisting of multilateral institutions like Asian
Development Bank (ADB), World Bank (WB), United Nations
Development Project (UNDP) as well as bilateral institutions like

65
 CIDA, JBIC, AusAID, and USAID; (2) Government agencies in
the Philippines; and (3) Private firms both local and foreign.

International funding institutions include governments of

industrialized countries that provide developmental assistance in
the form of soft loans/grants to developing countries. Consulting
services are usually multi-disciplinary in nature. Management
consulting firms are able to get grants through submission of
proposals and/or bids to these funding institutions. Table 31
presents the list of funding institutions and loans/grants provided to
the Philippines based on the ODA pipeline of NEDA. A detailed
profile of the nature of projects related to the development
assistance is shown in Appendix C. It can be observed that many
of the areas where management consultants are needed are
related to environmental management, sustainable development
and institutional development in local government units,
government agency and communities. There are a few projects
related to entrepreneurship and industry development while there
are also some that are related to policy development.

Table 33. International funding institutions providing loans and grants to

the Philippines, 1997-2000
1997 1998 1999 2000
Funding Amount # of Amount # of Amount # of Amount # of
Institution projects project project project
s s s
Asian 172.91 12 395.7 10 125 2 192.92 9
Development
Bank
Australia Aid 23 1 66.04 1 NA 3
Austria 17.4 1 120 1 164.85 4
Belgium 26.96 2 10.04 1 10.04 1
British 76.16 1 76.16 1
Czechoslovakia 210 2 10 1
CIDA (Canada) 16.08 3 56.9 6
European 16.05 2 14.15 1 23.3 1
Community
Finland 1.46 2
France 21.96 5 10.85 1 10.85 1
FRG-GTZ 18.57 12 9.62 5 7.84 1
(France)
FRG-KFW 38.36 4 12.01 2 35.7 2 154.01 4
(France)
Italy 109 1 123 1
Japan-JBIC 706.77 10

66
 1997 1998 1999 2000
Funding Amount # of Amount # of Amount # of Amount # of
Institution projects project project project
s s s
Japan-JBIC- 85 1
SYLP
Japan- OECF 1051.1 13 1054.2 13 1318.7 13
7 7
Japan-SAPROF 47.92 2
JICA (Japan) 37.5 5 51.74 5 15.88 6 16.36 2
Korea-EDCF 26.04 1 26.04 1 NA 1
KOICA (Korea) 0.96 1 0.96 1
Kuwait 33.2 1 33.2 1
New Zealand NA 4
OPEC 10 1 10 1
Spain 111.57 7 5.65 8 142.34 4 162.96 5
Switzerland 5.4 1 5.04 1
UN System - 12.94 18 18.3 16 0.52 4 1.38 4
UNDP
UN System - 1.55 3 0.37 2 1.17 5 0.37 2
UNDP (GEF)
USAID 19.3 1
World Bank 357 6 90 2 197 3 94 2

TOTAL
2,080.2 102 1,862.0 71 2,460.4 58 1,726.8 53
2 3 0 1
Source: NEDA, ODA Pipeline, 1997-2000

There are also 128 locally-based donor and funding

institutions in the Philippines (which also includes some of those
listed in Table 33 like World Bank and ADB). These funding
institutions also have a need for management consultants
especially in certain research-based and technical assistance
projects. The nature of these 128 funding institutions is shown in
Table 34. Those funding institutions which may not require
consultancy assistance since they are either scholarship institutions
or libraries or donors of school/hospital buildings are not anymore
included in the table.

Table 34. Areas for funding of 128 local and international funding
Institutions
Areas for funding Frequency Percentage
Sustainable Development and environment 63 49.22
Micro-Credit/Micro-Finance 53 41.41

67
 Areas for funding Frequency Percentage
Health and Nutrition 60 46.88
Livelihood and Enterprise Development 51 39.84
Gender Development/Women Development 50 39.06
Agriculture, Agrarian Reform and Rural 50 39.06
Development
Cooperative Development 43 33.59
Educational Training and Resource Development 36 28.13
Science and Technology 26 20.31
Local Governance, Institutional and Policy 22 17.19
Development
Student and Volunteer Formation 14 10.94
Arts and Culture Heritage 13 10.16
Urban Development and Housing 13 10.16
Peace and Human Rights 12 9.38
Disaster Response 12 9.38
Indigeneous People’s Development 11 8.59
Population and Development 8 6.25
Community and Social Development 8 6.25
Children/Youth Development 6 4.69
Philanthrophy and NGO Development 5 3.91
Early Childhood Education training 3 2.34
Education Infrastructure, Energy and Transport 3 2.34
Communication
Prevention of Child Abuse 3 2.34
Fair trade advocacy 3 2.34
Mass Media, Visual Arts and Performing Arts 2 1.56
Economic Policy reform 2 1.56
Private Sector Development 1 0.78
Labor and Employment 1 0.78
International relations 1 0.78
Energy 1 0.78
Industry and Non-fuel minerals 1 0.78
Social Infrastructure 1 0.78
Source: Association of Foundations Phils., Inc., “Donor Trends: A Resource Book of Development Assistance in the
Philippines”
Note: Frequency may not add up to total since a number of funding institutions have more than one area for funding

Government sector consists of various departments and

agencies of the National Government that need consulting
assistance. The guidelines are mandated by the Policies and
Guidelines issued by the National Economic and Development
Authority (NEDA). Government agencies hire consultants or
acquire the services of consulting firms either in line with the
implementation of projects granted them or implementation of
projects that are included in the national budget. Appendix C gives
a detailed profile of government agencies implementing ODA

68
 pipeline projects. Leading government agencies with development
assistance include DPWH, DENR and DOH. Based on the profile
of the clients listed by some of the management consulting firms, it
was also observed that government agencies have been hiring
consultants or consulting firms to assist them in the areas of
training and computerization

Private agencies consists of private firms and non-

government organizations in need of specialized expertise related
to internal restructuring, search for growth opportunities, staff and
training development, and strategy formulation, among others.
Based on the listing of management consulting firms, companies
that usually hire consultants or consulting firms are large, many are
multinational corporations and in growth industries of
Telecommunications, Electronics manufacturing and
Semiconductor assembly, Retail industry, Consumer products
manufacturing and marketing, Banking, and Insurance.

Table 35 shows that in 1994, 40 industries share 90% of

the total output of business and management consulting and
market research services. The primary markets which comprise
50% of the total output include Construction, Wholesale and Retail
Trade, Banking, and Investment, Financing, and other non-banking
services excluding pawnshops.

The other leading markets include the government (public

administration and defense) which comprise 5.86% of the output,
private education enterprises (2.12), other social and community
related services (1.77), and public education services (1.76).

The business, management consultancy and market

research services account for 1.64% of the output. These includes
projects where firms where able to render subcontracted services
to other firms within the sector.

An analysis of the market linkage indicates a wide array of

businesses where business management, consultancy and market
research activities was able to render services to. Businesses
range from manufacturing to services sector.

Table 35. Market Linkage of Business and Management Consulting and

Market Research Services in the Philippines
Market Linkage Value (P’000) % Share
Construction 2,998,372 27.10
Wholesale & retail trade 1,411,508 12.76
Banking 852,794 7.71
Investment, financing & other non-banking services exc. pawnshops 794,424 7.18

69
 Market Linkage Value (P’000) % Share
Public administration and defense 648,455 5.86
Private education services 234,460 2.12
Other social and related community services 195,660 1.77
Public education services 194,300 1.76
Business mgt & consultancy and market research services 181,240 1.64
Mfr of parts and supplies for radio, TV & communication (semi- 162,759 1.47
conductors)
Agricultural services 148,771 1.34
Real estate development 144,442 1.31
Engineering,architectural & technical services 138,496 1.25
Mfr of radio and TV receiving sets, sound recording & reproducing 126,761 1.15
eq. incl records and tapes
Mfr of communication and detection equipment 125,012 1.13
Gold and silver mining 120,245 1.09
Copper mining 113,696 1.03
Petroleum refineries 109,285 0.99
Life insurance 108,031 0.98
Mfr of plastic furniture,plastic footwear & other fabricated plastic 103,010 0.93
products
Banana 99,113 0.90
Bookkeeping, acctg., and auditing services 86,993 0.79
Softdrinks & carbonated water 86,085 0.78
Textile, spinning, weaving, texturizing and finishing 75,326 0.68
Mfr of appliances and housewares 74,204 0.67
Non-life and other insurance activities 66,392 0.60
Mfr, assembly of motorcycles & bicycles 65,090 0.59
Telegraph service 56,133 0.51
Telephone 53,487 0.48
Custom tailoring & dressmaking shops 50,168 0.45
Mfr of drugs and medicines 47,284 0.43
Interisland shipping including inland water 46,598 0.42
Mfr and repair of wooden furniture incl upholstery 44,914 0.41
Shipyards and boatyards 44,243 0.40
Mfr of primary cells and batteries and electric accumulators 42,225 0.38
Mfr of perfumes, cosmetics & other toilet preparations 40,527 0.37
Letting, operating real estate, residential or non-residential,other real 39,878 0.36
estate activities
Sugar milling and refining 38,489 0.35
Others 1,095,002 9.90
TOTAL 11,063,872 100.00
Source: 1994 Input-Output Table, National Statistics Office

The selection of consultants by the different institutions

may vary. Some would require a bidding process to be conducted,
others may require proposals to be submitted, and some may ask
for presentations to be made, while some would have personal
preferences to guide them in their decision. But whatever is the
selection process, criteria for the selection is almost the same.
Clients look for (1) track record; (2) capability/ expertise; (3)

70
reputation; (4) price; and (5) relationship/s established with the
client.

Track record is based on the nature and scope of projects

conducted, type of institutions dealt with and years of experience
of the consultants and the consulting firms. Firms are often trapped
in a vicious cycle: “without experience, they cannot qualify for
assignments; and without assignments, they cannot gain
experience” (Baum and Kirmani, 1991). This is the dilemma of most
small and medium-sized consulting companies in the Philippines.
Capability/expertise is based on the fields of specialization and
areas of discipline that the company and consultants are known
for. Reputation refers to the respect and image that the company
and consultants possess in the industry. Pricing is a factor that
may be influenced by the reputation of the consultants and/or the
consulting firm. There are no set fees for consultancy services.
Since the services are mostly based on the clients; needs, they are
priced on a case to case basis, and are most often negotiable.
Some of the major factors considered in pricing are (1) scope and
nature of project; (2) consultants’ fees; (3) client (developing long
term relationship, prospects for future opportunities, size of
company; familiarity with the company culture; payment practices).

In the Philippines, aside from track record, reputation,

expertise, and price, relationships play an important role in the
business. This was confirmed in all the interviews made with
different consultants from various companies. Many of the firms,
especially the small and medium-sized management consulting
firms rely on personal networks to get accounts and clients. Client
companies are said to be more confident in getting consultants that
they personally know or those that their managers know very well.
Relationship marketing is used to develop long-term relationships
with clients. Even the costing of fees is based on existing
relationship or potential relationship with client companies. Since
relationships, play an important role in the business, changes in
management or leadership in major client companies of a business
and management consulting firm may also affect the potential of
getting more projects/accounts from the client company in the
future. But for large management consulting firms, since they have
been able to establish a name and reputation for the company,
relationships still matter but the ability to gain clients is dealt with
more ease using other marketing strategies.

Philippine management consulting firms are mostly catering

to a number of institutions across different industry sectors. But
there are also some management consulting firms that specialize in

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 particular sectors such as agriculture or tourism or the public
sector. The client firms and institutions are also usually medium
and large in size. Small firms rarely hire consultants since hiring
consultants is seen as an expensive venture. There are a number
of management consulting firms who also have preferences on
customers they are most likely to deal with depending on their
image and reputation as well as capability. Those firms with
impressive track records and capability prefer to deal with funding
institutions for large projects. Limits are usually set on the amount
of project they will most likely bid for. As for private institutions,
preference is for large institutions and multinational corporations.
There are also a number of companies interviewed who try to avoid
getting projects from the government because of problems and
delays in the release of payment . Smaller management consulting
firms are not very selective of their clients and the projects they
handle. Their objective is to build a track record and reputation for
bigger projects in the future.

Going back to the premise that consulting is an idea-driven

profession, the consultants remain as unique as the clients they
serve, and they underscore the myriad of conflicting personalities,
management styles, and conflicting visions. With this, consulting
business is continuously viewed as completely differentiated
catering to clients with unique requirements, putting them on a
position of greater influence over their clients.

3. Backward Linkage/Suppliers

Based on Table 36, bulk of the resources provided to the

business and management consulting and market research
services in the Philippines are those that belong to the service
industry. This coincides with the NSO figures where it was shown
that bulk of the costs incurred by firms in the business and
management consulting sector are those related to non-industrial
services such as land and building rental.

Table 36. Supply Linkage of Business and Management Consulting and

Market Research Services in the Philippines
Supply Linkage Value (P’000) % Share
Radio and TV programming 1,562,075 46.55
Restaurants, cafes & other eating and drinking 188,727 5.62
places
Business mgt & consultancy and market research 181,240 5.40
services
Letting, operating real estate, residential or non- 148,868 4.44
residential,other real estate activities

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 Supply Linkage Value (P’000) % Share
Telephone 89,557 2.67
Busline operators 89,197 2.66
Mfr of stationers', artists' and office supplies 87,730 2.61
Electricity 75,847 2.26
Mfr of articles of paper and paperboard 71,873 2.14
Road freight transport & supporting services to 70,298 2.10
land transport
Other lodging places 69,999 2.09
Other business services, n.e.c. 68,673 2.05
Air transport 58,226 1.74
Hotels and motels 52,263 1.56
Non-life and other insurance activities 51,663 1.54
Commercial & job printing & other allied industries 50,046 1.49
Detective & protective services 45,579 1.36
Jeepney and autocalesa operation, trycycle and 44,598 1.33
other road transport operation
Public utility cars and taxicab operation 44,598 1.33
Machinery and equipment renting and leasing 38,653 1.15
Wholesale & retail trade 36,241 1.08
Petroleum refineries 25,355 0.76
Mfr of misc chemical products 24,348 0.73
Postal,Messengerial and other comm services, 21,516 0.64
n.e.c.
Legal services 20,037 0.60
Employment/recruitment agencies 17,074 0.51
Advertising services 16,804 0.50
Construction 16,343 0.49
Mfr of other fabricated wire & cable prods exc 15,043 0.45
insulated wire & cable
Water 12,869 0.38
Repair shops for motor vehicles 12,200 0.36
Investment, financing & other non-banking 11,733 0.35
services exc. pawnshops
Bookkeeping, acctg., and auditing services 9,451 0.28
Other repair shops, n.e.c. 6,146 0.18
Mfr, assembly & repair of office, computing and 5,152 0.15
acctg machines
Mfr of asphalt, lubricants and misc prods of 5,000 0.15
petroleum and coal
Newspapers and periodicals 4,861 0.14
Banking 3,130 0.09
Telegraph service 2,060 0.06
Other social and related community services 256 0.01
Storage & warehousing 28 0.00

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 Supply Linkage Value (P’000) % Share
TOTAL 3,355,357 100.00
Source: 1994 Input-Output Table, National Statistics Office

Almost 50% of the resources in the industry is supplied by

radio and TV programming. This may be attributed to the fact that
in the 1994 data, the market research services sector is included
which requires inputs through radio and TV programming. Those
that also offer public relations services is also included in the
sector and this is another sector that requires inputs from radio and
TV programming.

Aside from the inputs specified in Table 36, knowledge-

based resources, technology-based resources, and human
resources are three other important resources of management
consulting firms that need to be supplied in the industry.

On knowledge-based resources, many consultants

interviewed mentioned that the industry is suffering in terms of
weak database coming from the government. Uniformity of
information from different sources is most wanting in the industry.
Globally, the change is towards greater speed in obtaining
information. An important input that was not reflected in Table 34 is
the database information coming from the government. The
accuracy, timeliness and reliability of the market and feasibility
studies are dependent upon the availability of timely and reliable
data. However, at present, there is lack of current official statistics
to base decisions from. There is usually a lag in the compilation of
data. Moreover, often information gathered from different sources
on the same variable does not coincide. Knowledge, technology
and human resource are also obtained through academic
institutions. Professional schools play an important role as
institutions that train most of the consultants. Many of the
independent and part-time consultants are also based in academic
institutions like the Asian Institute of Management, De La Salle,
Ateneo de Manila, University of the Philippines, and University of
Asia and the Pacific. But unlike large management consulting firms
in other countries like the US and Europe where intensive
recruitment is done among different professional schools of
business, among MBA graduates, it is not a popular practice in the
Philippines. Consultants are mostly hired based on experience
and specialization not just the educational degree they have. But
junior consultants who are hired in consulting firms are also usually
required to have their MBA degree. This does not mean, however
that the consulting profession in the Philippines is limited to those
with management background or those with MBA or MS degrees.
MBA programs in professional schools are becoming more diverse,

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 and consulting firms are now recruiting people from other fields
such as law, engineering, and information technology, Technology-
based resources such as internet and business softwares are also
becoming important inputs to keep consulting companies abreast
with the latest trends and information.

4. Laws, Policies and Commitments under GATS

There are minimal legal barriers in the field of management

consulting services sector. In the Philippines, the following are
some of the legislations and administrative policies affecting the
access of foreign markets in the country as well as an overview
into the different commitments of different countries under GATS
that affects access of the country to different foreign markets.

4.1 Philippine laws and ADB policies

• Republic Act No. 8181 or the ODA Act of 1997 . Its

implementing rules and regulations, govern projects funded through
the ODA. The law states that foreign consultants participating in
ODA-funded projects should associate with local consultants and/or
hire Filipinos in carrying out the projects. Consultants engaged in
the feasibility study and design aspects of a project may not
participate directly or indirectly in any subsequent phase of project
implementation. The latter is a controversial provision and there
are moves to amend the law.

• The Guidelines on the Procurement of Consulting Services for

Government Projects (Implementing Rules and Regulations of
Executive Order No. 164). Government may only conduct direct
selection/negotiation in times of emergencies or when time is of the
essence, e.g., natural calamities; failure to award the contract after
open competitive selection process for valid cause or causes; and
take-over of rescinded or terminated consultancy contracts. These
guidelines contain the selection process, consultancy costs,
agreement provisions and implementation procedures. ODA-
funded projects use an open and competitive procurement process.

• Government Information Systems Plan (Executive Order No.

265). This covers the framework for computerization efforts of the
government. The plan would initiate changes in data management,
access to information and communication within the government
and to the public. The said changes will greatly affect the flow of
information and access to information in the management
consulting industry. As a knowledge and information-based
industry, the industry would benefit in this plan as there is more
access to information and markets, both foreign and local. The

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 proposed and ongoing projects under the Government Information
Systems Plan as shown in Appendix D would contribute much in
the areas of delivery of services of management consultants to its
clients because of access to important information and database as
well as opportunities to expand and have access to both domestic
and local markets.
• Omnibus Investment Code (Executive Order No. 226)-IPP. The
government identifies priority areas of investment every year which
are embodied in the Investment Priorities Plan (IPP) The goals of
this IPP, among other goals are:
1. “To explore other activities/areas that can aid in increasing the
country's exports;
2. To further the growth of agricultural productivity and increase
countryside development by attracting investment focused at
providing adequate industry support and infrastructure system;
3. To focus on sustainable development by supporting activities
and technologies in line with the country's commitment to
environmental protection; and
4. To develop industries/sectors aimed at maintaining competitive
advantage”.

Government provides incentives to those who invest in the

identified priority areas. Entities who would like to avail of the same
should first be registered with the Board of Investments (BOI). In
the IPP 2001, the management consulting sector was not
specifically mentioned to be eligible for registration with the BOI
and avail of incentives from the government, however a very
closely related sector, the information technology services (ITS)
can avail of these incentives.

“IT Services covers projects offering services both in the domestic

and international market, in the following activities are eligible for
BOI registration:

a.) Software development projects that may be divided into three

categories:
• Application software products refer to the development of
packaged software programs that provide solutions to
problems specific to an industry or business (such as
banking, manufacturing, research and development works,
etc.). These also include programs that could address
problems and functions across industries (such as human

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 resource management, payroll system, project management
and other officer related activities).
• Middleware products are computer programs that are used:
a) as interface among disparate application systems (e.g.,
web-based applications and mainframe-based or legacy
applications; or b) to develop and manage new applications
that are robust, scalable and highly available.
• System Software products pertain to the development of
operating system-type and software tools-type packaged
programs. Included are Operating Systems and Internet
browsers and search engines.
b.) IT – enabled services cover providers of services related to data
encoding, digital directories, digital catalogues, legal records,
financial and accounting records, hospital and medical records,
engineering and design (e.g., computer-aided structural design),
customer-interaction services (e.g., message handling, call
centers, help desk), unified messaging services and voice over
IP.
c.) Support & knowledge – based services refer to other types of
IT-related professional services, including but not limited to,
provision of application or systems as in application service
provider or ASP, consulting services, software maintenance
services, information systems planning, computer and systems
audits and other similar services.
d.) Business Process Outsourcing (BPO) services form a significant
part of the major business process or operating function in a
business enterprise where the services are performed by
another enterprise which is located remotely from it and the
services are rendered regularly and continuously, mainly at the
service providers’ site and are delivered electronically to the
client and/or to other recipients of the services on the clients’
behalf.

Individuals, partnerships or corporations interested to engage in

Information Technology Services (ITS) not yet registered and the
expansion of existing BOI-registered projects may qualify for
registration under E.O. 226 and shall be eligible for incentives
thereof.

All ITS projects will be considered preferred areas of

investments for the next four years starting from the effectivity of
the 2000 IPP.

Since the activity is listed in the IPP, for Filipino entities (at least
60% Filipino – owned), export commitment is not required.

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 For foreign entities (more than 40% foreign – owned), at least
70% of total services rendered must be exported. If pioneering,
100% of services may be rendered to the domestic market.
Provided, however, that the firm complies with the requirement
under the Foreign Investments Act that the paid – up capital is at
least US $200,000 which will be lowered to US $100,000 if (1) the
project involves advanced technology as determined by the
Department of Science and Technology or (2) hires at least fifty
(50) direct employees.

To be eligible for pioneer status, a project must comply with any

of the following:

1. It must utilize new or untried technology.

2. It must have substantial venture capital.
3. It will introduce a major innovation in software development.
4. The project cost should be at least P100 million.”

Another existing policy which may not directly affect all players
in the management consulting sector but would particularly affect
those who bid for projects in an international funding institution like
the World Bank is expressed in the following terms based on the
ADB Guidelines on the use of Consultants:

“Section 1.04 . Consultants to be financed by the bank from its

ordinary capital resources must be engaged from any of the Bank’s
member countries. Consultants to be financed by the Bank from its
Special Fund Resources must be engaged from any of the eligible
source countries specified by the Bank from time to time.”

4.2 Commitments under GATS

The Philippines has not made any specific commitments for

the management consulting services subsector but in any case,
outlined is an overview of the commitments under GATS.

There are horizontal restrictions that summarize broad

measures affecting commercial presence and investment, real
estate transaction restrictions, government subsidies or taxation,
and temporary movement of natural persons. In addition to these
restrictions, developing countries have also established
preferences for firms that offer the best terms for transfer of
technology. The horizontal commitments supersede any sector-
specific commitments. To assess the full extend of trade
liberalization, horizontal commitments have to be examined in
conjunction with the sector-specific commitments.

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• Commercial Presence and Investment Restrictions

The acquisition and control of a domestic business by

a foreigner may be subject to investment ceilings, restrictions as to
the type of assets that may be held, local incorporation and
presence requirements, and government approval.

• Real Estate Transaction Restrictions

Many countries restrict the purchase of real estate and

the acquisition of land. Nationality restrictions and deposit
requirements are relatively common. Often, these regulations are
established by sub-federal levels of government and as a result
tend to be extremely complicated. Rather than impose restrictions
on domestic real estate regulations, the GATS rules require
transparency and access to information about these rules.

• Government Subsidies or Taxation

To clarify issues related to domestic taxation and

access to subsidies, member countries provided specific comments
in their schedule on this issue. Foreigners may not be eligible for
certain subsidies or may, under special circumstances, have to pay
a different tax rate. For example, the United States
reserves the right to impose higher taxes on a national, resident or
corporation of a foreign country where a national, resident or
corporation of the United States is being subject to discriminatory or
extraterritorial taxes. All countries maintain sovereignty over
domestic issues of taxation and subsidization.

• Movement of Natural Persons

Generally, the GATS does not prevent a Member from

applying measures to regulate the entry of natural persons into, or
their temporary stay in, its territory. The movement of natural
persons is unbound under most GATS schedules. However, many
Members generally committed to allowing temporary entry for
measures concerning intra-corporate transferees (managers,
executives and specialists), personnel engaged in the
establishment of a business, and service salespersons.

Permanent entry is not dealt with in the GATS and remains

under the authority of local immigration authorities.

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 Specific commitments made by different countries in Asia
(Singapore, Hongkong, Japan, Indonesia, Korea, and China),
European communities and United States of America are shown in
Appendix B. It specifies commitments based on the four modes of
supply namely:

Cross-border supply which is defined to cover services flows

from the territory of one member into the territory of another
Member (e.g. banking or architectural services transmitted via
telecommunications or mail);

Consumption abroad which refers to situations where a

service consumer or his/her property moves into another member’s
territory to obtain a service (e.g. tourism, ship repair or aircraft
maintenance);

Commercial presence which implies that a service supplier

of one member establishes a territorial presence, including through
ownership or lease of premises, in another member’s territory to
provide a service (e.g. insurance companies or hotel chains); and

Presence of natural persons which consists of persons of

one member entering the territory of another member to supply a
service (e.g. accountants, doctors or teachers).

5. Market Potential/Foreign Market Demand and Competitition

5.1 Entering Foreign Markets

There is a high degree of concentration as a consequence of the

volume of capital and complex and interdependent organizations needed
to maintain technological advantage., exploit several products
simultaneously, and to maintain economies of scale. Similar to auditing
and advertising firms, for management consultancy firms, relations with
customers are established on a worldwide basis, making it difficult for
enterprises from developing countries to compete and gain access to
world markets.

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 As mentioned in section 2.3 access to foreign markets can be seen
based on the four modes of supply namely cross-border supply,
consumption abroad , commercial presence, and presence of natural
persons. Based on interviews made, there are numerous management
consulting firms in the Philippines who had in one way or another gained
experience working in foreign markets. Many local business and
management consulting firms were able to gain access over foreign
markets through the following :

• Growth of partnerships and joint ventures with foreign consulting

groups. The partnerships and joint ventures usually bring mutual
advantage. The foreign partner bring greater experience,
professionalism, technically-skilled staff, and financial resources as
well as opportunities for exposure in foreign markets. The local
consulting firm brings familiarity with the domestic environment,
physical conditions, , culture, regulations, expertise of consultants and
lower costs. These can either be in the form of formal and long-term
partnerships or short-term subcontracting agreements Cross border
supply and presence of natural persons were made possible in
instances when some specific projects or work are subcontracted with
the Philippines-based firm. In the Philippines, because of availability of
skilled technology professionals and competitive fees charged by
consultants, some technology-related work are subcontracted by
affiliated firms. These professionals either do the work in the
Philippines or they are sent overseas to do the job. Consumption
abroad was also made possible especially for client companies of
partners based in other countries. These client companies are referred
to the Philippine affiliate company whenever they would want to
expand and establish office in the Philippines. There are also few
Filipino management consulting firms which were able to establish
their commercial presence through an overseas office (SGV and
TeamAsia).
• Overseas expansion of domestic clients also enabled Filipno
consultants to have access to foreign markets. This was made
possible since some domestic clients trust the expertise of their
consultants so they would not want to get another consultant in
another country. Other reason is that Filipino consultants charge
lower fees as compared to their foreign counterparts.
• Funding of institutions like ADB, World Bank, USAID, AusAid, Japan
Foundation, Ford Foundation , among others also enabled some
Filipino consultants to gain access through foreign markets especially
for projects to be accomplished in other countries. Expertise of
Filipino management consultants and some Filipino management
consulting companies (PRIMEX, OIDCI, among others) is known by
these institutions. As one of the developing countries in Asia, having
the competencies and track record of Filipino consultants together with

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 fluency in the English language, and competitive costs are among
the reasons why these companies are awarded these grants.

But inspite of efforts to gain more access to foreign markets by

Philippine management consulting companies, there are still very few
companies who are able to compete successfully in the foreign market.
Some difficulties and limitations cited by some players in the industry in
entering foreign markets are as follows
• Rigid competition in the global market. There is a strong presence of
global management consulting companies in different countries across
the globe and they pose very stiff competition with smaller players in
the global industry. This is even made more difficult since many
management consulting companies in the Philippines have not
established any brand name or brand recognition in the global industry.
Most of the experiences gained in foreign markets are only through
subcontracted agreements with bigger players in the industry.
• Needs of market in different countries, especially in Asia, are
localized. This was specifically mentioned by a consultant from a
marketing consultancy firm. There is a need to thoroughly study the
culture, regulations and industry in foreign markets, especially the
neighboring Asian markets.
• Difficulty in promoting the company in foreign markets due to a poor
image projected by the country. This brings prejudices on the
competencies of the company.
• Difficulty in access to information centers and cooperation in getting
information from institutions abroad, especially in areas where there is
no Philippine consulate. Access to information centers is important for
consultants. Even with the presence of Internet, there are certain
information needed by consultants that are only available through
other institutions, government or private.
• Limitations set related to access to foreign markets when partnerships
are formed with foreign consulting companies. Philippine-based
consulting firms affiliated with foreign partners gain access to foreign
companies who are coming in and investing in the Philippines through
referrals of foreign consulting partners. However, there are some
restrictions in entering foreign markets, especially countries where
there are established offices of the foreign partners. Although,
companies with foreign partners mentioned that this is part of the
agreement and the advantages outweigh the disadvantages in the
partnership.
• Low fund base/financial capability to undertake full-scale marketing on
an international scale or establish an office overseas. Marketing
management consulting services would entail preparation of proposals
for bidding purposes as well as conducting presentations and visiting
different countries to establish networks . These efforts require a big
budget.

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• Low fund base/financial capability to finance operations for huge
projects granted by institutions where consultancy collection of fees
are classified as “fees contingent on results”. Fees are paid only after
specific results are achieved. This results to limitations as far as
selecting only the smaller projects to bid for.
• Great disparity in the professional fee structure of Filipino consultants
as compared to the foreign experts/expatriates. Some consultants
report that the difference is from 50 to 100%. Although competitive
pricing is deemed by some as a competitive advantage of Filipino
consultants and consulting firms, others deemed it to be discriminatory
especially when the Filipino and foreign consultants deliver the same
kind and quality of work.

5.2 Extent of services rendered abroad

A larger number of global consultancies are now able to provide for

the international needs of clients. Many consulting firms in the Philippines
have vast international experience which were either gained through the
foreign partner firms or through work experiences of consultants
employed from abroad. But these are usually smaller projects
implemented in cooperation with other agencies.

Some of the countries where some of the Philippine management

consulting firms extended services are Indonesia, Afghanistan, Beijing,
China, Malaysia, Japan, Egypt, Brunei, Singapore, United States,
Singapore, Hongkong, Sweden, Bulgaria, and Mexico, among others.

These projects were usually made possible through partner

agencies (from the United States, Europe, Australia) and multilateral or
bilateral institutions.

In spite of availability of expertise in some of the Philippine

management consulting firms, rendering of services abroad are at times
not pursued due to difficulties encountered. There is lack of interest
among many qualified local consulting firms to pursue overseas work due
to limited chance of success compared with the high cost of developing
such markets and difficulty in obtaining registration with overseas clients.

There is also a perceived absence of focused marketing approach

aimed at promoting and developing the industry’s capabilities in the
international market. There is lack of financial, technical and administrative
capability to compete in international markets, particularly in International
competitive Bidding Projects.

Another factor that is left undeveloped is the development of strong

and long-term linkages with overseas business groups and other

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consulting firms/associations. To guide the firms in establishing linkages
Appendix H presents a directory of management consulting associations
in different countries.
5.3 Foreign Market demand and Competition

5.3.1 Asia and the Pacific

Asia-Pacific is the region that many countries, including the US

and Europe are looking into for their expansion. The leading global
management consulting firms are specifically positioning themselves in
this area knowing that this region is where most of the expansion would
take place and would most likely necessitate assistance from consulting
firms. Demand for management consulting services is growing in the
region. This is attributed to a similar growth trend in investments and the
economy. Appendix D presents some of the available market studies on
specific countries in the Asia-Pacific such as Thailand, China and Laos.

Demand in Thailand are more related towards finance-related

consulting services such as financial restructuring, mergers and
acquisitions, debt collection and privatization of state-held transportation,
communications and energy enterprises. China is a fast growing market
for consultancy services. The industry only took off in 1996 and expanded
from zero to over one billion dollars in revenue. Sixty-five percent of the
consulting firms are foreign which captured 85% of the market. Sectors
where a high demand for consulting services lie are finance, information
technology/telecommunications, and health care/pharmaceuticals. It was
said that management consulting that can deliver locally tailored solutions
sensitive to local culture, political dynamics, and the legacy of socialist
economics will be in the best position to gain market in China. The big
foreign consulting firms are already present in China while others formed
joint ventures with China-based consultants. There are limited market
studies available in other countries, but since most of the funding
institutions have allocated funds for Asian growing economies like
Cambodia, Laos, Vietnam, and Sri-Lanka then it is expected that
development management related consulting services are needed in
these countries. The Philippines, with the presence of consultants with
previous work experience in these countries is in a good position to vie for
these projects. It was cited by one of the consultants that, Filipino
consultants would know more of the economy, culture and management
trends and even language in Europe and US but not much in its
neighboring Asian countries. The proficiency in the use of the English
language and some similarities in the economy and culture of its Asian
neighboring countries provide opportunities for Filipino consultants in the
region to set up overseas offices, form partnerships or compete for
projects with funding institutions concentrated in the Asia-Pacific region.
And since many of the largest consulting firms in UK and US are focusing

84
on Asia, there are also opportunities to develop partnerships with these
firms to become an entry point in the region.

5.3.2 Europe

Western and Central & Eastern Europe are two distinct markets in
Europe. Western Europe comprises 27 to 30% of the total world market
for management consulting services. The integration of the economies
and culture of acceptance of the management consultants in businesses
make Western Europe a big market for the services. However, there are
various cultural differences and preferences in some areas for certain
businesses in their selection of consultants. Appendix E presents a
summary of market studies for Germany, Italy, Switzerland, United
Kingdom and Bulgaria. The market and the market needs in Germany,
Italy, Switzerland, and United Kingdom is very sophisticated. The market
is very receptive of consultants but Philippines may have difficulty in
entering the market. A possible opportunity are joint ventures,
partnerships or affiliations with the large firms in these countries who have
interests in expanding to the Asia-Pacific but have not been able to
establish their footing in the area. Bulgaria, along with Central and Eastern
Europe is moving towards a capital economy. This presents opportunities
for management consulting firms which are needed in the transition of the
economy. Philippines, with its capability to affiliate with foreign partners in
these areas or resources to set up overseas office in these areas will
present potentials for management consulting firms. Needs of the market
will be concentrated more on setting up and entry strategies.

5.3.3 North America

Eversince the development of management consulting services,

USA remained to be the leader in the industry in terms of revenues,
innovation in the operations of consulting firms, and development of
service technology. It was estimated that the region accounts for almost
40% of the world market of consulting services. The US market is very
receptive to management consultants. The benefits derived from
consultants and consulting firms have been proven time and again by
different firms in the region. Appendix F presents the available market
study about the region. Like Europe, US is an established market where
competition is very rigid. Opportunities for the Philippines lie on
developing joint ventures, partnerships and alliances with the larger firms
in the country.

5.3.4 Others

Other regions, such as the Middle east also represent some market
potential and prospects for the industry. Refer to Appendix G for available

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 market studies on different countries such as Kuwait, Panama, and
Argentina. In these three firms, American firms dominate the market.
Managers are also mostly US-educated. This presents stiff competition
areas for Philippine management consulting firms.

6 Supply Capability

6.1 Offered Services

The services offered by management consulting firms in the

Philippines are not very far from those offered by management
consultants abroad. There is also a trend towards integrating information
technology into the services that are offered. In the Philippines, the
integration of information technology is mostly seen with consulting firms
with foreign affiliations. There are also other services offered apart from
the strategy, finance, marketing, operations and human resource-related
services. There are specialized services based on either the sector a
company focuses in (e.g. tourism) or specific services like franchising,
change management etc. As a developing nation, there is also a
significant part of the industry which specializes in development
consulting. IMPHIL, as a matter of fact, is mostly made up of development
consulting firms (OIDCI, PRIMEX, Madecor, SEA Consultants, and
SEARCA) and the big players in the industry which mostly started as
accounting and audit firms and later affiliated with global management
consulting firms (SGV with Andersen, Laya Mananghaya with KPMG,
and J. Cunanan with Price Waterhouse).

Table 37. Services offered by Philippine management consulting firms

Management consulting services
General and strategy management
services
Human resource management
Marketing management
Production/operations management
Financial management
Specific areas of service
Strategy management
Business Planning
Economic and Feasibility studies
Country risk analyses
Corporate reorganization
Human resource development
Organizational development
Training Needs Analysis and Design
Executive Recruitment
Market review and strategy management
Market strategy and conceptualization
Corporate Communication
Customer Satisfaction Checks
Events Management – organizing conferences, exhibits,
seminars, workshops
Public relations
Production analyses and Optimization
Total Quality management
International Standards (ISO)
Operations and management audit
Financial Planning and evaluation
Mergers, acquisitions and investments
Corporate valuation and analyses

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 Management consulting services
Technology Management
Specialized services
Development consulting
Specific areas of service
Investment assistance
Enterprise Resource Planning (ERP) Solutions
Internet based technologies/Market solutions
Systems Analysis and Design
Management Information systems design/ Strategic
Information systems
Technology applications
Software Package Development and evaluation
EDP Training systems development
Franchising consulting
Tourism-related consulting
Compensation survey
Benefits and insurance
Health-services related consulting
Risk management consulting
Environmental and natural
resource management (forest land use, environmental
management, solid waste management, impact assessment)
Integrated Area Development planning (Ecozone and
Industrial area development planning, Land use planning)
Policy Review and Formulation
Micro-enterprise development

6.2 Areas of Specialization

Consultancies’ and Consultants’ specialist knowledge remains to

be the prime attraction for clients. For management consulting firms in the
Philippines, specialization is based on expertise of consultants that make
up a firm (CPAs, agriculturists, engineers, economists etc.). For
management consulting firms which evolved from accounting and audit
firms, financial management remains to be their expertise, however, slowly
they are offering services other than those related to finance. Most of them
offer a wide array of services so they are considered as “full-service” firms.
Finance and human resource are two major areas where most firms in the
Philippines specialize. In finance, because of the number of accounting,
auditing and bookkeeping firms which also offers management services,
these firms were able to offer finance-related consulting. In human
resource, specialization is mostly in the areas of training and organizational
development. There are also some firms that specialize in particular
sectors such as agriculture, tourism, hotel and restaurants, and
development consulting. Refer to Table 38.

Table 38. Areas of specialization of Philippine management consulting

firms
Area/s of specialization Company
General and strategy management Innovision Strategic Development Consulting
services AYC Management consultants
Leverage International
Human resource management Integrative learning (training)
Intellectron (training)
Stream Training (training)
Ancilla Enterprise development Group
John Clements consultants

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 Area/s of specialization
Marketing management
Production/operations management
Financial management
Technology Management
Specialized services
Development consulting
Company
Asia Business consultants
Guthrie Jensen
TeamAsia
Motivation Asia
Asiatech resource management
Business recovery and turnaround (company turnaround)
Manabat-Deloitte Touche Tohmatsu (Finance, tax advisory)
J. Cunanan-Price Waterhouse
Laya-Mananghaya -KPMG
C, Valdez Company
Ernst & Young
Alba Romeo Management Consultants
DTTI Consultancy
CLRV Neo-Synergy
Equity Managers
Incuventure Asset
EM Management Consulting
Iberpacific (ERP/e-business)
Corporate Information Solutions
Andersen (ERP)
Workgroup connection
Change consultants (change management)
Enterprise development group (change management)
GMB Franchise Developers (franchising)
Solutions, Inc (benefits and insurance)
Asia-Pacific Projects (tourism)
Meganomics Specialists (agriculture)
SEARCA (agriculture)
Watson Wyatt (compensations survey)
OIDCI
PRIMEX
ARMDEV
Economic Development Foundation

6.3 Expertise/Technical Competence of Manpower

Only a manageable number of personnel is maintained by

management consulting firms. According to interviews made, there is a
need to maintain low overhead costs, especially because of the seasonal
nature of the business. Projects may not be there at specific times. Most
of the small and medium-sized and a few large management consultancy
firms, instead maintain a database of local and foreign consultants who
can be tapped for specific projects. Only the senior managers and/or
partners together with some administrative staff are maintained in the
regular operations. Nevertherless, the expertise and competence required
from these consultants do not differ as much.

Senior consultants and partners in small and medium-sized firms

are given privileges such as flexibility in time since many of them are also
consulting professors. In larger firms, they are maintained to perform
administrative and marketing functions in the firms.

No specific course or school trains consultants. They are also from

different fields of study. This is the reason why most recruitment of junior

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 and senior consultants is not done in schools. They are most often
referred personally and are preferred if they have a significant number of
years of experience and exposure. Table 39 summarizes the
expectations of firms from their employees.

The academic achievement and work experience of consultants in

the Philippines is vast. Many of the consultants gained their masteral and
doctoral degrees abroad either through scholarship grants or through
personal subsidy. Many were also exposed to international training and
symposia at the expense of their firms or through individual subsidy.

Objectivity and knowledge of best practice is another reason why

consultancies are chosen to solve client problems. Majority of Filipino
consultants are retired civil servants who has acquired long years of
experience and expertise. The country has a large pool of managers and
planners with masteral and doctoral degrees gained locally and abroad.
The consultants are known for high trainability and high computer literacy.
In addition, consultants also have proficiency in the use of the English
language.

Table 39. Profile of Manpower Competence and Expertise of employees in

Philippine Management Consulting firms
COMMON POSITION/S ROLE COMMON QUALIFICATIONS
Research Assistant, Research Employed to do number Academic achievement
Associate, Analyst, Business crunching (if area of consulting is (graduates of BA or BS degrees)
Analyst, Research Analyst, quantitatively oriented), data related to services offered by the
Associate Consultant, Junior collection, and/or assistance in firm (Human Resource,
Consultant report preparation . After a year Engineering, Management,
or more, analysts are more likely Computer)
to take a responsible role with With 3 to 5 years relevant work
problem solving and client contact experience

Other qualities:

Maturity
Problem solving skills
Logical reasoning
Business acumen
Team orientation
Writing skills
Presentation skills
Ability to cultivate relationships
Facility with computer software
Quantitative and statistical skills
Energy/stamina
Pattern of leadership

Senior Managers, Senior Oversee projects, deal directly Academic achievement

Consultants, Partners
with client and conduct meetings (graduates of MBA or PhD
and presentations, supervise staff degrees) related to services
in the implementation of the offered by the firm (Human
project, makes decisions and Resource, Engineering,
recommendations to the client Management, Computer)

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 COMMON POSITION/S ROLE COMMON QUALIFICATIONS
With 10 to 40 years relevant work
experience

Other qualities:

Can work independently

Maturity
Leadership
Problem solving skills
Logical reasoning
Business acumen
Team orientation
Writing skills
Presentation skills
Ability to cultivate relationships
Facility with computer software
Quantitative and statistical skills
Energy/stamina

The technical competence and qualities looked for by firms

in the Philippines do not differ with those looked for by the global
management consulting firms as shown in Table 40.

Table 40. Profile of Manpower Expertise and Human resource Development

efforts in Global Management Consulting firms
Consulting Firm Human Resource development
Andersen Consulting
Profile

Employment increased from 21,355 in 1989 to 65,000 in 1999

Workforce is diverse and professional

New graduates and MBA levels start as analysts or consultants

Offers the following for employees:

Recognized leader in training and invests nearly US $ 600 million annually in the
professional development of their people

Developed “communities” made up of 100 to 150 individuals . They are intended

to provide a consistent home for employees and influence almost every aspect of
an employee’s career including professional development and mentoring

Introduced in US and Canada the Women’s Mentoring Program which aims to

improve retention of women managers by pairing Manager-and-above proteges
with Associate Partner or Partner mentor.

Offers flexible work arrangements such as part-time and leaves of absence in a

case-to-case basis. Request is evaluated based on the reasons for request, work
performance and potential success with the firm

Implemented the Andersen Consulting at Your Service” Concierges based on

employee feedback that the number one barrier to doing their job more effectively
was handling chores that had to be done during business day from walk the dog

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 Consulting Firm Human Resource development
to pick up from dry cleaning to shopping gifts. The service is offered at nominal
cost to employees and Andersen Consulting picks up bulk of expense.

Competencies looked for:

Need people with strong ecommerce skills, understands internet technology, and
potentials of eEconomy

Specialization in the industry typically begins after a few years on the job

Cater also to professioals with experience who have strong ecommerce skills

Qualities such as being

Well-rounded
Strong academic Performer
A lifelong earner
Committed to developing a
Career
Interested in and understands what
is done in the consulting
Skilled at written and oral commu-
nication
Interested or skilled in ecommerce
Team and results oriented

Deloitte consulting
Profile

New graduates join as business analysts or a systems analysts

MBAs with significant work experience were also taken in as Senior Consultants
which leads to Manager, Senior Manager and Partner

Offers the following for employees:

There is a great opportunity for rapid professional growth

Competencies looked for:

Focus of recruitment are in the areas of package implementation which requires

expertise with PeopleSoft, Oracle and SAP. There are also tremendous needs in
the Client/Server Solutions area

Ability to think clearly, logically and

with insight
Quick mind and high level of energy
Common sense and judgment
Ability to secure the cooperation of
others and persuade them to act
Flexibility and sense of humor
Desire to broaden one’s career focus
beyond a specific technical or
functional skill
With self-confidence to work effectively
with people at all management levels
With initiative, drive and persistence

KPMG Consulting Profile

Graduates join company as management analysts or consultants. They work

closely with senior managers and managing directors

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 Consulting Firm Human Resource development

Employees receive an initial grant of stock options.

Offers the following for employees:

Flexible hours
Telecommuting
Employee and team performance bonuses
Recognition awards
Departmental outings
Fitness club membership discounts
Reduced rates for day care child
facilities
Happy hour occasions

Competencies looked for:

Technical skills
Industry knowledge
Innovative thinking
Dedication to continuous learning and
development of skills

Pricewater-house
Coopers Offers the following for employees:

Offers training and career development programs for new graduates and MBAs

Competencies looked for:

Hire peole who have a proven track record at the best organizations across all
industries and functions

Those who have demonstrated initiative and success in their education and
previous work experience

Good communicators

Passionate about their work

Provides best service to clients

Top grades

Creative thinking skills

Analytical skills

Ernst & Young Profile

Employs 77,000 people in more than 130 countries and 689 office locations

New graduates’ entry level are staff accountants, tax consultant and advisers

Offers the following for employees:

Offers innovative continuous learning process

Support people to earn masters in accounting

Competencies looked for:

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Consulting Firm Human Resource development

Well rounded
Strong leadership skills
Strong business acumen
Strong communication skills
Ability to be flexible in the continuously
changing e-economy
Ability to work well with others
High performance individuals
Team-oriented

6.4 Existing Association

To organize and enhance the competitiveness of the industry, the

Institute of Management Consultants of the Philippines (IMPHIL) was
established in 1985 as a professional association of management
consultants in the Philippines. It is under the umbrella of the
Confederation of Filipino Consulting Organizations (COFILCO), which
represents Filipino professional consultants from eight member
associations, mostly from the fields of engineering and architecture.

IMPHIL has an existing membership of 19 management consulting

firms and one (1) individual member. The members represent some of the
more established management consulting firms in existence for a number
of years in the Philippines.

In its charter, IMPHIL had specifically set the following objectives

for its existence:

• “Enhance and encourage the development of the art and

science of management consulting to its highest standards
through the provision of professional services and the
organization of appropriate activities by Institute’s members;
• Work towards making the profession of management
consultants recognized; respected, and accepted as
providing a valuable and often indispensable service to
private business and industry and to government and public
services;
• Serve as forum for the exchange of information and as a
center for cooperation and collaboration on matters relating
to management consultancy;
• Foster and encourage professional, social, and friendly ties
among the members of the Institute;
• Foster the highest standards of personal integrity and
competence in the profession of management consulting,

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 and towards this end, endeavor to set the requirements and
standards for the exercise of the profession;
• Seek the advance of the profession of management
consultancy by extending its frontiers of knowledge through
involvement in study, research, and similar activities; and
• Consult, cooperate, affiliate with groups, associations,
organization or institution, whether local or international,
having similar or identical objectives with a view of
advancing these same objectives.”

IMPHIL has made efforts to enhance the competitiveness of the

industry. Recently, it spearheaded the efforts to come up with an
integrated marketing brochure for IMPHIL members which will be used to
market the member firms and their services especially to foreign clients.
It was also able to initially develop its own website at www.imphil.org to
provide information regarding their organization. It is also active in its
efforts to see the passage of the National Consulting Act which aims to
help Filipino consultants. According to Mr. Viado, other endeavors that
IMPHIL aims to achieve for the past years but was not able to gain
grounds and be successful in it are the (1) establishment of an
accreditation system in coordination with NEDA ; and (2) linkage with the
Bureau of Export and Trade Promotion of the Department of Trade and
Industry. Although, initial meetings were conducted between the
government agencies and IMPHIL, there are a lot of areas that IMPHIL
and these government sectors would still need to work on.

There were difficulties encountered by IMPHIL specifically with regards

to forming a secretariat to really focus on efforts and work on the
organization’s plans. The officers of the organization have to face the
demands of their own businesses and projects, there is a need to really
have working group to focus on the issues confronting the industry. The
costs involved in forming a secretariat is also another area of concern with
only 20 members to support the said endeavor.

In a position paper by COFILCO on the development and growth of the

Filipino consultants, there is no doubt about the consulting industry’s dollar
earning potential. However, COFILCO stand witness that most of the
major consulting contracts are not by Filipino consulting firms. Large
consulting works are undertaken by foreign consultants vis-à-vis foreign
assisted projects. It is not difficult to show that the local consulting firms
are actually subsidiaries of international consulting firms operating through
majority owned Filipino corporations. Under these conditions, the Filipino
consultants are not the prime and lead consultants in his own country.
The unfortunate result is that the Filipino consultant could not develop into
a world-class consultant that can penetrate the international market.

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 The COFILCO recognizes that the present state is already at an
alarming stage of deterioration and stagnation that may stunt permanently
the growth of the Filipino consultants. COFILCO has identified CIAP as
the government agency that can support consultants to address the
problem of the local consultants.

7. Industry Training Needs

7.1 Quality and Quantity of Training

As seen in Table 38, the global management consulting firms

to manage growth, and maintain staff and quality of service, place
emphasis on development of its people. Support is given to those who
pursue further studies, and offers training and development programs for a
continuous learning process to take place. Consultants, due to the nature
of their work are people who would have a high need for a learning
environment. But minimization of stress and strain in the workplace is
also done like offering concierge services, part-time work options,
sabbaticals, and restricting travel to weekdays.

For management consulting firms in the Philippines, a recent

survey made point out to the following practices of firms in the training
and development of its employees:
• Firms develop their senior consultants, managers from within the
company rather than hiring from outside
• Firms provide job-specific training and training on integrative skills to
their managers on the job
• Training and development of technical staff or junior consultants are
usually done either through in-house training or by hiring other private
training firms.
• Training given to junior consultants are usually in the form of group
planning activities, on-the-job meetings, decision-making courses, and
system analysis
• Development of both junior and senior consultants are also made
possible through the use of e-groups through which relevant articles
are distributed to employees
• A few firms have very stiff training and development program for their
consultants which were carefully planned and implemented

7.2 Identification/Listing of Training Needs

Representatives from different management consulting firms all

agree that training and development of human resources (consultants) is
a prerequisite to enhance the competitiveness of Philippine management
consulting firms. Consulting is a knowledge/idea game and the human
resource development requirement is quintessential. Filipinos are very

95
adaptable professionals, culturally, they can co-exist with different
cultures, and learn different languages fast. To add to that is the fluency in
the use of the English language. There is therefore only the basic needs
for further education and exposure that is needed by Filipino consultants.
Below are some of the training needs mentioned that would assist in this
pursuit.

Education and exposure abroad. Support through government

assistance or availment of necessary information on private scholarship
grants that can be availed by management consultants for further
exposure on new management tools and services. Multilateral agreements
can also be made in sending management consultants for education and
exposure abroad. In doing this, the industry can be assured of growth
and would necessarily result to a corresponding multiplier effect on the
different clients and businesses that the management consultant would
deal with. Trends worldwide and needs of private sector, public sector and
multilateral institutions are mostly geared towards a need for specialists
in various fields of discipline. This can only be done through assistance in
the training of specialists.

Training on the use of information technology. Some management

consulting firms also expressed the need for training on maximizing the
use of information technology such as the internet to get information and
updates, use of database softwares for clients and other data , as well as
softwares that could enhance in the packaging and presentation of
services to clients. This was also seen as a need especially for senior
consultants who need to get updated in recent trends in technology.
Companies with international and foreign affiliations have very good
training and infrastructure related to information technology. However,
management consulting firms without these infrastructure should be able
to upgrade themselves as well to keep abreast with their competitors.
Philippine software associations can provide valuable input on how
management consulting firms can develop and integrate information
technology into their operations and services.

Training on international market development. The numerous small

and medium sized management consulting firms have ahd not much
experience in the international market. To develop their capabilities, the
more experienced players in the industry can share some of the things
that the small and medium sized players would need to know to develop
international market.

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8. Opportunities and Threats

8.1 Opportunities

8.1.1 Socio-cultural

Asia-Pacific is a growth region where the market for consulting

industry is seen by many, including the major global management
consulting players from US Europe, to possess a high potential
because of its developing economies. The Filipino consultants’
characteristics of having a combination of a strong background and
exposure on western education and management as well as familiarity
with some neighboring Asian countries’ culture obtained through
exposure in these countries in previous work experiences pose an
opportunity for partnerships with global consulting firms in their plans
(for those who still have not set-up office) to expand in the Asia-Pacific.
The Filipino characteristic of being able to build good interpersonal
relations, value for higher education, proficiency in the use of the
English language and ability to learn fast are also important factors
that can contribute to increasing opportunities for success of Filipino
consultants and consulting firms.

8.1.2 Technological

Technological changes related to information technology results

to development of new services and new sources of revenue for
management consulting firms. Recent trends show the interrelationship
between management consulting and information technology. The
Philippines, therefore, being one of the leading countries in Asia,
together with India, is among the most promising source of human
resources and software technology . This present opportunities for
the management consulting services sector to take advantage of these
available resources to strengthen their capabilities.

8.1.3 Economic

The Philippines is on a stage towards development. It has

learned from it past economic experiences and these experiences are
the ones that can be used to present opportunities for consulting in the
developing economies like Vietnam, Cambodia, Eastern and Central
Europe.

Filipino consultants charge relatively lower fees as compared to

their foreign counterparts. This is seen by some as a competitive
advantage especially in the submission of bid proposals.

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 8.1.4 Political-legal

As one of the developing countries in Asia, the Asian Development

Bank and other bilateral and multilateral institutions provide
opportunities for local management consulting firms through grants
provided. It is however, limited to those with the necessary skill,
expertise, track record and reputation to be accredited and be included
in the shortlist.

Government , particularly in the areas of public administration, rural

development, education, community, social, and health services
present opportunities for the consulting industry.

Privatization efforts in different countries in Asia like in Thailand

lead to a need for consulting groups to assist the public sector in its
transition.

8.2 Threats

8.2.1 Socio-cultural

Foreign and Brand mentality of clients who prefer foreign and

known consultants over local consultants. Colonial mentality of
clients is a threat for Filipino consulting firms especially wit h the
entry of more foreign firms who form joint ventures with existing
accounting and management consulting firms.

There is difficulty in marketing management consulting to foreign

markets since there is a perceived poor image of Filipinos abroad as
cited by consultants who had previous experiences in marketing
services abroad.

Very few small firms seek the assistance of consultants because

of the perception that consulting is expensive. The market therefore is
limited to large enterprises.

8.2.2 Technological

Technological changes bring about growth of information

technology consultancy firms which also eats up a share in the market
of management consulting firms.

Many Filipino firms are in a dilemma of “without experience, they

cannot qualify for assignments; and without assignments, they cannot
gain experience”. There is inability to develop services and track
record of consultants if there are no opportunities given.

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 8.2.3 Economic

The economic crisis leads to cost cutting in many companies,

including costs related to consultancy services.

8.2.4 Political-legal

In spite of availability of government projects, many consulting

companies try to avoid getting projects from the government due to
difficulties in collecting payments. In other instances, there is also
difficulty in getting government projects because of the stiff
competition and at times preference over foreign consultants.

There is a weak national database on management consulting

industry to be able to assist in the monitoring industry performance,
accessing information on market opportunities, and making decisions
based on reliable and updated information.

9 Summary of issues confronting the Management Consulting industry

The Philippine marketplace is expanding from domestic to global horizons

and its economic base is changing increasingly from resources to knowledge.

The Philippine objective is to foster the competitiveness of the

management consulting industry through the client-focused delivery of
innovative products, services, and policies. But before specific
recommendations are made, this part of the paper summarizes the issues
that confront the industry based on the information gathered as presented in
the previous sections of this paper. These issues will form as bases, along
with the strengths and weaknesses of companies in the industry as shown in
Appendix I and the opportunities and threats in the industry as discussed in
section 6.

Issue 1: There is an absence of reliable data base to properly monitor the

performance of the industry, the real contribution to the economy and the
number of players in the industry. A reliable database is necessary to
properly monitor performance and identify the key areas that would establish
significant development of the industry.

The small size of the industry as compared to other business service

sectors lend itself to be included in “other business services” in the definition
of PSIC. The definition of the PSIC is another point of contention since it
includes activities of management holding companies therefore making
estimates on the performance of the industry unreliable. To add to this is the
very nature of the industry of being diverse. There is a very thin line that
draws the difference between traditional and non-traditional providers of

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management consulting services. There is therefore a need to also include
the specific management consulting services’ contribution in the business of
the non-traditional providers since these may have a significant effect on the
estimation of size of the market for management consulting services. Another
point to be considered is the existence of small players and individual
consultants in the industry. There is more difficulty in monitoring these
individual consultants and small players who may come and go because of
low entry and exit barriers in the industry.

Issue 2: There is a very competitive environment in the management

consulting industry.

The competition in the industry is characterized by the following (1)

existence of large international multifunctional firms with the capability of
offering full-service packages and who have a significant share in the market;
(2) increasing number of non-traditional providers of management consulting
services; (3) low entry and exit barriers in the industry leading to more players
in the industry and poor image of consultants since anyone can just be a
consultant; (4) high supply of consultants and consulting firms and low
demand for the services in both private and public sector markets. There are
recent news indicating a decrease in official development assistance from
other countries. For private sector market, it is concentrated on large firms
and even large firms have limited demand for consulting services especially if
they have internal consultants (corporate planning department); (5) existence
of few players with highly differentiated services. Unlike technology consulting
or market research firms who were able to offer differentiated services
through branded solutions or packages, few consulting firms were able to
successfully do so. Switching costs are therefore very low.
Large, new players and non-traditional providers of management
consulting services have added significant competitive pressures to the local
market . With the blurring of the consulting industry’s boundaries, non-
traditional suppliers are adding to the supply of consulting services available
to the market. In addition, there is a growth in advisory services offered by
public and non-profit organizations such as colleges, universities and non-
government organizations. The competition these entities offer can affect
management consulting firms of all sizes.

Issue 3: Absence of a legal framework and specific government support to

assist in the implementation of accreditation of consultants so as to upgrade
the standards in the industry and counter existence of more “fly-by night”
consulting firms and consultants.

The industry, through IMPHIL, has been lobbying and working for the
implementation of the accreditation of consultants for the past ten years but
have faced a lot of difficulties in the process of doing so.

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 The accreditation of consultants would help a lot in improving demand
and factor conditions in the industry. A reduction in the number of short-term,
one to two projects, fly-by night consultants and consulting firms can be
made if this is implemented. The poor image of consultants will be addressed.
The accreditation would also pave the way to easily market and promote the
services of consulting firms and consultants among local and international
clients.

Issue 4: Lack of industry-wide information on market opportunities abroad.

Most efforts with regards to market research related to consulting
opportunities abroad are done on a per-company or individual basis. There is
no institutional information network to assist management consulting firms
in expanding their market.

Issue 5: Existence of numerous small to medium-sized general management

consulting firms and consultants but lack of locally-established firms with
highly specialized expertise. Global trends as well as available local data
shows that differentiation is a factor in the success of many small to medium-
sized consulting firms.

The Philippine management consulting community is being challenged to

develop new services as a result of rising client expectations and
sophistication, changes in the information technology and growing
competition. Through research and study of the current advances in the
industry, the Philippine management consulting community can differentiate
and customize them to specific client needs. Philippines’ strength in
management consulting is the small and sectoral expertise of some players in
the industry and it is a particular challenge for these knowledge-based
companies to focus significant human resources on new service
development.

Issue 6: There is a need to develop the limited domestic market for

management consulting in the Philippines. To enhance the competitiveness
and capability of management consulting firms, there is a need to expand
opportunities for management consulting in the domestic market.

Private clients are limited to large players in the industry which are mostly
multinational which either have their own internal consultants or would prefer
international management consulting firms recommended by their mother
companies. Very few small and medium-sized firms seek the assistance of
consultants since this is considered an ”expense”. The Philippine domestic
market is not as sophisticated as the clients found in Europe or United States
where small and medium-sized ventures are very much open and
encouraged to seek the expertise and assistance of management consulting
firms to ensure productivity and profitability.

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 Projects obtained through international funding institutions and
government agencies are limited to the available official development
assistance and national budget. There are trends that show a decrease in
the official development assistance as well as increasing number of
international players to compete with in the projects.

Issue 7: There is a growing need for more sole practitioners and small to
medium-sized management consulting firms to be export-ready. Global
market information point out to internationalization of the market and need to
strengthen the players in the various industries including management
consulting.

With the expertise and knowledge resident in the small and

medium-sized firms, there is significant potential to take advantage of the
growing global market. The smaller firms usually cannot compete with foreign
firms for large projects, but with the specialized functional and sectoral
knowledge, they can take on niche assignments with larger firms.

Issue 8: Absence of a focused marketing strategy aimed at promoting and

developing the industry towards preparation for the international market.
Along with a growing need to strengthen the management consulting
capabilities of the players in the industry, there is also a similar need to
market the companies who are capable and willing to compete abroad. In the
face of a limited domestic market, there is a need to expand further into other
markets outside the country.

Issue 9: There is a growing threat posed by technology consulting firms

among management consulting firms. The emergence and growth of
technology consulting firms point out to a growing demand of clients for
information-technology related services.

Information technology plays a big role in the businesses of many

companies. Slowly, even in government, technology is playing an important
role in systems and processes. Technology consulting firms pose a big threat
to management consulting firms especially to those targeting private sector
client companies. Private companies and government corporations, in the
past years have invested heavily on computerization and business process
reengineering. The strategy of many consulting firms now is to recruit
business graduates to complement their technical expertise. These firms
have realized the need to understand business strategy and processes. This
led to solutions known as Enterprise Resource Planning (ERP), Customer
Relationship Management (CRM), e-commerce and e-business solutions.
Since many technology consulting firms are also software vendors which are
used in the implementation of the business processes developed, then it is
expected that switching costs will be high. Therefore, these technology
consulting firms are expected to be there for a longer time to monitor

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implementation of systems that they placed. This has eaten a significant
share in the market of management consulting firms offering services related
to business process engineering, systems evaluation and systems audit. It is
not impossible that these technology consulting firms can grow and become
a full-service consulting firm offering strategic management services and
business intelligence. This is not far-fetched since the services they offer now
are related to tools to implement strategies and tools to obtain continuous
business information to make sound decisions.

Issue 10: There is a rapid growth in the number of consultants offering

management advice, without a widely accepted level of standards, standards
of conduct, then the industry is bound to be negatively affected both locally
and globally.

Since there are no stiff entrance requirements for practicing inthe industry
that are equivalent to other professions. Some of these “ consultants” do not
have training in management consultancy processes and do not subscribe to
professional code of ethics in consulting.

Issue 11: IMPHIL, as an industry association needs to build its capacity to

meet the challenges posed by the growth in the industry.

The mission of IMPHIL is to support and promote the development of

professional management consulting, advance the excellence of practice of
professional management consulting, achieve recognition of the value-added
by professional management consulting and IMPHIL’ s designation as the
standard for the profession. As the national voice of management consulting,
IMPHIL is an important vehicle for strengthening the management consulting
industry. However, there are efforts that need to be taken for more players in
the management consulting industry to be more aware of IMPHIL’s role in the
industry and to also participate in similar efforts taken by IMPHIL.

Issue 12: The increasingly competitive marketplace dictates that in order to

meet the challenges of the knowledge-based economy, firms are required
to innovate constantly in order to react quickly to changes. Shortages of time,
people and capital are major drivers why firms explore the use of external
sources of expertise known as outsourcing. Outsourcing as a practice in the
industry ranges from routine, project-based, short-term contracts to
cooperative agreements, including partnerships and strategic alliances. This
is why many established consulting firms invest to maintain a database of
available consultants and experts as well as consulting firm partners to rely
on for particularly large projects.

Outsourcing of non-core competencies and government privatization are

also emerging as growth areas for expansion of market of consultants. Some
information technology, human resources, and financial management

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consulting firms have the capabilities to become involved in managing
outsourced operations.

Companies agree that outsourcing enhances access to innovation and

strengthen company linkages to the national system of innovation. They are
no longer concerned that by outsourcing they will lose their in-house expertise
or ability to learn. On the contrary, they are eager to learn as much as
possible from the experience of the contractor. Outsourcing will continue to
expand because it is a global phenomenon reflecting changes in the
marketplace in an environment of freer access to knowledge and the rapid
pace of technological change.

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10. Action Plan enhancing Competitiveness

10.1 Recommendations

Based on the analysis of the issues confronting the industry, factor,

conditions of the industry as well as corresponding opportunities and threats
that players face in the emerging global market, below are the
recommendations and action plan to enhance competitiveness of the
Philippine management consulting services industry.

In seeking to promote the growth and national development of the

Philippines Consulting Industry in general and the Filipino consultants in
particular, the proposed action plan will approach the objective at three levels:
The government, COFILCO itself (being an umbrella organization that
represents Filipino professional consultants) and the other related
organizations levels, which includes IMPHIL. Parallel to these approaches
will be a legislative approvals of reviving the passage of the proposed
National Consultancy Act:

Government Level:

2. To seek a government policy statement that the government

supports the engagement of Filipino Consultants and an assurance
of a level playing field:
a. in loan negotiations
b. in project scoping and position
c. in national project (should hire consultants instead of hiring
employees, as in-house staff of the agency, limit agency
capability to contract management

2. Engagement of the Filipinos as prime or lead consultants.

For foreign assisted project, must be at least joint ventures (50-50

min) with the Filipino consultants for two(2) years, then Filipino consultants
as lead consultant for the next five (5) years, and then 100% totally
Filipino consultants onwards. For locally funded project, only Filipino
consultants as lead or Prime consultants.

3. Increasing the fees of local consultants.

Standard rates (minimum) for local consultants, for locally-funded

projects. Standard rates for Filipino consultants at international rates for
international selection of consultants.

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4. It is strongly recommended that the Implementing Rules and
Regulations of E.O.164 the procurement of Consulting Services for
Government Projects, or the Consultancy IRR which provided a
systematic and standard set of procedures in the hiring of local and
foreign consultants be strictly and fully implemented. The
consultancy IRR was conceived to develop a more orderly, uniform
and transparent set of procedures in the selection of consultants
and likewise increase the participation of local consultants as well
as to provide adequate and fair systems, rules and conditions
governing government’s procurement of consulting services many
projects. No less than the former president Fidel V. Ramos in 1992
articulated the fact that successful consultancy implies rich project
experience and high technical capabilities, as demonstrated by
Filipino consultants in a wide and diverse range of fields. “They not
only provide needed expertise to plan, build and manage project in
the country, but also in foreign exchange from project involvements
abroad,” but first track record must be developed. And this was not
the general case among local consultants. Their flight was sad and
a lonely one. Their experience in obtaining government project
since the consultancy IRR was characterized by frustration and
disappointment. They have become a second rate citizen in their
own country and moved in the shadow of their foreign counterparts
as regards to governments projects. The Philippine Management
Consulting Industry is a potential giant if given an opportunity to
grow and develop its wings to become a force to contend with
global management consulting. The industry is now expressive of
its remaining hope on the full implementation of the Consultancy
IRR to fulfill its four basic principles. These are: first, to achieve
maximum efficiency and economy in the development and
implementation of development projects and related activities;
second, to enhance the growth of the local consulting industry and
to optimize the use of local expertise, material and resources; third,
to bring about the transfer of new technology into the country; and
fourth, to maintain transparency of government procurement
processes and procedures. The local consultants are one in the
export potential of their craft but a faithful compliance of the
consultancy IRR is a necessity whose time has come.

5. Monitor through NEDA, EDC and congress committee on trade and

industry the full implementation of the consultancy IRR. In the spirit
of the transparency, there is a need to publish in the Web, the list of
the government projects for bidding in line with the E-Commerce
act.

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 6. Revive and lobby for the passage of the National Consultancy
Services Act which was based on E.O.164. There is no law
governing the consulting industry which calls for an organized
regulatory body of government that will supervise, control and
enhance the industry, and in the selection and hiring of consultants
for government infrastructure and other projects giving priority to
Filipinos and/or Philippine Consulting firms thus make them globally
competitive.

7. Impose penalty for consultants not complying with the NEDA

guidelines.

8. To assist the Filipino consultants to penetrate and maximize

participation in the international market.

• Policy to support the local consultants in foreign assisted local

projects to develop capability and gain experience.
• Policy to promote local consultants through trade shows,
advertisements by the Philippine government
• Policy to support Filipino consultants to obtain software license
at reasonable rates and terms.
• Provision for incentives such as tax breaks to those who
penetrate the international market.

COFILCO Level and other related association level

1. Continuous dialogue with cabinet secretaries involved in policies related to

infrastructure and hiring consultants. DTI, NEDA, DPWH, DOTC, DILG,
NPC, NHA, PPA and NIA.

2. Capability-building of IMPHIL. IMPHIL, with the support of the

government and other non-member players in the industry should be able to
build its capacity through an aggressive campaign in increasing membership and
developing programs to be able to achieve the objectives for which it was
founded. IMPHIL was primarily found to represent the management consulting
industry as well as assist in enhancing the competitiveness of the industry. It has
a big role to play in competitiveness-enhancement of the industry. Its members
are among the well-established and long-existent consulting firms in the country,
but with the increasing diversity in size and specialization of management
consulting firms, it would have been ideal to have significant representations of
the other management consulting firms. IMPHIL should make aggressive efforts
to open its doors to more number of members who can commit to its existing
code of professional ethics. This can be done through regular press releases,
regular updating of its website, organizing professional development programs
for management consultants, maintaining a secretariat, developing strong

107
linkages with local professional and industry associations and international
associations.

Regular press releases, possibly in publications like government

newsletters, professional and industry associations’ newsletters, client
companies’ newsletters, newspapers’ business sections, business
magazines, academic newsletters and community newsletters are possible
means for the industry to become aware of the existence of the organization.
IMPHIL may not need to invest much in this if it can use its network linkages
with the government (like DTI, NEDA), its clients, professional and industry
associations where some of the consultants or key employees of IMPHIL’s
member firms are associated and linkages with academe where some of
IMPHIL member firms’ part-time consultants are connected. The regular
press releases may contain any announcements of upcoming actitivities of
IMPHIL, trends in the industry based on regular mini-surveys that can be
conducted by IMPHIL, publishable success stories with IMPHIL members’
clients, management consulting practices, among others. Through regular
press releases, IMPHIL may build its image and reputation to attract other
consultants, and consulting firms to join the organization.

IMPHIL’s website should also be updated regularly which can contain the
information mentioned to be made available in newspapers and/or
newsletters (publishable success stories, management consulting practices,
trends and upcoming activities). The website should offer vast array of
information and guidance that can assist the management consulting
community to stay competitive. If possible, the website can also be
developed to become interactive to be able to give a chance to clients and
prospective clients to inquire about the consulting firms and the available
services that they can offer. This website can link with DTI’s PhilTINS “one-
stop” system once it is fully operational to for potential domestic and foreign
clients to have access to management consulting service providers and
promote IMPHIL to non-members.

A professional development program can be developed by IMPHIL with

two objectives, one is to give quality training for management consultants and
their employees so as to upgrade standards of excellence in the practice of
the profession, and another objective is to promote IMPHIL among non-
member consulting firms who can also avail of the training and development
programs. IMPHIL’s member firms have proven experiences in organizing
conferences and conventions so this may not pose problems for IMPHIL,
fees may be charged to members and non-members. IMPHIL’s professional
development program should include workshops/seminars on new trends in
management consulting practices such as result-based practice, virtual
organizations, cross-discipline practice, boutique operations, brand
marketing, information technology applications, and other topics that will
build interests for members and non-member firms who are enjoined to

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attend. The extensive professional development program will assist in
attracting more members to IMPHIL as well as defining the standards, code of
ethics and higher level of assurance to industry’s clientele , thereby, raising
the industry’s image to both domestic and international environment. These
conferences, conventions and seminars can serve as a means to promote
IMPHIL as well as ensure a cooperative competition among the players in
the industry.

But for all of these activities to be implemented, IMPHIL would need to

form a secretariat to really work for the achievement of IMPHIL’s objectives.
IMPHIL officers cannot do the work on their own, there are a lot of things
that would need to be acted upon to help the industry become competitive.

IMPHIL needs to build tighter linkages with all stakeholders and industry
cluster in order to have a wider coverage for its program for achieving
excellence in management consulting. IMPHIL can forge stronger linkages
(through joint-sponsored programs and events) with important local
organizations especially those of non-traditional providers of management
consulting firms, suppliers, and customers. Some of these associations are
the Marketing Opinion and Research Society (MORES), Philippine Institute of
Certified Public Accountants (PICPA), Philippine Software Association (PSA),
Personnel Management Association of the Philippines (PMAP), Public
Relations Society of the Philippines, associations in the printing and
publishing industry, other professional organizations in engineering,
economics, statistics, environmental science as well as associations in the
field of printing and publishing, association of non-government organizations
and association of foundations in the Philippines and other relevant industry
associations based on services offered and markets served by players in the
management consulting industry. Cooperation and information sharing
between firms in the business advisory services, professional services and
management consulting industry should be initiated. This would bring about
not only creating a better image for management consultants and IMPHIL but
also develop new markets for the industry.

Likewise, establishing strong linkages with international associations like

those shown in Appendix H is necessary as trends towards globalization of
markets increase. IMPHIL can initiate attendance of representatives in
international conventions, conferences and symposia sponsored by these
associations to build networks for market development as well as update local
players with new trends in the global market.

Strengthening the domestic market. The industry is characterized by a

competitive environment where the supply exceeds the demand and there are
low barriers to entry. To have a well-developed domestic market there are
three important stakeholders who will play a role in the strengthening of the
domestic market: the customers, the providers of services and the suppliers.

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 The customer base need to be expanded. At present, there are
opportunities that can be developed in the domestic market among small and
medium sized firms which are not used to hiring consultants, large firms
which have preferential treatment for foreign consultants and government
and non-government organizations which have research and consultancy
needs in their projects but may not have access to available consulting firms
they can tap. Among small and medium sized firms, IMPHIL can spearhead
an aggressive awareness campaign to introduce the organization and its
member firms along with service capability to some associations of small and
medium sized firms like the Philippine Exporters’ Association (PHILEXPORT),
for example. The same campaign may be done to Chambers of Commerce
(Philippine, American, Chinese, Australia-New Zealand, European) and Non-
Government Organizations’ associations. Campaigns can be done through
provision of brochures which were already prepared by IMPHIL to these
associations. Government can also assist through DTI or DFA in representing
the industry to these associations or assisting in establishing linkages
between the associations. IMPHIL can also forge linkages with industry
associations like PCCI and the like. Presentation and promotion of services
among their member firms can be made to make more companies aware of
availability of local consultants who can offer the same quality of services as
their foreign counterparts as well as strengthen the position of the Philippine
management consulting firms locally and lessen the threat of new entrants.
Government, as an institution with significant share in the market of
consulting firms should give opportunities to consulting companies,
specifically those that can be accredited to provide quality services according
to their expertise, to be able to assist in building their track record in the
industry.

The providers of management consulting services, especially the small

and medium-sized players need to strengthen outsourcing capabilities to be
able to meet the diverse needs of clients and compete with large multi-
functional consulting firms. But at the same time, greater differentiation in
core competencies should be developed.

Joint ventures between foreign and local consulting firms should be

encouraged to foster technology transfer and training. There is a need for
consulting firms to strengthen technology through management tools. But
these ventures should be viewed as a long-term partnership for both parties.
The contractual agreement should clearly define responsibilites of each firm.

Important suppliers of human resources, information and technology

should likewise be developed. Academic institutions and professional
schools should be encouraged to offer electives in management consulting
services and practices(management services , for accountants) as well as
opportunities to conduct practicum training in consulting firms to develop

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awareness among future business leaders about the role that management
consulting play in the economy. This will create opportunities for acceptance
of management consulting in the future among these business leaders as an
important tool to assist management and not just another “expense or cost”
that a company would incur. In the Philippines, unlike in more developed
countries like US and Europe where consulting is a standard, expected
business practice, Filipino consulting firms, especially the small and medium-
sized firms are not used to getting consultants. Cooperation from
Information suppliers like the government agencies such as NSO, NSCB,
SEC, and DTI is needed. This is further explained in the next section of this
study concerning performance monitoring scheme. Technology suppliers
such as software vendors in the Philippines can assist the industry in
developing partnerships with consulting firms to develop branded solutions
especially for specialized services offered by management consulting firms.
This is can be similar to branded solutions developed by market research
firms. This is speicifcally applicable for management consulting firms with
differentiated core competencies. IMPHIL can assist in identifying these firms
with differentiated core competencies.

Expansion into the foreign market. With a limited domestic market,

The industry would have to find ways to enhance competitiveness and
expand market into foreign shores. This can be implemented through (1)
identification of players with extensive track record in foreign countries and
those who are committed towards expanding their market overseas; (2)
assist in developing capabilities for international market penetration of these
players; (3) monitor performance in foreign markets and continuously
provide information on market opportunities abroad.

In identifying the players in the industry with extensive foreign experience,

based on the profile of players in the industry, particularly IMPHIL members, it
can be gauged that many of the consulting firms who were able to be
successfully engaged in international projects or projects overseas are those
in the areas of development studies and environmental management,
engineering and technology consulting through projects with international
funding institutions, or partnerships/affiliation with foreign consulting
companies. These are the major areas seen where consulting firms can
possibly compete in foreign markets.

To assist in building capacities for international market penetration, these

players identified can be tapped to represent IMPHIL in international
symposia, conferences, sponsored by international consulting associations to
be able to network with possible partners, affiliates and clients. Alliances of
the established players with extensive foreign experience with other players
who have developed their capabilities well but have not had as extensive
opportunities as their counterparts can be a means to foster sharing of
information, capability building as well as development of specialists. These

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are cooperative strategies that may be attractive to organizations with limited
financial, technological and human resources to contend with. Alliances and
consortia among local consulting firms of various specializations should be
encouraged. These firms can complement each others capability and
expertise to compete with the international market needs’ for projects. They
are not formed to undertake a specific project , but exist as a pool of
resources available on demand. The lead firm explores markets in developed
or developing countries and identifies the consulting firm (or group of firms) in
the consortium best suited to provide the required services

Also, through its international affiliations, IMPHIL can facilitate global

collaboration among management consultants. Establishing and
strengthening a secretariat for IMPHIL would go along way to implement
these collaborative actions. This will build the electronic infrastructure to
facilitate formal and informal connections between Philippine members and
members of institutes in other countries. The level of association between
Philippine consultants and consultants in other countries will measure the
progress made on the issue.

Trade commissioners in foreign posts can benefit from informed,

immediate support in promoting the industry. The IMPHIL and government-
initiated agencies can examine the feasibility of a “secondment” progam that
would place experienced management consultants in selected number of
foreign posts for a specified period, say, for two-year terms. The countries
selected would be in which the Philippines has significant business
opportunities. The secondees would be involved in formulating and
chanelling specific opportunities to Philippine management consultants. The
secondees could also build relationships with local consulting firms and
contractors of large projects. Such relationships can provide valuable
intelligence about required service offerings in the global market.

Also with the ongoing, computerization efforts in the government, if these

are successfully implemented through the GISP, management consulting
industry can benefit with its access to better information and access to better
communication

Institutionalize the development of the management consulting

services sector. Governments and private Sector should recognize that
developing the local consulting profession is a long-term process of
institutional development. Based on the development of human resource,
information and technology. These can be done through the following:

• A team should be designated as the focal point with

responsibility in preparing and monitoring the strategy and plan
of action for developing the profession. This can be a
combination of representatives from the associations and DTI.

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 • Universities, professional societies, and national associations of
consultants should play a more active and effective role in
raising the professional standards and quality of performance of
the domestic profession. Formal linkages between professional
schools and the consulting industry should be established. This
practice is prevalent in other countries especially in the US
which paved the way for development of new management
tools and specialists.
• Participation of Philippine consulates as institutional marketing
arm of the industry in different countries. Consulates abroad
should engage in aggressive marketing efforts to market
services abroad and conduct follow-through on targeted
partners and clients. Targeted clients are those who may want
to conduct business in the Philippines and would need
consulting assistance or foreign companies who would want to
get the services of Filipino consultants/consulting firms.
• In management consulting, clustering can initially be done by
identifying clusters that can be grouped according to
classification of firms based on specialization. This enables the
industry to better identify specific trends and issues within the
cluster, and these may differ across the different classifications
of firms. Genuine interest and commitment from those
identified to work for competitiveness enhancement should
then be assured. These will become agents of change , they
are key agents who may be players in the industry, suppliers,
customers, who can attract the participation of key business and
government leaders. Key representatives from the public sector
should be enjoined in the cluster. Table 41 below shows
possible groupings according to areas of specialization.

Table 41. Possible groupings of stakeholders according to area of

specialization
Area of Specialization Stakeholders
Human Resource Institute of Management Consultants of the
Management/Training/ Philippines (IMPHIL)
Executive Recruitment Personnel Managers’ Association of the Philippines
(PMAP)
Department of Trade and Industry (DTI)
Department of Labor and Employment (DOLE)
Philippine Industrial Relations Society (PIRS)
Development Academy of the Philippines (DAP)
Printing and publishing industry associations
Conference/Convention/Training Centers/Hotels and
Restaurants
Colleges and universities
Staff Recruitment Agencies

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Financial Management Institute of Management Consultants of the
Philippines (IMPHIL)
Philippine Institute of Certified Public Accountants
(PICPA)
Bankers’ Association of the Philippines (BAP)
Department of Trade and Industry (DTI)
Department of Finance (DOF)/Department of Budget
Management (DBM)/Commission on Audit (COA)
Philippine Software Association (PSA)
Colleges and Universities
Printing and publishing industry associations
Tax consultants and auditors
Production/ Operations ISO consultants
Management Certificate International Phils., Inc.
Professional Engineers’ associations (Mechanical,
Electrical, Industrial)
Philippine Software Association (PSA)
Department of Trade and Industry (DTI)
Colleges and unievrsities
Printing and publishing industry associations
Marketing Management Institute of Management Consultants of the
Philippines (IMPHIL)
Marketing Opinion and Research Society (MORES)
Philippine Marketing Association (PMA)
Association of Marketing Educators (AME)
Philippine Software Association (PSA)
Department of Trade and Industry (DTI)
Colleges and universities
Printing and publishing industry associations
Television, Radio/Broadcasting industry
Development Studies and Institute of Management Consultants of the
Environmental Philippines (IMPHIL)
Management Environmental service providers
Non-Government Organizations’ associations
Association of Foundations in the Philippines
Philippine Software Association (PSA)
Department of Trade and Industry (DTI)
Research organizations
Colleges and Universities
Printing and publishing industry associations

10.2 Performance Monitoring Scheme

To properly monitor the performance of the industry , the following are the
key result areas that need to be addressed.

National Information database. Based on the data presented on the profile

of establishments and practicing consultants in the Philippines, it can be gauged
that one of the weaknesses of the industry is the weak database it has. There is

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lack of information to monitor the performance and contribution of the
management consulting service subsector to the economy.

In this aspect, there should be a close coordination between the information

centers of the National Statistics Office, Securities and Exchange Commission,
Department of Trade and Industry and IMPHIL, as a representative from the
industry sector to identify the needs of the industry in the performance of growth
and opportunities. Specifically, the following improvements can be made:

• through the government, the PSIC should be harmonized with the UN

CPC classification/definition to have a common framework by which
management consulting industry is monitored. Specifically, exclude the
activities of management holding companies in the PSIC definition
• through IMPHIL, regular surveys through e-mail can be conducted
among its members and possibly, other non-members to establish a
database that is necessary and useful in establishing specific
strategies that IMPHIL can take in addressing new issues and
challenges in the market. This should be done on a regular basis to
confront the changing market conditions and ensure competitiveness
of its members and the industry, in general. In other organizations like
FIDIC, for example, this is regularly done to determine emerging trends
in the market. The following are some of the suggested surveys that
can be conducted at different points in time:
o Survey on the amount/percentage share of sales generated by
each company
- classified by industry/sectors served
- classified by services rendered
- classified by source (domestic sales or export sales)
This will assist in identifying trends in the market and market
performance. It will also support any marketing activities
that can be initiated by IMPHIL to improve performance in the
domestic and foreign market.
o Survey on training needs. This will assist IMPHIL in the design
and implementation of a professional development program that
can assist capability building in the industry.
o Survey on professional designations and expertise of
consultants in the Philippines. This will assist IMPHIL in
determining outsourcing strategies especially for larger projects
where cooperative collaborations are formed to better compete
in the market.
o Survey on the extent by which information technology is used in
the companies. This will again assist IMPHIL in determining
information-technology related seminars that can be conducted
through the professional development program of IMPHIL.

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 Accreditation of Consultants. An accreditation system of management
consultants may be implemented with the assistance of the Department of Trade
and Industry, NEDA and IMPHIL to establish consultancy as a profession and
safeguard the quality of consultancy services in the Philippines.

An accreditation system of management consultants may be implemented

by DTI and IMPHIL to establish consultancy as a profession and to safeguard the
quality of consulting services delivered. It is necessary, that an appropriate
legislation , especially of similar measures like the National Consultancy Act may
be lobbied by IMPHIL and COFILCO for DTI to implement such accreditation.
Accreditation by specialization may provide proper categorization of consultants.
The Certified Management Consultant (CMC) designation on practitioners who
successfully complete its course of study and practical experience requirements
and adhere to uniform code of professional conduct can be given according to
area of expertise or specialization.

A tax incentive scheme for companies including small and medium sized
firms who will avail of consulting services from accredited consultants may
likewise be implemented through proper legislation in order to generate more
patronage for local consulting firms. This will create additional domestic demand
for the consulting profession.

It is also perceived as necessary to provide the accreditation system a

verification framework (through forms verified by third parties). The scheme
would work to expose consultants, local or foreign who are not qualified; not
allowed by immigration and labor laws to engage in consultancy; and expose
dummy corporate fronts of foreign consultants.

The accreditation scheme should work for on-line, simple, transparent and
reasonable accreditation standard as well as ethical standards.

COFILCO forwarded some proposals on this issue of accreditation standards

worthy of consideration:
• Management capability, office space, equipment and administration
support
• Resources such as hardware, software, vehicles, laboratory
equipment, etc.
• Manpower resources, regular staff, temporary staff, consultants, cadd
staff, support staff
• Key staff
• Completed projects
• Third party verification and audit of consultant’s accreditation
statements.
• Accreditation to be recommended by recognized accredited
organization

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11 Directory
A. Member Firms of the Institute of Management Consultants of the
Philippines
Asia Business Consultants (ABC)
rd
3 Floor, Basic Petroleum Building
Carlos Palanca Street, Legaspi Village, Makati City
Telephone Numbers 8100038/8100043
Fax Number 8164137
Associated Resources of Managemnet and
Development (ARMDEV)
1-C Corner Masunurin Street and Anonas Extension
Sikatuna Village, Quezon City
Telephone Numbers 9244821/4331431
Fax Number 4331088
AYC Consultants, Incorporated
th
14 Floor Sagittarius Building HV dela Costa Street,
Legaspi Village, Makati City
Telephone Number 8109606 to 10
Fax Number 8108007
Carlos Valdez & Company
Carlos valdez Building, 108 Aguirre Street
Legaspi Village, Makati City
Telephone Numbers 8925932/5278491
Fax Number: 5273538
J Cunanan & Company/PricewaterhouseCoopers
th
14 Floor Multinational Bancorporation Centre
6805 Ayala Avenue, Makati City
Telephone Numbers 8452728 to 29 local 445
Fax Numbers 8452806/8450354
Laya Manangahaya Salgado & Company
nd
22 Floor Antel 1000 Corporate Centre
139 Valero Street, Salecedo Village, makati City
Telephone Numbers 8189470/8938507
Fax Numbers 8166595/8941985/8166595
Leverage International Consultants, Incorporated
Suite 84 Legaspi Suite, 178 Salcedo Street
Legaspi Village, Makati City
Telephone Number 8101389
Fax Number 8101594
Cesar Virata and Associated, Incorporated
G/F Development Academy of the Philippines
San Miguel Avenue, Pasig City
Telephone Numbers 6312173/6335560
Fax Number 6312161
Cm technologies, incorporated
114 samapaguita Street , Valle Verde 2
Pasig City
Telephone Number 6310836
E-mail CMTECH@vasia.com
DTTI Consultancy, Phils, Incorporated
rd
3 Floor Don Jacinto building
Dela Rosa cornerSalcedo Streets
Legaspi Village, Makati City
Telephone Numbers 8170031 to 34
Fax Number 8160649
Economic Development Foundation
th
12 floor Tower II, Cityland 10
HV Dela Costa corner Valero Streets,
Salcedo Village, Makati City
Telephone Numbers 8100674/8100669
Fax Numbers : 8189269/8100833
SEA Consultants, Incorporated
nd
2 Floor Concorde Building A, Benavidez corner
Salcedo Street, Legaspi Village, Makati City
Telephone Number 8158790
Fax Number 8156587
SEARCA Consulting S ervices
SEAMEO Regional Center for Graduate Study and
Research in Agriculture
College, Laguna
Telephone Numbers 5362914/5362363 to 65
Fax Number 5362914
Sunrise Industries Development Incorporated
th
Suite 1113, 11 Floor National Life Building
Ayala Avenue, Makati City
Cellphone Number 09188285507
Pager Number 141722676
117
Website: http://www.leverage-
international.com
Mandala Agricultural development Corporation
(MADECOR)
Unit 302 Prestige Tower
Emerald Avenue, Ortigas Center, Pasig City
Telephone Number 6381600
Fax Number 6384185
Orient Integrated Development Consultants, Inc.
FSS Building 1, 89 Scout Castor Street
Quezon City
Telephone Number 4132187
Fax Number 4132326
Pacific Rim Innovation and Management Exponents
(PRIMEX)
502 Manila Luxury Condominium Pearl Drive
Pasig City
Telephone Number 6339052
Fax Number 6347340/6347339
e-mail Address: primex@primexinc.com.ph
Website: http://www.primexinc.com.ph
B. Partial list of Non-Member Management Consulancy Service Firms in
the Philippines
Traditional providers of management consulting services
Finance and Investment Management Consulting
Incuventure Asset Managers
Makati City
Telephone Number: 8999641
e-mail Address: etrade@info.com
Walden AB Ayala Management
22F 6750 Ayala Avenue Makati City
Telephone Number 8135253
Website:http://www.wiig.com/main/philippines.htm
Equity Managers Asia Inc.
Jollibee Plaza, Ortigas Center, Pasig City
Telephone Number 830200
e-mail Address: lindaya@equityasia.com
Development, Environmental and Policy Studies
Center for Empowerment and Resources
Sycip Gorres & Velayo Company
SGV Building 6758 Ayala Avenue, Makati City
Telephone Numbers 8910307/8910517
Fax Numbers 8174193/8190872
Urban Integrated Consultants
th
4 Floor Columbian Building
160 west Avenue, quezon City
Telephone Numbers 9285481/9297902
Fax Number 9325787
Ward Howellzmg
th
5 floor Athaneum Building
160 Alfaro Street Salcedo Village, Makati City
Telephone Number 8162466
Fax Number 8172543
Hambrecht and Quis Philippines
22F PCI Bank Tower II Makati Avenue cor. H.V De La Costa
Makati
Telephone Number 8195776
e-mail Address: www.jpmhq.com
CL Manabat & Co./ Deloitte Touche Tohmatsu
Penthouse Salamin Building 197 Salcedo Street
Legaspi Village, Makati City
Telephone Number 8120535
Fax Number 8105047
Website:
http://www.deloitteap.com/practices/prac_phil.html
ENR Consultants
118

2-A San Pablo Road, Phil-Am Homes, Quezon City
Telephone Number 4117337/9287775/9251641/
e-mail Address: cerd@wequest.com
Website: http://ww.philngo.com/cerd1.htm
Cest Inc.
th
10 Flr., Strata 200 Bldg., Emerald Ave., Ortigas
Center, Pasig City
Meganomics Specialists International Inc.
Suite 512 Pasda Mansion 77 Panay Avenue cor
Timog Avenue Quezon City
Telephone Number 3730618/ 4101355
e-mail Address: villegas@compass.com.ph.
meganomics@pacific.net
Website: http://meganomisc.com.ph
Human Resource Management
Center for Leadership and Change
G/F Hoffner Bldg., Ateneo de Mla. Loyola Hts.
Quezon City
Telephone Number 9207216
Guthrie Jensen Consultants
5/F Glass Tower Bldg., 115 Palanca Legaspi Village,
Makati City
Telephone Number 5161610
Website: guthrie_jensen.com.ph
Philips Associate Management Consultants
Website:http://phillipassociates.net/welcome.html
Impact of Consultancy Group
2F Comfoods Building, Sen Gil Puyat Avenue cor.
Chino Roces St. Makati City
Telephone Number: 8434071/ 8432167
http://www.philone.com.ph/~impact/profile.htm
Alba Romeo Management Consultants
7F Don Chua Lamco Building Alfaro St., Salcedo
Village, Makati City
Telephone Number: 8159086
e-mail Address: mahatma@edsamail.com.ph
John Clements Consultants
2F RCI Bldg., 105 Rada Street Legaspi Village
Telephone Number 8171650/ 8176730/ 8178949
e-mail Address: jccinc@johnclements.com
Amrop International
1704 Antel 2000 Corporate Center 121 Valero St.
nd
2 Flr., FSS Bldg., 89 Scout Casto Brgy. Laging Handa,
Q.C.
Louis Berger International Inc.
TM8910 Milelong Center, Amorsolo cor. Herrera Sts.
Telephone Number 81234556/8121646 to 49
e-mail Address: rhirsch@louisberger.com
Website: www.louisberger.com
Peakground Institute of Policy Research, Inc.
Tapulanga Street Espinos Village II
Bacolod City
Telephone Numbers (034) 29597 and (034) 7085173
Manila Number 7233043
Email Address: pgipri@bcd.weblinq.com
Website: http://www.wbi.ph/pgipri
Enterprise Development Group, Asia Pacific
402 Vicente Madrigal building
6793 Ayala Avenue, makati City, Philippines
Telephone Number 8922896
Fax Number 8922902
Email-Address ancilla@iconn.com.ph
Website: http://www.enterprisedevelop.com
Manila Execon Group
5F Maripola Bldg., 109 Perea St., Legaspi Village Mkt
Telephone Number 8942865
Integrative Learning International
Website: http://www.integrativelearning.com
Aedan Associates
6 Buencamino St. Alabang Zapote Road Muntinlupa
Telephone Number: 8074784
e-mail Address: solace@pacific.net.ph
Stream Training Consultancy
42 East Capital Dr., Bo. Kapitolyo, Pasig City
Telephone Number 6314807
e-mail Address: jihautea@info.com.ph
ProSearch
5301 Cristina Condominium 143 Herrera Legaspi Vill.
Telephone Number 8140243
Asia Partnership Phils. (APPI)
Website: http://asiapartenrs.net
119
Salcedo Village, Makati City
Telephone Number 8453463/ 8871620
e-mail Address: Amropmanila@pacific.net.ph
Website: www.saxbam.com/contact/philippines.htm
Watson Wyatt Phils.
Website:http://www.watsonwaytt.com
Specialized Services
Consultancy by Technicus Corp
7F Crown Plaza Bldg., North Reclamation Area
Mandaue City
Telephone Number 4120732
IMS Philippines
2F DPSI Business Center 210 N. Garcia St.
Telephone Number 8900111
Asia Pacific Projects Incorporated
8 St Peter street Cubao, quezon City
Telephone Numbers 7253209/7254372/ 4132892
Fax Numbers 8134781/4132892
E-Mail
Address: info@asiapacofocprojects.com
Website: http://www.asiapacificprojects.com
Wright Business & Management Consultancy
Rm 301 Sunrise Center 488 P. Ocampo Sr. Street
Malate, Manila
Telephone Number 5266291
e-mail Address: wbmc@l-manila.com.ph
Website:
www.webspawner.com/users/pezaconsultant
GMB Franchise Developers & Consultancy Firm
Website: http://wwwgmbfranservice.com.ph
CAPDP Consultancy Service
6F Casho Gonzales
Building, 101 Aguirre St.
Legaspi Village, Makati City
e-mail Address: cadp@mozcom.com
Website: http://www.cadp-sugar.com
Escaler & Co. Inc.
504 National Life Bldg., Ayala Ave., Makati City
Telephone Number 8187661/046-4140613
Motivation Asia Phils.
602 One Corp. Plaza 845 Pasay Rd. Makati
Telephone Number 8404061
Isis Research Ltd.
Telephone Number: 8931002/8924518
e-mail Address: Philippines@isisresearch.com
Website: http://www.isisresearch.com
Business Recovery and Turnaround, Inc (BRTI)
Suite 2105 Philippine Stock Exchange Centre
Tektite East Tower , Exchange Road Ortigas Center
Pasig City
Telephone Numbers 6340741 to 45/6340319
Fax Numbers 6340736/6348881
Email Address: rtd@brti.net
Website: http://www.brti.net
Solutions Inc.
1650 Penafrancia St., Santiago Village, Makati
Telephone Number 8978689/8902737/ 8970729/
8909078
Website:http://www.geocites.com/wallstreet/Exchang
e/3855
Asiatech Resource Management
Suite 315 National Life Building 6762 Ayala Avenue
Makati City 1200
Telephone Number: 81500585
TeamAsia, Incorporated
# 3 Lanuza Bay Southbay Garden
Sucat, Paranaque City
Telephone Numbers 8076370/ 5460908
Fax Numbers 8423308/ 5460914
E-mail Address: mahamlin@teamasia.com.ph
Website: http://www.teamasia.com.ph
Institute of Public Health Management
Unit 338 Eagle Court Condominium #26 Matalino
St., Central District Quezon City
Telephone Number: 4359254
e-mail Address: jphm@bigfoot.com
Website:http://www.iphm.org
120
Multi-functional Consulting Firms
IDP Consult Inc.
Website: http://www.intlpros.com
Neville Clarke Phils.
Suite No. 3004-C, PSE Center, East Tower,
Exchange Rd., Ortigas Center Pasig City
Ernst & Young Consulting
19F Tower 1 The Enterprise Center, 6766 Ayala
Avenue , Makati City
Telephone Number 8109741
General Management
Aizen Enterprises
Unit C-13 G/F Olympia Mansion 7912 Makati
Avenue., Makati
Telephone Number 8102597/ 5152912/ 8152940
Innovision Strategic Dev’t Consulting Group
Rm 205A Manila Midtown Hotel
Website:http://www.innovision.homestead.com.ph
RM Management Consulting
#6-D Matapat St., Diliman, Quezon City
Telephone Number 7259518
Non-Traditional Providers of Management Consulting Services
AC Nielsen (Pulse)
th
15 Floor, The Columbia Tower, Ortigas Ave.,
Greehnhills, Mandaluyong
Taylor Nelson Sofres Phils. (Frank Small and
Associates)
GF Republic Glass Bldg., 196 Salcedo corner
Aguirre Sts., Legaspi Village Makati City
Telephone Number 8181150
e-mail Address: Manila.office@ph.tnsofres.com
Website:
www.tnsofres.com/about/asiapacific/philippines
Trends-MBL
Kalayaaan Ave. Quezon City
Telephone Number 9253169/9253170/ 4358466/
e-mail Address: trendsdial@trends-mbl.com
Website: http://www.trends-mbl.com
Asia Research Organization
21F Jollibee Plaza Bldg., Emerald Avenue, Ortigas
Center, Pasig City
Telephone Number 63113511/ 6313454
e-mail Address agl@info.com.ph
/aglmr@edsamail.com.ph
DTTI Consultancy
3F Don Jacinto Bldg., Dela Rosa corner Salcedo
Sts. Legaspi Village, Makati City
Telephone Number 8174346/ 8170031 to 33
e-mail Address: DMD_CPA@VASIA.COM
SGV-Devt. Dimensions
3F SGV II 6738 Ayala Ave. Mkti City
Telephone Number 8910307
BSA Sales Management
#5 Bagtican Road, Pilar Village, Las Piñas City
Telephone Number 8015921
e-mail Address: bsandres@world.net.ph
CLRV Neo-Synergy
Telephone Number 9248896
e-mail Address: changrp@info.com.ph
FS & Associates
Republic Glass Bldg., Salcedo Village Makati City
Telephone Number 8181150
Research Phils-Unisearch Inc.
41F Gloria Bldg., 109 Aguirre Legaspi Vilage Makati
City
Telephone Number 8109057
PSRC-Research International
10F One Magnificent Vile Bldg., San Miguel Ave.,
Ortigas Center, Pasig City
Telephone Number 6384528/ 6384525
e-mail Address: psrcri@webquest.com
Market Research International Phils.
Telephone Number 9264427
121
Website: http://www.aglmr.com

122
Technology Consulting
Andersen Consulting/ Accenture
Telephone Number84101111
Website: www.arthurandersen.com
Ayala Systems Technology, Inc.
3F Ayala Life Bldg., 6786 Ayala Avenue, Makati
Telephone Number 8132494 to 2496
Website: www.astech.com.ph
Corporate Information Solutions
Telephone Number 599-33-01 to 14
Level II (515 Bldg., Meralco Cmpd Ortigas Ave.,
Pasig City
Iberpacific
9F Taipan Place, Emerald Avenue
Ortigas Center, Pasig City
Telephone Number: 6370957
Website: http://www.iberpacific.com
WeServSystems International
th
6 Flr. United Life Bldg., 837 A. Arnaiz Avenue,
Legaspi Vilalge, Makti City
Telephone Number 8124001/ 8121311/ 8121308
Website:http://www.fujitsu.com.ph/weserv.htm
Misnet
Unit 304 heart Towe 108 Calero Street, Salcedo
Village, Makati City
Telephone Number : 8673587
Website: www.com.ph/misnet
Business Intelligence
Control Risks Phils.
st
12F 1 e-bank Tower 8737 Paseo de Roxas 1259
Makati City
Website:
http://www.crg.com/offices/manila/manila.htm
Construction/Engineering Consulting
Asia Technicon Mgrs. & Cons
Suite 603, The PEAK 107 LP Leviste St., Salcedo
Vilalge Makati City
Telephone Number 8482947 to 49
e-mail Address: consult@asiatechnicon.com
Website:http://www.asiatechnicon.com
Constech Mgmt. Group
2F Belson House Bldg., 271 Edsa Mandaluyong
Telephone Number 7276620 to 27
SP Castro and Associates
Sutie 601 Globe III Condominium San Miguel
Avenue, Ortigas Center Pasig City
Telephone Number 6334277/ 6355763/
6375951 to 2
e-mail Address: spcastro@skyinet.net.
Website: http://www.cecophil.org/spca.htm
Asian Computer Group
rd
3 Flr. Republic Glass Bldg., 196 Salcedo Village.,
Makati City
Telephone Number 8125122
Code Red Consultancy
Website: http://www.code-red.co.uk/index.html
EDS International Phils.
W702 PSE Centre Exchange Rd. Ortigas Center
Pasig City
Telephone Number 6370433
IEWorks Inc.
14F Tower B Gold Loop Tower
Amber Avenue, Ortigas Center, Pasig City
Telephone Number: 6339013
Website: http://www.ieworks.com
James Martin & Co. Phils (Headstrong)
15F Urban Bank Plaza, Sen Gil Puyat corner
Chino Roces Avenue, Makati City
Telephone number: 8130861
Pinkerton Consulting Services
4F Thomas Jefferson Cultural Center 359 Sen Gil
Puyat Aveneu 1200 Makati City
Telephone Number 8993934/ 8959404
Cedco
Telephones: (032)253-9321 * 253-2679 * 253-2683 *
253-9319 * 253-9310
3rd Floor, GMT II Buiding, corner P. del Rosario and
Junquera Sts., Cebu City
Website: http://www.cecophil.org./cedco.htm
ProConsult Inc.
Penthouse Taft Office Center, 1996 Taft Avenue.
Pasay City
Telephone Number 8321533/ 8322110
e-mail Address: proconsult@pacific.net.ph
Website: http://www.cecophil.org/procon.htm
Rider Hunt Labor
5F Oppen Bldg., 349 Sen Gil. Puyat Avenue Makati
City
Telephone Number 8905686/ 8905728/ 8971686 to
87
e-mail Address: liacrorrh@pworld.net.ph
Website: http://www.riderhuntliacor.com
123
Schema Konsult Inc. Planning Resource and Operations Systems
7F JMT Corporate Condominium ADB Avenue 2/F Prudential Bank Bldg., Ortigas Ave. San Juan
Ortigas Center Pasig City Telephone Number 7211661
Telephone Number 63111691
e-mail Address: schema@info.com.ph
Website:http://www.cecophil.org/schema.htm

RN Ferrer & Associates Pacific Orient Consultants & Mgmt.

5/F Padilla Bldg., Emerald Ave., Ortigas Center 7484-A Dao St. SAV Makati
Telephone Number 6311541 Telephone Number 8908115
e-mail Addres pocmc@tri-isys.com

SFI MgmtCOnsultancy Complete listing of Engineering consultants can be

105 West Avenue Quezon City provided by:
Telephone Number 3711321 Council of Engineering Consultants of the
e-mail Address: sfmc@pacific.net.ph Philippines (CECOPHIL)
http://www.cecophil.org

124
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Association of Foundations Philippines. (2000). Donor Trends: A Resource Book

of Development Assistance in the Philippines. Manila.

Baum, W. and Kirmani, S. (1991). The Consulting Profession in Developing

Countries: A Working Paper. The World Bank.

Bureau of Export Trade Promotion-Department of Trade, Various articles

provided by Philippine Special Trade Representatives and Past Industry Studies
onProfessional Consulting Industry and Management Consulting Industry

Hoekman, B. (1999). Towards a More Balanced and Comprehensive Services

Agreement. Seattle: USA.

Kubr, M. ed. (1996). Management Consulting: A Guide to the Profession (3rd

edition). International Labour Organization. Geneva.

National Economic and Development Authority. ODA Pipeline by Donor from 1997-
2000.

Porter, M. (1990). Competitive Advantage of Nations.

Quinn, J.B. (Summer 2000). Sloan Management Review. Sumemr 2000.

Reimus, B. (1997). Knowledge sharing within management consulting firms.

http://www.kennedyinfo.com

Securities and Exchange Commission. (2000). Philippine Business Profiles

1999-2000: Top 7000 Corporations. Manila

SGV and Co. (1999). Doing Business in the Philippines. Manila.

Whichard, O. (2000). Measurement Classification, and reporting of Services

Activities:An International Perspective. Bureau of Economic Analysis;Washinton
DC.

http://www.filipinolinks.com/business/consultants.html (Web directory of Business

Consultants, December 9, 2000)

http://www.kennedyinfo.com/er/ekrgstud.html (Books on Management

Consulting Firms, November 30, 2000)

http://www.kennedyinfo.com/mc/cn50.html (50 Largest Management Consulting

Firms, November 30 2000)

125
http://www.adb.gov (Asian Development Bank)

http://www.neda.gov.ph (National economic and Development Authority)

http://www.dti.gov.ph (Department of Trade and Industry)

http://www.usatrade.gov (Country Commercial Guide, November 21 2000)

http://www.strategis.ic.ga (Candaian Consulting industry, November 21 2000)

http://www.itd.org (World Trade Organization, November 20 2000)

http://www.apmforum.com (Asia-Pacific Forum, November 20 2000)

http://www. philexport.com (Philippine Exporters Confederation, December 8

2000)

126
 ANNEX A-1 - ONGOING GOVERNMENT ICT PROJECTS
Project Title Description Proponent Duration Project Cost /

Agency/Office Funding Source

AGRICULTURE/AGRARIAN SECTOR

Agriculture InformationThis project will put Department of 4-5 years PhP1.520M

Network (Agrinet) together all agricultural- Agriculture (DA) (PhP800M 1st
related information year; PhP720M
generated by government succeeding years)
and non-government
organizations on
production, post-production
and marketing activities of
farmers and fishermen.
This will likewise involve the
setting up a wide area
network that will
interconnect the regional
field units (RFUs), bureaus,
attached agencies and
Research Outreach
Stations (ROS) of the
department.
Computerization of the This involves Land 13 years PhP3B
Land Titling System computerization of the Registration
processing and issuance of Authority (LRA)
land titles to improve the
land management record
system in the country.
COMMUNICATION SECTOR
National Telephone Establishment of 13,728 DOTC/CPMO- FRF 144,674,252
Program (NTP) Tranche digital telephone lines NTP 1-2 or PhP655.474
I-2, ROT Stage II covering fourteen (14) (FRF4.5=PhP1)
municipalities in Regions
VI, VII & VIII.
National Telephone Establishment of 32,800 DOTC-CPMO US$43M or
Program (NTP) Tranche digital telephone lines to 31 PhP1,443.136
1-3 cities/municipalities in ($1=PhP28)
regions IX, X, XI & XII
including high density 140
Mb/s backbone network.
National Telephone Project involves the DOTC US$123.00M or
Program (NTP), 1-3 provision of a total of PhP4.92B
Phase 4 45,000 telephone lines to ($1=PhP40)
80 localities surrounding
the NTP tranche 1-3
backbone in Mindanao
areas and the
establishment of a digital
transmission network,
thereby extending to

127
 underserved areas.
Regional Establishment and DOTC-CPMO Y 3,803.00 or
Telecommunications expansion of 6,200 digital PhP242.10
Development Project telephone lines to 30 (PhP1=Y5)
(RTDP) Phase C localities in regions I&II
including establishment of
backbone network to loop
the RTDP communication
network in CAR, Region I &
II.
Telecoms Component of AGILE is an action-oriented DOTC/NTC 1998-present US$1.0M of
Accelerating Growth, activity to support economic US$27.0M or
Investment and policy liberalization and Php40.0M of
Liberalization with enhance competition in the PhP1.08B
Equity (AGILE) Project Philippines. It will ($1=PhP40)
restructure and consolidate
the USAID/Manila approach
to improve the Philippine
economic policy
environment.
Data Communications Individual Expert Dispatch DOTC-TTI August 1997-
Engineering March 2000
Advanced Improved Technical and DOTC-TTI 1998-2002
Telecommunications Technological
Outside Plant Education/Training for 16
Technology – Fiber people.
Optics
DOST Bicutan Fiber This project is an Department of 2 years P8,625,400 DOST
Optic Backbone project FDDI/Switched Ethernet Science and Fund
backbone. This backbone Technology
is a 100Mbps Fiber (DOST)
Distributed Data Interface
(FDDI) network, a high
performance fiber optic
timed token ring LAN
running at 100Mbps over
distances up to 200Kms
with up to 1000 stations
connected, that connects a
ring of thirteen Switched
Ethernet hubs operating at
10Mbps. This electronic
backbone is expected to
improve communications
within the DOST Bicutan
campus, provide faster
access to S & T information
and support interactive
applications such as video-
conferencing. The network
will provide dedicated high-
speed and highly reliable
connections among
agencies in Bicutan.
Strengthening DOST- Nov. 1998- PhP9.9M
Information Networking PCASTRD thru present

128
in Catanduanes- a Catanduanes
GISTNET Pilot Project, State College
Phase II: Setting-up a
Fiber Optic System Loop
in the Mun. of Virac
Connecting People and The project aims to develop DOST-CARAGA PhP14.0M
Organizations for Rural and pilot-test an information
Dev’t. Through Multi- and communications
Purpose Telecenters in system in rural
Selected Barangays communities.
Computer Assistance to The project aims to develop DOST-CARAGA PhP1.0M
Selected Schools in and pilot-test an information
CARAGA and communications
system in rural
communities.
Establishment of an The project aims to provide DOST II 1997-present PhP0.65M
Internet Service Provider connectivity services to the
in the Province of Nueva provice
Vizcaya
Science and Technology The project has established DOST XI PhP3.0M
Information Network and a PSTC-based rural
Technical Services telecom backbone for
(STINTS) sectors that do not have
Internet access with Y2K
awareness and information
technology appreciation
activities on the first phase.
EDUCATION SECTOR
Upgrading the IT The project aims to DOST-SEI 1999-present PhP1.17M
infrastructure of the upgrade the IT facilities of
Science Education SEI for Y2K compliance as
Network for Year 2000 provided for by the law.
and beyond
Strengthening of SEI The project aims to DOST-SEI 1999-present PhP0.71M
Electronic Linkages strengthen and improve the
through the connectivity of SEI to the
Establishment of an different network institutions
Institutional Internet and to the Internet.
Backbone
Establishing a Philippine The project aims to collect DOST-SEI 1995-present PhP0.34M
Database in Science and systematize data on
Education science education through
electronic networking of
data such as thesis,
dissertations, publications
and other research
materials. It will put up and
develop structures that
would allow said
information or data to be
stored as databases and
accessed by different
users. A basic feature is to
establish linkages among
concerned institutions via

129
 computers.
Development of The project aims to develop DOST-SEI Started 1999 PhP0.16M
Database for S&T databases that will update
Manpower and Science students, teachers,
Culture and researchers, policy
Strengthening decision-makers, and other
Institutional Capabilities interested individuals on
current and future
development in S&T
education. Several data
from the different SEI
divisions were identified
and will be encoded into the
databases to be developed
which will be transferred
eventually to the SEI
website.
Mobile Information The project aims to develop DOST-CARAGA PhP5.92M
Technology Classroom an information culture and a
technology-literate public
preparatory to
modernization. It promotes
information technology
awareness through hands-
on computer activities. The
MITC is an airconditioned
bus equipped with the latest
in education technology
facilities and interactive
instructional/learning
materials in
science/mathematics.
Teacher facilitators were
trained to man the MITC.
Establishment of a The project’s aim is to put DOST II 1997-present PhP0.24M
Computer Center at up a computer center in the
Isabela State University northern part of Isabela with
the objective of
increasing/improving
computer literacy of
elementary and secondary
public school teachers.
Modems are provided, thus,
the center also serves as
an Internet workstation.
Establishment of a The project’s aim is to put DOST II 1997-present PhP0.23M
Computer Center at up a computer center in
Nueva Vizcaya General Nueva Vizcaya with the
Comprehensive High objective of
School increasing/improving
computer literacy of
elementary and secondary
public school teachers.
Modems are provided, thus,
the center also serves as
an Internet workstation.

130
DOST-CIT Basic The project aims to provide DOST VII & CIT 1995-present PhP10.0M
Multimedia Training and a venue to train IT
Development Center professionals in multimedia
production techniques in
order to develop a pool of
multimedia experts that will
lure foreign investors in the
IT to invest in the
Philippines. The center will
also provide a venue for the
development of local
multimedia products.
DOST-CIT Computer The training center serves DOST VII & CIT 1994-present PhP2.5M
Software Training and as a venue to promote the
Development Center development of the IT
industry in the region and to
enhance the skills of IT
graduates and
professionals in software
development.
Upgrading To enhance the existing UPLB PhP281.2 M
Communication and capability of the UPLB in (foreign cost)
Information Technology communication and
for Education and information technology in its
Sustainable Agro- vision of making significant
Industrial Development contributions to education
and sustainable, agro-
industrial development in
the Philippines and
surrounding region. This
entails upgrading of
communication and
information technology
hardware. A minor
component of the
requested grant aid will be
building renovation to
accommodate staff and
facilities to be displaced by
the addition of new
equipment.
FINANCE SECTOR
Budget Execution and Strengthen DBM’s DBM 5 years PhP400M
Accountability Tracking expenditure management
(BEAT) System capability; streamline
budget release procedures
and improve front-line
service; improve budget
administration and
accountability; and update
budget analysis and
decision making.
Government Purchases Is a computer based price Commission on Started 1997
Information System monitoring system Audit (COA) (for expansion)
(GPIS) principally intended to
facilitate government

131
 procurement and
discourage overpricing.
GPIS basic concept is built
on the thesis that
procurement is at the same
time an economic activity
and an administrative
process.
Physical Assets Formulate Physical Assets DBM 1 ½ year
Management and Standards and Guidelines;
Information System install Physical Assets
(PAMIS) Administration System;
provide a computerized
Agency Physical Assets
Monitoring System; and
develop and install Agency
Module on: Inventory
Management, Maintenance
Management and Executive
Information System.
GSIS Computerization Phase I (1996) project aims Government 4 years (1999-
Project to establish a wide area Service 2002)
network (WAN) connecting Insurance
GSIS’s 27 branches System (GSIS)
nationwide and to develop
and implement the
Membership Services and
Information System.
Business Recovery Multi-million project aims to Social Security 5 years (1997- PhP179.2M (Cost
Center “ensure nationwide System (SSS) 2002) for succeeding
availability of SSS’ years is subject to
Information Systems should changes)
the Main Data Center
and/or any of its regional
branch hub data centers
become inoperative” due to
disasters.
GOVERNANCE SECTOR
Advisory Network for the To establish electronic NEDA/OP PhP8M
Government Executive linkages among the
and Legislature executive and legislative
(ANGEL) offices involved in
Legislative-Executive
Development Advisory
Council (LEDAC).
NEDA Information To improve development NEDA PhP63.6M
Network Project (NINP) planning, investment
programming and project
monitoring activities in
support of the Medium
Term Philippine
Development Plan
(MTPDP) and to a large
extent, IT21 through the
use of IT resources. The
project is divided into three

132
 (3) major components: 1)
Development and
Institutionalization of
Mission-Critical Information
Systems; 2) Establishment
of IT Resources (hardware
and software)
Infrastructure; and 3) IT
Manpower Capability
Building.
Government Information To formulate an Integrated NEDA PhP3.4M DOST
Systems Plan (GISP) Government Information Fund
Project Systems Strategic Plan for
the medium-term which will
be called the GISP. The
GISP will set the vision and
framework for
computerization efforts in
government over the next
5-6 years. It aims to
provide for seamless and
more efficient electronic
governance, consistent with
the goals and objectives of
Angat Pinoy 2004 and the
National Information
Technology Plan for the
21st Century (IT21).
Data and Information The project seeks to create PIDS 3 years 1998- PhP7.7M
Resource Program in a user-friendly economic present
Support of Policy database system (EDS) to
Research and Decision store and maintain
Making databases from various
sources. It is intended to
facilitate networking among
government and private
sector institutions through
Data and Information
Resource Program (DIRP).
With the project, it is
envisioned that
policymakers and
researchers will enjoy
easier access to
international databases as
well as the regular
Philippine data series.
LABOR SECTOR
DOLE Computerization Involves the establishment Department of 3 years (1997- PhP100M
Project of a wide area network that Labor and 2000)
will link all DOLE offices Employment
and the creation of several (DOLE)
modules that will run on the
network. Also included is
the development of a Labor
Market Information System

133
 (LMIS).
MILITARY SECTOR
PRC Marine Officers The project aims to PRC PhP15.8M
Licensing and accomplish: 1) Online
Transaction Processing and
Certification System and
Networking Project faster service completion
time; and 2) Better and
Improved Quality of
Products and Services.
The project intends to
benefit not only the marine
professionals but also the
other professional groups
under the supervision and
jurisdiction of the
Commission. The
networking system that will
be establish shall ensure a
smooth and efficient
communication between
and among the systems
currently existing and being
maintained by the
Commission.
SCIENCE AND TECHNOLOGY SECTOR
Strengthening/ The project aims to develop DOST-FNRI 1998-present PhP2.54M
Upgrading of FNRI a specialized library to meet
Library Information the research information
Database needs of policy-makers,
researchers and other
nutrition workers; to
promote and coordinate the
development of the libraries
in the field through
trainings/seminars and
conferences; encourage the
exchange of food and
nutrition information within
the country, and to maintain
links with national and
international organizations
engaged in food and
nutrition services.
Upgrading of FNRI IT The objectives of the DOST-FNRI 1998-present PhP2.10M
Facilities project are: To improve and
standardize the
computerization in the
Institute including both
hardware and software; to
adopt and make use of the
new trends in software and
hardware technology ; to
support DOST’s and the
government’s program of
using IT to improve
government processes; and

134
 to expand the institutes
network and improve
connection to the internet to
prepare the Institute to e-
commerce.
Software on Energy The project aims to develop DOST-FNRI Started 1999 PhP0.22M
Equivalent a user-friendly computer
software which shows the
estimated amount of energy
to burn off calories from
some food items in excess
of requirement and to serve
as a guide to implement
control of maintenance
program.
Technology Delivery The project aims to develop DOST-FPRDI Started 1994 PhP0.50M
Information and Referral a database on technology
System transfer activities of the
institute and other related
information. Activities
included are: technology
piloting and
commercialization,
technical
assistance/consultation and
advisory services, trainings
conducted, socio-
economics, and technology
assessment.
FPRDI Publication This project involves DOST-FPRDI Started 1995 PhP0.05M
Abstract Information development of a database
System on abstract of journals,
manuals, books, articles
and related literature
published by FPRDI.
Market Information This is a database on DOST-FPRDI Started 1997 PhP0.10M
Generation for FPRDI market information for
FPRDI technologies.
Philippine Trees This is a database DOST-FPRDI Started 1996 PhP0.10M
Information System management system on the
properties and
characteristics of Philippine
trees which have been
studied in the institute.
These properties include:
anatomical, physical,
chemical and mechanical
properties.
Bamboo Information This is a database DOST-FPRDI Started 1998 PhP0.05M
System management system on the
anatomical, physical,
chemical, and mechanical
properties and
characteristics of bamboo
which have been studied in
the institute.

135
Rattan Information This is a database DOST-FPRDI 1998-present PhP0.05M
System management system on the
anatomical, physical,
chemical, and mechanical
properties and
characteristics of rattan
which have been studied in
the institute.
Metalworking Industry The project involves DOST-MIRDC 1999-2004 PhP0.52M
Information Database gathering of detailed
information on the
metalworking industry,
specifically the general
profile of the firms which
include plant capacity,
product lines, number of
workers, equipment and
machinery’s capacity and
precision and types of
metal working processes
employed.
Supplemental Support The project aims to develop DOST- PhP4.5M
to the Strengthening of manpower capabilities in PCASTRD thru
IT Capabilities in networking and to catalyze Catanduanes
Catanduanes R&D activities in the area. It State College
also aims to improve
access to information by
residents, thereby
expanding their
opportunities for
accelerating economic and
social growth.
Algebraic Algorithms for The project focuses on DOST- PhP0.20M
Certain CAD/CAM designing new efficient and PCASTRD thru
Problems infallible algebraic methods UPD-CS
for certain problems in
CAD/CAM, particularly
those related to rational
parametric surfaces.
Mango Information MIN is a world wide web- DOST- Started in 1996 PhP19.8M
Network (MIN) based information service, PCASTRD
as well as an interactive
system geared to expedite
the formation of strategic
business alliances among
small and medium scale
(SMEs) and other
stakeholders. Six services
were made available and
accessible through the MIN
website.
Development of The project involves the DOST-PCHRD 1998-present Php0.50M
Specialty Database and creation of the e-Health
Internet Resources on component site on
Medicinal Plants medicinal plants.
Information on medicinal

136
 plants will be gathered and
processed in addition to
what is currently available
in HERDIN database. The
resulting database shall
contain information on
research , researchers,
research organizations,
market and business
information.
Development of The project aims to develop DOST-PCHRD Started in 1996 PhP0.38M
Specialty Database , a one-stop shop information
CD-ROM, and Internet resource on malaria. At
Resources on Malaria present, full-text documents
are being scanned into a
Hypertext Markup
Language (HTML) format.
The website that will be
developed for this project
will contain articles in HTML
format and will contain
articles, graphics, profiles,
statistics, and other
relevant information about
malaria.
Establishing a National The project aims to harness DOST-PCIERD Started in 1999 PhP6.93M
Engineering Information I.T. in advancing and
Systems and Services promoting the level of
(NEISS) in the learning, awareness and
Philippines productivity of engineers,
students, faculty,
researchers, and others
involved in research and
development. Extending
support to the nineteen (19)
engineering network
schools throughout the
country, the project
provides access to
Engineering Information
through the World Wide
Web.
Support Operations: The project provides for the DOST-PTRI 1998-present PhP1.92M
Information Services development of effective
information systems for
efficient delivery of relevant
and timely information that
will assist the textiles and
garment industries to be on
top of new textiles
advances and
development. Through the
systematic collection,
organization, storage and
retrieval of textiles and
textiles related information

137
 materials for the
development and
improvement of the PTRI
Technical Library Service, it
will assist the researcher in
the conduct of their
research activities.
Textile Information The dissemination of up-to- DOST-PTRI 1999-present PhP2.19M
Management and date information on the
Awareness Service textile processes, raw
materials, products
technology, and
developments and fashion
trends will continuously
help the textile and garment
manufacturers in improving
the quality of their
production.
Information Packaging The project involves the DOST-STII (under agency
production of regular STII budget)
publication, The Philippine
Journal of Science in
electronic version.
Establishment of ECOTECH LINK is a meta- DOST-STII (under agency
Philippine Database in database or organized and budget)
Science Education exhaustive pointer
(ECOTECH LINK) database that includes brief
descriptions of different
organizations carrying
technology and economic
information and links to
other groups carrying
related information.
S&T Info Web The S&T Info Web is a DOST-STII (under agency
virtual system which budget)
connects the institute to the
entire DOST system and to
the rest of the world.
Created in 1997 and made
available on-line in 1998,
the S&T Info Web is home
to ten databases, six
publications and eight
home pages. As of July
1999, the S&T Web has
been accessed 206,166
times by various internet
searchers and surfers.
Establishment of This project is conceived to DOST II Started 1999 PhP0.10M
Cagayan Valley provide the public relevant
Information Network and updated information
about Region II
Operation of the The project aims to DOST VII 1998-2004 PhP12.0M
Regional Metals and establish a center for the
Engineering Service production of highly
Centers precisioned metal products

138
 using CNC technologies.
Establishment of Cebu The project aims to provide DOST VII 1999-2004 PhP2.0M
Design Engineering a center for the
Center development of machine
design engineers and
product design capabilities
using CAD/CAM/CAE
technologies.
Data Acquisition The project aims to provide DOST VII 1996-present PhP1.25M
Training and a center which will develop
Development Center local capabilities in
CITE, San Jose, automated manufacturing
Talamban, Cebu for enhancing product
quality and productivity of
SMEs in Central Visayas
TOURISM SECTOR
DFA Machine Readable The project aims to Department of 10 years P2 Billion Under
Passports and Visas streamline and modernize Foreign Affairs BOT scheme
(MRP/V) Project the issuance process, (DFA)
introduce security features
in passports and visas and
ensure compliance with the
international standards on
travel documents. The
system will also create a
database where all
applicant information will be
stored for easy access, and
feature an interface that will
allow the department to
streamline verification
procedures with other
government agencies.
TRADE SECTOR
Philippine Trade and A locally funded project, Department of 1999- PhP18.9M
Investment Network PhilTINS is a computerized Trade and Preparatory
System (PhilTINS) “one-stop system” linked to Industry 2000-System
DTI’s regional and (DTI/BETP) Development
overseas offices and trade
associations for the storage
and retrieval of timely
information on trade and
investment. This central
facility will lessen the man-
hours needed for research
and make DTI services
more accessible to the
public, boosting eventually
exports and investment.
TRANSPORTATION SECTOR
LTO Information The project is in line with LTO/DOTC 10 years US$49.7B or
Technology (Build-Own- the IT21 which calls for PhP1.988Trillion
Operate) Project intensive diffusion and use ($1=PhP40)
of IT in government
operations. The project

139
 involves the development,
operation and maintenance
of an integrated IT system
by way of the BOO scheme
over a concession period of
10 years in accordance with
R.A. 7718, the Amended
BOT Law. The project will
interconnect LTO's more
than 200 offices nationwide,
enable on-line transaction
processing and integrate
critical processes.

Source:http://www.neda.gov.ph

140
 ANNEX A-2 - PROPOSED GOVERNMENT ICT PROJECTS
AGRICULTURE/AGRARIAN SECTOR
Nationwide The project supports the DA/NCC Four PhP2.9B
Information implementation of RA 8435 years
Network for the which is known as the
Department of Agriculture and Fisheries
Agriculture Modernization Act (AFMA)
of the DA. The goal is to
make available to the
people the basic
agricultural data or
community information in
the country.

The project is composed of

three areas of endeavor,
namely: information
systems/data requirements,
connectivity requirements
and the organizational
requirements.

COMMUNICATION SECTOR

Computerization Involves local area House of 1 year PhP75 -

Program networking of offices as Represe PhP80M
well as upgrading of ntatives
existing PCs and eventual
linkage to the Internet
(including establishment of
a web page).
Creation of This project is geared NCC Four PhP250M
Regional towards the eventual years
Information interconnection and
Resource Centers mainstreaming of all the
(RIRC) local government units
Nationwide (LGUs) to the existing
internet technology. It is
presented in three phases
to maximize the existing
technologies using the most
efficient and effective
strategies. The first phase
will include selected
provinces and cities with
existing ISP connections;
the second phase include
all remaining provinces and
cities and adopting a
mixed-technology approach

141
 and the last phase will
involve all municipalities
and adopting a more varied
technology mix as the
geographical location will
require.
Breaking This project is composed of NCC
Geographical five (5) modules each can
Barriers and be implemented
Enhancing Local individually. However, it
Governance would be best to implement
through all these 5 projects to
Information selected local government
Technology (IT) units for easy monitoring
and assessment of its
possible contribution to the
overall economic status of
the chosen LGU.

This proposal will use

RPWeb as its backbone.
The essence of
development is focused on
the interconnection among
LGUs and NGAs. However,
to fully support operation,
NCC proposes to supply
the required infrastructure,
which is composed of
data/information, manpower
requirement, policies and
plans.

EDUCATION SECTOR

Computer The proposed plan of the CHED/NC Three PhP1.56B

Networking of Philippine Association of C years
State Colleges State Universities and
and Universities Colleges (PASUC) is to
interconnect the 109 State
Universities and Colleges
(SUC). The project aims to
interconnect its operations
with the support of
computer networks, Local
Area Network (LAN) and
Wide Area Network (WAN).
Every institution will have a
basic LAN, which will be
installed, in the library to
automate information
transaction and to provide

142
 facility for communication
locally to improve the
administration in the
institutions. These will be
interconnected to provide
regional and nationwide
area networks. Connectivity
with the INTERNET will be
incorporated in the system
so that information can be
shared by all SUCs and
provide vital information to
major agents of progress,
both local and foreign.
Equipment for the The project is for the pre- DOST- PhP1.12M
Mobile production of the MITC SEI
Information units. Equipment/facility will
Technology be purchased as basis for
Classroom the measurement
dimensions of computer
tables, storage facilities,
notebook computers,
multimedia projector ,
projector screen, and
generator in the three (3)
MITC units.
Development and The project aims to provide DOST- PhP1.12M
Replication of 110 S&T-oriented high SEI
Computer-based schools and RSTCs with
Teaching (CBT) computer-based teaching
Modules on modules on selected topics
Selected Topics in in biology, chemistry,
Biology, mathematics and physics.
Chemistry,
Mathematics and
Physics
Operation of The project is aimed at DOST VII PhP4.0M
Mobile IT Literacy providing pupils and
Program students from remote areas
access to computers.
IT Training The project aims to DOST VII
Program for the introduce a program that
Disabled and will provide opportunities for
Vulnerable the disabled and
vulnerable.

GOVERNANCE SECTOR

Cooperation The project was established DBM Cdn$265T

Agreement: DBM to improve the systems that
Systems support the delivery and
Development services of programs under
Support DBM’s Mandate. One of the
(proposed
services provided to

143
Support services provided to through
government agencies by CIDA
DBM is procurement, PTTAF)
through the Bureau of
Procurement Services
Sub Project:
(BPS).
Procurement
System Design
Project

A SubProject grant will

provide the services of
experts who will conduct a
policy review and
assessment of the
Philippines as a Regional
Center for Shared Services.
Enhancement of The project is proposed to DOST VII PhP0.65M
DOST VII Intranet improve Region VII’s
System existing networking
infrastructure to be able to
render better quality service
to its clientele.
Improvement of This project aims to NCC PhP60.0M
Poverty develop an inter-agency
Alleviation thru integrated monitoring and
Speedy Access of management information
Modern Age system that will harmonize
Services & the mandate, plans and
Assistance (IPA- programs of the different
SA-MASA) offices task to alleviate the
poverty condition of the
country. This system be the
vehicle to inform on the
different projects being
undertaken by the different
line and attached agencies.
G-Wish The Project is a nationwide NCC Three PhP580.5
infrastructure envisioned to years M
support the decentralization
of operations of the
government and to share
information between and
among government
agencies and the public. It
is made up of Information
Providers, Public
Information Service Points
and government field units
interconnected by a
common nationwide
network. It consists of
several network hubs
composed of hardware and
software devices containing
multiple independent but

144
 connected modules if the
network and
internetworking equipment.
These will be located in the
different regions and
provinces.
Cooperation The project aims to improve NSCB Cdn$115T
Agreement: PSS the capability of the five
Service statistical agencies under
Improvement and PSS in data analysis and
Data Accessibility report writing. The five
(proposed
Program statistical agencies were
through
the: NSCB, NSO, SRTC,
PTTAF)
BAS and BLES.

Sub Project: PSS

Training on Data
Analysis and
Report Writing
Civil Registry CRS Project covers the National 84 mos. PhP318.11
System (CRS) development of an Statistics M
Improvement Information Technology Office
Project (IT) Solution for the Civil (NSO)
Registry System through a
Build-Transfer-Operate
(BTO) acquisition scheme
as provided for by RA No.
(subject
7718 (BOT Law) that aims
to
to: (a) enhance and
Malacan
improve public service
ang’s
delivery; (b) efficiently approval)
organize, manage and
maintain a complete and
accurate database of civil
registry documents and
information; (c) overcome
attempts on falsification and
fabrication of civil registry
documents; (d) enhance
the computing capability of
the NSO; and (e) provide
for the establishment and
perpetuation of a unique
individual-referencing
Population Reference
Number (PRN).

LABOR SECTOR

Pinoy Watch “Pinoy Watch” is a NCC One Year PhP10.0M

database of all Filipinos
working abroad. This
project will integrate and

145
 harmonize the databases
created by similar agencies
and non- government
organizations. The
database will capture all
Filipinos who leave with a
working permit as well as
those with a tourist visa
permit.

MILITARY SECTOR

Automated Project aims to develop and National PhP87.4M

Fingerprint operationalize a state-of- Bureau
Identification the-art, fully-scalable of
System Project Automated Fingerprint Investigat
Identification System (AFIS) ion (NBI)
solution that will have the
following features: a)
reliable, user-friendly,
flexible, modular; b) high
degree of accuracy; c)
combines high quality
image-scanning with fast
image processing; d)
possess the capability to
interface with other AFIS or
forensic systems; and e)
successful worldwide track
record, e.g. Federal Bureau
of Investigation.

SCIENCE AND TECHNOLOGY SECTOR

Design and This project aims to DOST- PhP3.96M

Development of a develop a prototype of a ASTI
Standalone standalone MPEG audio
MPEG Audio decoder and its supporting
Decoder hardware and software
from the host PC side. In
pursuit of this goal,
research on modem
perceptual audio encoding
techniques will be done and
standard audio encoding
and decoding algorithms
will be implemented on
embedded hardware.
Asynchronous ATM is a technology that DOST- PhP3.96M
Transfer Mode will have a significant ASTI
(ATM) Project impact in the areas of

146
 networking, data
communications, and
telecommunications. It has
the potential to hasten the
convergence of data, voice,
and video into a unified
transport
mechanism/protocol.
Establishment of The project aims to DOST VII PhP50.0M
IT Zone Park in establish an IT park where
the Central local and foreign IT
Visayas in companies invest in IT
Cooperation with industry and maybe jointly
Local Export Zone undertake IT innovations of
developing new products
and services.

TRADE SECTOR

Virtual Centers for A component of the DOSTs DOST- 4 years

Technology project COMPETE ASTI
Innovation (Comprehensive Program
(VCTIs) to Enhance Technology UP-Dept.
Enterprises), the of
establishment of VCTIs was Electronic
proposed with the idea of s and
giving small and medium- Elect.
sized companies (SMEs) in Eng.
the country the opportunity
to develop a competitive
advantage in export
markets.

Source:http://www.neda.gov.ph

147
 Appendix D
Government Information Systems Plan

MALACAÑANGMANILA

BY THE PRESIDENT

EXECUTIVE ORDER NO. 265

APPROVING AND ADOPTING THE GOVERNMENT INFORMATION SYSTEMS PLAN (GISP) AS

FRAMEWORK AND GUIDE FOR ALL COMPUTERIZATION EFFORTS IN GOVERNMENT

WHEREAS, the government is committed to carry out, in pursuance of

“Angat Pinoy 2004”, or the Medium-Term Philippine Development Plan, 1999-
2004, wide-ranging administrative reforms to enhance government efficiency and
effectiveness in government operations and in the delivery of basic services to
the public;

WHEREAS, these reforms are being pursued particularly in fiscal and

financial management, procurement, education and manpower development,
personnel welfare, organizational effectiveness, and service delivery;

WHEREAS, the wider use and application of information and

communications technology offer tremendous opportunities for government to
ensure the success of these reforms;

WHEREAS, the National Information Technology Council (NITC), the

policy advisory body on information and communications technology in the
country, has formulated, in close consultation with concerned government
agencies, the private sector, local government units, academe, and members of
Congress, and accordingly endorsed a government information systems plan that
will serve as blueprint for the computerization of vital government operations and
key front-line services for more effective governance;

WHEREAS, the NITC and the Electronic Commerce Promotion Council,

created pursuant to Executive Order 468, dated 23 February 1998, have been
merged into the Information Technology and Electronic Commerce Council
(ITECC);

NOW , THEREFORE, I, JOSEPH EJERCITO ESTRADA, President of the

Philippines, by virtue of the powers vested in me by law, do hereby order as
follows:

Section 1. Approval of the GISP. The Government Information Systems

Plan (GISP), also to be known as “Philippine Government Online” hereto

148
attached, is hereby approved and adopted as framework and guide for the
computerization of key frontline and common services and operations of the
government to enhance overall governance and improve the efficiency and
effectiveness of the bureaucracy.

Section 2. GISP Implementation. To ensure the full and effective

implementation of the GISP, all government agencies and instrumentalities,
including local government units, shall align their respective computerization
projects with the priorities identified in the GISP. The ITECC shall prepare a
consolidated annual program of expenditures for government computerization,
which shall become part of the President’s Annual Expenditure Program for
submission to Congress.

Section 3. Implementing Rules and Regulations. ITECC shall issue

such guidelines as may be necessary to implement this Executive Order.

Section 4. Repealing Clause. All orders, directives, issuances,

resolutions, rules and regulations or parts thereof that are inconsistent with the
provisions of this Executive Order are hereby repealed or modified accordingly.

Section 5. Effectivity. This Executive Order shall take effect immediately.

DONE in the City of Manila this 12th day of July, in the year of our Lord Two
Thousand.

JOSEPH EJERCITO ESTRADA

President of the Philippines

By the President:

RONALDO B. ZAMORA
Executive Secretary

149

Market studies on specific countries in Asia-Pacific
Demand conditions
THAILAND
Market Statistics (millions of
US$)
Business Services in Thailand: already present in Thailand.
1997 1998 1999
2000*
A. Total Market Size:
670 800 920
1050
B. Total Local Production:
268 320 368
450
C. Total Exports:
7 8 9 financial sector alone needs
30
D. Total Imports:
408 488 561
630
E. Total Imports from U.S.
204 244 280
360
*estimate
Notes: The above statistics
are unofficial estimates,
Business services include
accounting, legal,
management consulting and
advertising services
Exchange rate: US $1 = 37
Baht
CHINA
China's management
consulting industry essentially
took off in 1996. The market
has since then expanded from
almost zero to over one billion
dollars in revenue. The
industry's growth rate
surpasses 200 percent each
year.
Appendix E
Industry Structure
Market leaders in
management consulting are
These are :Andersen
Consulting, Boston Consulting Thailand and already lists 98
Group Price Waterhouse,
Demand is expected to remain committee. The Royal Thai
particularly high for expertise
in financial restructuring
related activities, mergers and the financial sector and
acquisitions, debt collection,
and due diligence work.
More than 100,000 companies
are active in the Chinese
consulting market of which 65
percent of them are foreign
firms with over 85 percent of
total revenues. Some of these
foreign firms have dramatically
expanded their number of
employees from just a handful
of consultants to more than a
hundred. Their clients now
also include large Chinese
companies.
China's management
Factor conditions
Reflecting the need for
finance related advisory
services, a new committee
was set up by the Bank of
financial advisors doing
restructuring work through that
Government should continue
to push the recapitalization of
privatization of many state-
owned enterprises. Standard
& Poors estimates that the
over $30 billion in new capital,
and under $10 billion has been
raised so far. In addition,
potential privatization
candidates for divestiture are
state-held transportation,
telecommunications, and
energy enterprises.
Premier Zhu Rongji
highlighted China's ambition to
develop a modern
management consulting
profession during his visit to
the Massachusetts Institute of
Technology in 1998. Although
some parts of the Chinese
government and many state-
owned enterprises (SOEs) still
view the emerging
management consulting
industry with skepticism, more
and more Chinese have come
to accept the fact that China
150
Demand conditions Industry Structure
consulting firms come in a
variety of forms. In addition to
the traditional management
consulting firm, financial
advisories, brokerages,
universities and even research
arms of ministries offer
extensive consulting services.
Many of today's domestic
management consulting firms
have grown out of these
unconventional types of
organizations.
China's management
consulting sector is bereft of a
clear regulatory structure. Both
licensed and unlicensed firms
compete in the market. In the
late 1980s, four foreign
consulting companies were
granted licenses from the
State Council with the backing
of Zhu Rongji, then Mayor of
Shanghai. The four companies
-- BCG, Arthur Andersen,
China Consulting Association
and the Hong Kong Lei-Da
Group – are still the only
foreign consulting firms with
official licenses. The only
difference between them and
their unlicensed competitors is
that they have certain tax
advantages.
The three-tier market structure
evident in many other
industries is also applicable to
China's management
consulting sector. The high
end segment is dominated by
foreign consulting firms with
about 20-30 percent of the
market. These firms focus on
serving multinational and large
domestic clients.
The second layer is composed
of joint ventures and Chinese
companies with significant
foreign background (such as
graduates from overseas
schools or former consultants
at foreign companies). They
Factor conditions
needs world class
management experience to
transform its moribund state
sector and integrate it into the
world economy. In the near
term, tremendous
opportunities for consulting
firms will arise from SOE
reforms, financial system
restructuring, and the
expanded use of information
technology.
The implications of accession
to the World Trade
Organization (WTO) for
China's management
consulting industry would be
two-fold. First, foreign
management consulting
companies that now operate
with representative offices
could gain official status to
engage in a broader scope of
business. Second, and more
importantly, WTO entry could
speed up the restructuring of
the nation's industries, which
will need advice on how to
adapt to change. A more open
environment spurred by WTO
accession could also foster
greater acceptance of foreign
management consulting.
Information technology
consulting is becoming
increasingly important. The
decision in August 1999 by the
Communist Party and the
State Council to support
fledging high-tech industries,
which will also benefit
consulting firms, has been
followed by a series of
material incentives:
o Business tax would be
waived on income from
technological transfers,
technological development
and related technological
consultancy and services.
o Priority would be given to the
companies to list on both
151
Demand conditions Industry Structure Factor conditions
tend to have a wider client domestic and overseas
base because of their intimate markets. Secondary boards for
local knowledge and more high-tech firms would be set
competitive prices. Their up on the Shanghai and
market share is expected to Shenzhen stock exchanges
grow from one-third to half in once conditions are ripe.
the near future.
o Risk funds and venture-
At the bottom is the home- capital development
grown consulting companies companies for high-tech
that are meeting the mounting industries would be
domestic requirements for established to help finance
management consulting during start-up operations.
China's economic transition.
Over the long term, the third
group of companies could only
survive by converging with the
second and transform the
competitive landscape into
multinational vs. domestic-
foreign alliance.

The combination of China's

particular culture and
extensive planned economy
has meant that many of the
principles developed in the
west have to be modified
before they can be applied to
the local environment. In
particular, the following factors
must be considered:
o Strategy implementation --
Domestic clients are still ill-
prepared to absorb the types
of sophisticated structural
changes commonly proscribed
by consulting firms in the west.
They often seek strategies that
can be implemented without
great difficulty. If changes
work against SOE leaders,
they will often resist any ideas
proposed by consulting firms.
Sometimes these leaders are
not at all interested in change
as their average tenure is only
three to five years.
o Project scope -- Local clients
have a tendency to address
and ever widening spectrum of
problems as projects move
ahead and, therefore, easily
expand the scope of a project.
This has to be managed

152
Demand conditions Industry Structure Factor conditions
carefully to keep the project
within budget.
o Policy initiatives -- Many of
the regulations directed at
other industries can have a
significant impact on the
management consulting
sector. For example, a
recently released regulation
restricting market research by
foreign companies could
substantially disadvantage
foreign consulting firms
operating in China.

Market Trends

Organizational change and

performance improvement is
needed throughout China's
economy. The three top
sectors on the reform agenda
of China's leadership are
finance, information
technology/telecommunication
s and health
care/pharmaceuticals. These
are the same areas with the
fastest growing demands for
consulting services. Strategy
and marketing services are the
most needed, followed by
organization consulting and
industry/economic analysis.

Many multinationals used

consultants to help enter the
market, seeking advice on
joint-venture formation, partner
identification, market
assessment and risk analysis.
These companies now look to
improve overall operations and
business processes, focusing
on more traditional consulting
services such as systems
integration, business-process
re-engineering, strategy
formation and implementation,
and supply-chain
management.

For domestic companies that

are seeking outside consulting
services, they are more

153
Demand conditions Industry Structure Factor conditions
interested in the role of
information technology and
business strategy formulation.
These companies are usually
large and profitable state-
owned enterprises or fast-
expanding private companies.
Although state-owned
enterprises have started
reaching out for consulting
services, most of them still
drag their feet as few of them
are making money and various
limitations prevent them from
fully implementing any
proposed structural changes.
Industry analysts estimate that
domestic companies listed on
the stock market will need the
most management consulting
services in the future.

While the overall management

consulting industry in China is
undergoing significant change,
the clients' needs are also
changing as their operations
evolve. Among multinational
clients the focus is shifting
from entry level strategy
consulting to growth and
operations strategy. For
domestic clients, there is a
shift from technical and
engineering consulting to
management consulting. With
continuing economic reform,
consulting services on
mergers and acquisitions as
well as joint-venture
dissolution and formation will
be on the rise.

Another area of change in the

management-consulting
market is the appearance of
domestic competitors,
especially in the areas of IT
consulting and systems
integration. New local players
are competing largely on the
basis of price and , because of
their intimate knowledge of the
mainland business
environment, they seem to

154
Demand conditions Industry Structure Factor conditions
have an added advantage
over many foreign firms.
Therefore, partnering with
local firms could become a
trend as the consulting market
develops.

For consulting companies on a

lookout for opportunities in
China, the development in
China's management
consulting sector has
demonstrated several key
success factors. Consultants
must select the right types of
clients. Targeting domestic
enterprises and government
organizations as the primary
market has, in general, not
been successful, leading many
firms to return to their
multinational clients. This has
made competition in the high-
end market intense and has
left fewer opportunities for
newcomers to be successful.
Therefore, new-to-market
firms are best advised to
incorporate local clients in
their expansion plan in the
early stage and start
partnering with local consulting
firms.

It is crucial to develop a good

rapport with key central and
local government officials and
business community leaders.
This takes time. Localizing
services may assist in such
outreach efforts. Hiring local
graduates and experienced
managers may also increase
profitability because local
salaries are significantly lower
than expatriate pay packages.

Value should be delivered

quickly and decisively, using
global best practices. The
price of the service has to also
be price-sensitive. Chinese
business people are becoming
increasingly savvy and are
aware of what to expect from

155
 Demand conditions Industry Structure Factor conditions
management consulting and at
what price.

Finally, foreign management

consulting firms have to be
able to meet the unique
demands of Chinese clients
arising from their particular
local environment.
Management consulting that
can deliver locally tailored
solutions sensitive to local
culture, political dynamics and
the legacy of socialist
economics will be in the best
position to gain a following in
the marketplace.

LAOS
Growth of private investment
and commerce will necessarily
generate increasing demand
for banking, insurance,
accounting, communciations,
and consulting services. In
1998, the services sector grew
by 4.8%, and now constitutes
more than 25% of GDP.

156
 Appendix F
Market studies on specific countries in Europe
Demand conditions Industry Structure Factor conditions
GERMANY
Management Consulting is Estimates report that there are Further expansion of the
one of the most thriving almost 10,000 one- sector is obstructed by a
service sectors in Germany. man/woman operations, severe lack of qualified
The total market continues to which, account for a very small personnel.
grow by more than ten percent fraction of the total market in
per year and does not show terms of billings. Today, clients
any sign of stagnation or of management consultants
decrease in Germany. To typically integrated solutions
obtain reliable statistical is from their consultants..
extremely difficult. Increased internationalization
and technical developments
1998 1999 almost guarantee further
2000* growth potential.
A)Total sales
10,650 12,680 Andersen Consulting
13,950 Unternehmensberatung GmbH
B) Sales by local firms
5,440 5,990 Andersen Consulting's
6,200 turnover for Germany and
C) Sales by foreign-owned Austria amounted to DM804
firms million in 1998, representing
5,440 5,980 an increase
6,200 of 23.5% on the previous year.
E) Sales by U.S.-owned firms
4,560 4,700 The company employs a
5,000 workforce of 44,000 worldwide
in
*estimate 137 offices in 46 countries.

Worldwide turnover for

Andersen totaled US$8.3
billion in
1998, up around 25% for the
third consecutive year.

The company offers a range of

consulting services divided
in four branches: strategy,
change management,
business
process management and
technology.

The technology side of

business is becoming more
and more
important to Andersen
Consulting.

157
 Demand conditions
The Italian market for
management consulting was
estimated at USD 1.8 billion in
1999 (excluding earnings
additional to fee income, such
as revenues from outsourcing
activities, software licenses,
etc.). Consulting is having an
unprecedented period of
growth in Italy, with yearly
increases of 15% or more.
Corporate strategy consulting
accounts for about 40% of
total fee revenues (with
strategic planning and
organization development
totaling 15% and 13%
respectively). Information
technology consulting follows
with 32% of total revenues
(with "pure" IT consulting
totaling 13% and IT systems
development/integration 16%).
Operations management and
human resources consulting
total respectively 20% and 8%
of total revenues. In 1999, the
manufacturing sector was the
biggest purchaser of
management consulting
services (32%), followed by
the banking and insurance
sectors (29%), the
communication and
transportation sectors (19%),
and the central & local
Industry Structure
The company recently teamed
up with the world's largest
ERP-provider SAP in order to
improve the service in this
area.
The German branch of the
international consulting
company
was formed in 1989 and has 5
offices employing 1100
people.
Source: Euromonitor
ITALY
The market in Italy is
comprised of about 800 firms
with 22,000 people, and is
divided among global
competitors (most of which are
of U.S. origin) offering a full-
range of state-of-the-art
products, a few "national
champions", and a number of
local or niche players and
"gurus". Concentration is high,
with the top 20 firms making
up about 40% of overall fee
revenues. Multinational firms
are said to make up as much
as 60% of the market.
Most big multinational
consulting firms are well
established in the Italian
market. The largest consulting
firm in Italy is Andersen
Consulting, which recorded
sales in excess of USD 370
million in 1999 and employs
over 3,000 people. In addition
to consulting, Andersen
Consulting (like other
important consulting firms)
provides solutions and
technology in the area of
information services, as well
as outsourcing services in the
area of administration and
financial control. The top
Italian firms include Consiel,
Factor conditions
Issues such as e-business,
implementation of ERP
systems,
globalization/internationalizatio
n, mergers and acquisitions
are said to be key drivers for
management consulting
services in the near future.
Both private and public
organizations offer
opportunities. Public service
companies and government
agencies are slowly but
steadily re-organizing and
reviewing their operations to
achieve higher efficiency. In
particular, utility companies --
which used to hold monopoly
positions in the
telecommunications, energy,
and transportation sectors --
are now faced with challenging
liberalization and privatization
processes.
A solid knowledge of the local
regulatory environment and
market conditions, as well as
unique know how in
specialized sectors/functions
and adequate international
experience have become pre-
conditions for effectively
competing in this market.
American consulting firms
considering entering the Italian
158
 Demand conditions
governments (8).
(USD Millions)
1998 1999 2000*
Total Market Size
1,580 1,750 1,850
Sales by Local Firms
700 770 815
Exports by Local Firms
60 70 75
Sales by Foreign-owned Firms
940 1,050 1,110
Sales by U.S.-owned Firms
660 740 780
Exchange rate used:
1737 1818 2000
The above statistics are
unofficial estimates.
SWITZERLAND
Hardly another market is
booming as much as
consulting. In Switzerland the
business consultants book a
yearly growth of around 15%.
In 1999, Swiss companies
spent around $1.5 billion for
business consulting
In their statutes,
Consultants are often hired for
problems and challenges that
companies cannot do or do
not want to direct themselves:
personnel search and
recruitment (58%), legal
advice (44%), software
development and
implementation projects
(42%), strategic questions
(40%).
In the age of global change
there is a high demand and
continuous need for
management and business
consultants. More and more
consultants want to join this
race and open new offices in
Switzerland
Industry Structure
Praxi, Soges, Elea, Monitor,
Value Partners, and GEA.
. The consultant density in
Switzerland - the number of
consultants per one million
inhabitants - is the highest
worldwide. From 1984 until
1998, the total number
increased 65% to reach a total
of 2,700 consultants.
Consultants are a power
segment in the Swiss
economy. Regionally the
consulting business tends to
concentrate in the economic
metropoles: around 60% in
and around Zurich, the rest in
Geneva, Bern, Basel, Luzern
and St. Gallen.
Asco (Swiss association of
business consultants) defines
business consulting as follows:
Business consulting is a
project related interaction
process between people of a
client system and people of a
consulting system. The
consulting system is
independent, helps
professionally, viewing a
problem in its entirety, to
optimize the success potential
of the client system. Classical
business consulting is not a
standardized service, but a
custom tailored solution and
Factor conditions
market should therefore
explore the possibility of
teaming up with Italian
partners.
Globalization and deregulation
challenge management more
and more. To a modern
economy based on division of
labor, it is not unusual to
search for services (which one
does not have in house) from
outside. The upcoming e-
business, with its associated
structural changes, will also
give added impetus to
consultants.
Broad general knowledge of
the economy and present
management methods as well
as life experience and
knowledge of human nature
are success factors in this
business. Successful
consultants not only have
expert competence but also
the capacity of understanding
and sensibility, excellent
communication skills and
independence in judgement.
Structural changes with the
upcoming e-business, System
Based Marketing and IT
solutions call for diversified
consulting teams consisting of
company and technology
developers, strategists,
marketing specialists,
159
Demand conditions Industry Structure Factor conditions
the consultant can only help information specialists, etc.
and support. The translation These specialists have often
into action of the measures to be hired from the USA,
has to be executed to a great Germany and Far East. Fast
extent by the client himself and more precise results
who is also responsible for it. concerning effectiveness of
marketing measures and client
The competition on the Swiss care thanks to data
market is accordingly fierce. warehouses, data mining,
The internationally leading internet/intranet or call centers
consulting companies also are demanded. The
have a firm base in information field seems to
Switzerland and they occupy have the best growth potential
the first six ranks in terms of for new entrants in the
turnover. In Switzerland there consulting branch. A new
is free competition in the trend is also becoming evident
consulting business and in the knowledge management
therefore the range of fees is consulting. Important world
wide. The consulting fee organizations, governments
system differs between daily and world enterprises count on
fees and success fees, which this expertise. Since
are paid after successful Switzerland is home to many
implementation. The pressure such organizations and
from clients oriented towards a entities, the potential is
fee system depending on significant.
success. Top consultants
enjoy yearly fee turnovers of
over $640,000; the absolute
top can amount to $1,120,000
and more. Such returns are
obtained by the "stars" of
single consultants, smaller
consultant companies, so-
called "boutiques" (highly
specialized) as well as by the
giants from the premium
segment of the big
international consulting
companies. Also auditors, who
more and more are advancing
into the business segment of
consulting, can book
considerable rates.

Business Consultants Fee

turnover 1998

McKinsey
Pricewaterhouse Coopers
$120-160 million

Andersen Consulting
ATAG Ernst&Young
CSC Ploenske $48-118 million
The Boston Consulting Group

160
Demand conditions Industry Structure Factor conditions
KPMG

Arthur Andersen
Arthur D. Little
Bain & Company $24-46
million
St. Gallen Consulting Group

The business consulting

branch is very complex. From
monolithic consulting
companies they have
developed to specialty
networks in order to be able to
cover the range of requests
completely. They offer a wide
range of services and support
their clients in all questions
concerning strategy,
organization and often also in
special fields like logistics or
technical problems. Also the
small and middle-sized
companies distinguish
themselves with attractive
specialties in this complex
environment. Their focus is
more on particular fields such
as company culture, corporate
identity, brand building, and
technology and innovation
management.

Consultants enjoy high

acceptance in Switzerland.

On many "executive floors" the

consultants are considered
indispensable, continual
helpers, available on call. All
the big companies work with
consultants. Also small and
middle-sized companies trust
in consultants and regularly
engage one or more
consulting companies to
assure the success of their
enterprises. The consultants
are expected to have the latest
knowledge which they bring to
bear to analyze and handle
problems. They are also able
to benefit from the realization
of other company projects.
They have the time to go into

161
 Demand conditions
UNITED KINGDOM
70% of Britain's $1.21 trillion
annual GDP is now
generated by services.
Transportation,
telecommunications, finance,
and insurance are the best-
known sectors, dominated by
big business and established
companies. These important
sectors and the leading
companies within them have
proved to be flexible and
innovative, responding quickly
to market conditions and
regulatory change, but tending
to exclude small and medium-
sized firms. The most
productive of those
professional and technical
services sectors are
architecture and design,
advertising and publicity,
management consulting,
research and development,
and international legal and
accounting
services.
U.S. professional services
companies generate annual
fees
of approximately $13.5 billion
from the U.K. With insight
into market conditions, means
of access, and potential for
exports, U.S. firms have
already achieved a significant
Industry Structure Factor conditions
details, which the own
company people do not have.
Big companies often work with
international top consultant
companies and highly
specialized consultants. Small
and middle-sized companies
tend more to small owner
managed consulting
companies where they have
the possibility to negotiate
directly with the owner in order
to work out fast and pragmatic
solutions.
Total advertising spendings in
the UK management
consultancy market amounted
to £5.3 million in 1998, an
increase of 19% on the
previous year.
The majority of advertising
(74%) is channeled through
the press, in particular trade
journals, reflecting its status
as a business to business
service.
The other significant
advertising channels are
television, radio and outdoors
adverts accounting for 20%,
5% and 1% of the total
adspend respectively.
The most prolific advertiser
was Business Link, which
accounted for over 37% of the
total adspend.
Business Link is sponsored by
the Department of Trade and
Industry and is organized by
local government to provide
business counseling and
management consulting to
local
industry.
Andersen Consulting
maintained a high profile in
162
 Demand conditions
market share.
Market Data ($ billions)
1997 1998 1999(est)
A) Total Market Size
875 880 885
B) Locally Billed Services*
892 892 895
C) Total Services Exports
383 385 389
D) Total Services Imports
366 373 379
* It is not possible to
differentiate the services billed
by majority-owned affiliates of
U.S. firms established in
Britain from those of British-
owned firms.
Industry Structure Factor conditions
1998, predominantly through
television advertising, and in
1998 its budget was 9%
higher than in 1997.
KPMG UK
KPMG produced its best fee
performance for a decade in
1998, with gross fees up
19.4% since 1997 at £867
million.
It was also a profitable year
with net profit up by 20.6%
since 1997 at £179 million in
1998.
Its performance in
management consulting
spearheaded the
firm's growth as fees rose by
51% to £216.9 million.
In December 1998 the UK
chiefs of KPMG said they were
considering floating a portion
of their fast-growing
consulting business.
Calling off the merger with
Ernst & Young had a limited
effect on the company, as few
people as necessary were
involved in the merger talks.
Around two-fifths of KPMG's
income came from auditing
and
accountancy, with a further
21% from tax, 17% from
management consultancy,
22% from corporate finance
and insolvency services.
Cap Gemini Group
Turnover increased by 28.6%
since 1997 to FF25.9 billion in
1998.
Net profit in 1998 amounted to
FF1.2 billion, an increase of
163
 Demand conditions Industry Structure Factor conditions
62% on the previous year.

The Cap Gemini Group is

established in two core
businesses: information
technology services and
management consulting
which it provides through its
subsidiary, Gemini
Consulting.

The company has recently

gained a £600 million contract
with Carlton Television to run
their IT systems, monitoring
annual sales of television
advertising.

Outsourcing services include

applications management,
distributed computer services,
central computer services,
network management systems
and business process
management.
BULGARIA
Investors in Bulgaria need the
services of consultants to help
them with market entry. In
addition, small and medium
sized Bulgarian companies
unfamiliar with how to prepare
a business plan to attract
investors or obtain a loan need
consulting services to help
them. They also need
assistance from consultants in
doing research to help them
find and acquire new and used
machinery.
Source:http://www.usatrade.gov/ccg

164
 Appendix G
Market study on the United States
Demand conditions Industry Structure Factor conditions
UNITED STATES
Management consulting was Accounting, Auditing and
the largest sector in the bookeeping sector
Accounting, Auditing and
Bookkeeping market As the management
in 1998 with a value of consulting sector begins to
US$35.4 billion. mature, companies are
expected to begin
As auditors face decreasing differentiating their services
demand for their traditional along those practices in which
tax and auditing services, high they have a competitive
margin consulting services advantage.
assumed a greater role in the
market. Consulting divisions should
become more specialized to
Reflecting this trend, the particular client needs as this
management consulting sector trend develops.
Grew 105% over the review
period, from 40% of market To be competitive CPAs are
value shifting their focus toward
In 1994 to 47.5% in 1998. helping clients understand all
areas of business
US$ million sectors performance rather than
1994 1998 financial matters alone. This
Management Consulting trend is expected to continue.
17,223.6
35,360.9 Management, marketing and
Consulting services sector
Source: Euromonitor
As numerous consulting firms
Management consulting is experienced difficulty finding
expected to account for 56.1% skilled worker during the
of review period, extensive
the market in 2003, growing employee

165
 Demand conditions
92.5% in current terms from
1998 to a value of US$72.5
billion.
SECTOR FORECASTS
1999-2003
US$ million sectors
1999 2003
Management Consulting
42,000.0 72,500.0
Source: Euromonitor
In the same manner, the
strategic management
consulting sector was the
largest
during the review period,
accounting for 54% of total
management and marketing
consulting services market
revenues in 1998.
Management consulting
revenues grew 84% from 1994
to a
value of US$29.3 billion in
1998, with companies
increasingly seeking
professional advice regarding
international expansion and
internal restructuring
strategies.
Fueled by rapid technological
advancements, the computer
and software consulting sector
was the most dynamic during
the review period, increasing
146.9% from 1994 to a value
of US$ 7.8 billion in 1998.
The tax consulting sector was
the least dynamic during the
review period, decreasing
17.1% from 1994 to a value of
US$868.9 million in 1998, with
companies increasingly
handling such matters
internally.
Accounting for 13% of total
management and marketing
Consulting revenues, the
public relations consulting
Industry Structure Factor conditions
training programs became an
integral part of the
development strategies of key
players.
Numerous management
consulting firms improved
employee compensation
packages, shared governing
power, and combined and
redefined jobs in an effort to
ameliorate employee
relations between 1994 and
1998.
Key players relied on
technological advancements
to
enhance their quality of
service and more effectively
meet the needs of their
clients during the review
period.
Major management consulting
firms increased global
operation activity during the
review period as they
continued to provide service to
internationally-expanded
clients.
Many key players sought to
become comprehensive,
seamless professional
advisory organizations during
the review
period, offering consulting
services in conjunction with
professional services, such as
accounting.
CORPORATE OVERVIEW
1998
Companies
avg. sales growth market
share
Andersen Consulting
23.6 12.2
PricewaterhouseCoopers
2.0 8.0
Deloitte Touche Tohmatsu
Internat
166
 Demand conditions Industry Structure Factor conditions
sector 12.6 6.7
increased 38.7% from 1994 to Ernst & Young International
a value of US$7.1 billion in 18.2 6.7
1998. KPMG International
5.3 4.8
1994-1998
Source: Euromonitor
US$ million
1994 1998 PricewaterhouseCoopers net
Management consulting sales grew 2% from 1997 to a
15,862.0 value of US$15.3 billion in
29,326.8 1998.
Computer and software
3,145.0 As one of the leading global
7,766.2 Public relations auditing, consulting, and
5,091.0 accounting firms,
7,060.2 Other consulting and PricewaterhouseCoopers, was
design formed by the 1998 merger of
3,459.0 two of the top management
6,136.9 consulting firms,
Engineering and design Pricewaterhouse and Coopers
2,444.0 & Lybrand.
3,149.9
Tax 1,048.0 PricewaterhouseCoopers
868.9 operates 850 offices in 150
Countries, allowing the
Source: Euromonitor company to serve a wide
range of local, global, and
international companies as
well as public institutions.
The strategic management
consulting sector is expected The company range of
to services includes auditing,
continue to be the largest accounting and tax advice,
during the forecast period, business process outsourcing,
accounting for 54.4% of total information technology, human
US management and resource consulting, and
marketing legal services through a
consulting revenues by 2003. worldwide network of affiliated
law firms.
Strategic management
consulting revenues are During fiscal 1999,
forecast to increase 64.8% PricewaterhouseCoopers
between 1999 and 2003 to a agreed to join forces with
value of US$54.8 Methodfive, a company
billion. formed to help firms
design their web presence, in
The sector will benefit as firms an effort to expand their e-
seek corporate restructuring business service offerings.
advice in an effort to improve
profit margins in highly
competitive market
environments.

Rapid technological

167
 Demand conditions Industry Structure Factor conditions
advancements should
continue to fuel sales in the
computer and software
consulting sector during
the forecast period.

Computer and software

revenues are forecast to grow
69.9%
from 1999 to a value of US$15
billion in 2003.

The tax consulting sector is

expected to continue to be
the least dynamic during the
forecast period, increasing
41.7% from 1999 to a value of
US$1.3 billion in 2003.

Increasing 59.7% from 1999,

the public relations consulting
sector should reach a value of
US$12.7 billion by 2003.

SECTOR FORECASTS
1999-2003

US$ million
1999 2003
Management consulting
33,220.6
54,773.8
Computer and software
8,814.3
14,974.0
Public relations
7,930.6
12,663.4
Other consulting and design
6,885.5
11,055.4
Engineering and design
3,704.2
5,828.7
Tax 922.1
1,307.0
Source: Euromonitor
Source:http://www.usatrade.gov/ccg

168
 Appendix H
Market studies on specific countries in other regions
Demand conditions Industry Structure Factor conditions
KUWAIT
To increase the efficiency of The frequent discussions
its indigenous manpower and about privatization, Foreign management
to rationalization of consulting companies
reduce reliance on expatriates, Expenditures, and the pursuing governmental
Kuwait needs management Kuwaitization frequently projects in Kuwait must be
consulting firms for the associated with discussions registered with the Ministry of
organization of the about replacement of Planning. The Consultant
administrative and financial expatriates in the public sector Department screens all
sectors. It also needs by Kuwaiti nationals, resulted registered companies for
consultants for defense in the creation of a few projects and recommends the
planning and major project management consulting firms most qualified to handle a
management. in Kuwait to take advantage of particular project.
these opportunities.
According to the World Bank's Engineering consulting offices
report on privatization in are numerous in Kuwait and There is a higher Consulting
Kuwait, have existed for a long time. Committee that approves the
an efficient and low cost International firms created joint list of qualified companies.
financial sector is necessary if ventures with local agencies This committee comprises
Kuwait for management advisory as representatives
wants to meet objectives of divisions of auditing or From the following
increasing economic efficiency accounting offices like Arthur government agencies:
and overall productivity. To Anderson, KPMG Peat
achieve this, Kuwaiti banks Marwick, Coopers & Lybrand, Ministry of Public Works
need the services of Price Waterhouse, and Ernst Ministry of Communications
management consulting firms. & Young. Ministry of Electricity & water
Ministry of Planning
The Ministry of Finance and Department of Legal Opinion
Ministry of Communications in Local firms play a small role in and
particular require the services this sector. The successful Legislation
of management consulting ones associated themselves Kuwait Municipality
firms to with U.S. firms, such as Council of Ministers
help them proceed with their Coopers &
privatization programs which Lybrand with Bader & Co.,
have Ernst and Young with Ahmed
been approved. There is also Al-Eiban & Partners, Price
privatization talk involving Waterhouse with International
information, electricity and Audit Bureau and KPMG with Management consultant
water sectors, the Ports Masoud & Co. companies do not require an
Authority, agent in Kuwait. If a
the Kuwait Airways, and the Most U.S. management management consulting firm is
Free Trade Zone. consulting companies have selected for a
established themselves as certain governmental project, it
reputable organizations with is necessary to associate itself
The following government widespread knowledge with a local management

169
 Demand conditions
agencies are expected to be
privatized, though partially,
within the next few years: Oil
Sector: Kuwait National
Petroleum Company (KNPC)
announced it
will privatize about 33 gas
stations this year. This will be
carried out as soon as studies
for this move are completed.
Other sectors of the oil sector
like transportation,
international sales and
partnership agreements, etc.
Three large American firms
are currently providing
management consulting
services to the oil sector:
Parson International for Kuwait
Oil Company (KOC), Stone &
Webster for the Kuwait
National Petroleum Company
(KNPC), and Fluor Daniel for
the Petrochemical Industries
Company (PIC).
The Ministry of Information will
launch the first cable TV
project after the final approval
is obtained from the Council of
Minister's Finance Committee.
The feasibility study has been
completed. a sahreholding
company will be funded at
U.S.$33 million. 65% of the
shares will be open to the
public and the remaining 35%
will be distributed to company
founders. The cable TV
system will be implemented
through a multi-video
distribution system, described
as a micro-wave wireless
cable. To initiate
this project an international
management consultant is
required.
Free Trade Zone: Kuwait has
sanctioned the establishment
of a
free trade zone. A local
company has been awarded
the contract
Industry Structure
and experience in the
international and Kuwaiti
markets. Since most Kuwaiti
decision-makers and
managers are U.S. educated,
U.S. management consulting
firms have an edge over other
countries.
The major competition to U.S.
consulting firms comes from
British companies who are
present in some sectors like
the power and health sectors,
though on a small scale.
In other sectors such as
construction, civil aviation,
information management
systems and technology,
financial
services, educational systems,
university education, etc.
American firms dominate. The
real competitive factors which
American firms should
consider include technical
merit,
reputation and price. Past
experience in similar projects,
preferably in the region, is also
an advantage.
Revenues of management
consulting services in 1996
amounted to approximately $
70 million. The local
companies share was about
20%; U.S. firms was an
impressive 70%; British firms
took 10%. This figure is
expected to grow by a
minimum of 20% each of the
next three years if the
government goes ahead with
its plans to
privatize, Kuwaitize, reducing
the number of expatriates in
the
public sector. Management
consulting services are
needed to
assist the government in
achieving its objectives.
Factor conditions
consultant. The relationship
may be one of partnership or a
joint venture.
For the private sector, foreign
firms should contact
institutions
directly to market their
services and expertise.
Foreign firms are also
reminded that foreign
companies doing
business in Kuwait are subject
to an income tax of up to 55%
of
the net profit. The government
is planning to reduce this high
percentage to about 30-35%.
Kuwait has a modern banking
system and local banks have
correspondent banks in the
United States. There are no
restrictions in Kuwait on the
transfer of currency.
Several factors play a vital role
in shaping the market's
demand
for management consulting
services in Kuwait.
Kuwait is a small country with
a total population (1997) of
1.75
million. More than 60% of the
total are non-Kuwaitis.
Kuwaitis
constitute 93% of the total
labor force in the public sector
but
form only 3% of the labor force
in the private sector. The
number of Kuwaitis seeking
jobs is increasing and the
Ministry of
Planning and Parliament warn
against a forthcoming
unemployment
problem. To create jobs for
170
 Demand conditions
to manage the zone. This
company requires the services
of an international consulting
firm for the management of the
project.
To create jobs for the
increasing numbers of Kuwaiti
graduates
and to reduce dependence on
expatriates, the public and
private
sectors need to hire currently
inexperienced local staff to fill
jobs occupied by expatriates.
Government end-users
include:
--Ministry of Defense
-- Ministry of Education
-- Ministry of Finance together
with its Kuwait Investment
Authority
--Ministry of Health
--Ministry of Planning
--Directorate of Civil Aviation
--Kuwait Petroleum
Corporation
--Kuwait University
--Public Authority for Applied
Education
-- Public Authority
for Industry
--Public Authority for the
Protection of the Environment
- Civil Service Commission
Management consulting
services are needed to help
reduce the number of
expatriates who impose a
heavy burden on the
government's budget
and their services are also
required to upgrade
capabilities of
Kuwaitis in performing their job
responsibilities. Management
consulting services are most
needed for the following
sectors:
major projects, health care
services, human resources
development, banking and
Industry Structure
American consulting firms are
doing very well in this service
sector. American consultants
in Kuwait include: Turner,
Parsons,
Synergy, Ernst Young, KPMG
Peat Marwick, DMJM
International, AMIDEAST, Inc.,
Arthur Anderson, Booz-Allen &
Hamilton Inc., Chevron,
Coopers & Lybrand, Stone &
Webster, Merz &McKlenan,
etc.
Factor conditions
Kuwaitis, the government:
-- Decided to replace 10% of
the expatriate public sector
labor
force every year with Kuwaitis.
This will create about 5,000
jobs for Kuwaitis every year.
This also means, at least
theoretically, that the public
sector will be Kuwaitized
within
the next ten years. This is a
very challenging target and
needs,
to materialize, the advice and
expertise of consultants in
human
resources development and
training. U.S. companies are
advised to include, in any
proposal to governmental
agencies or public companies,
methodologies on
management development
and training.
--Enacted a law forcing local
companies to have a minimum
of 10%
Kuwatis in their workforce.
Companies that comply with
this law
will be given incentives in the
form of tax cuts and subsidies.
--Announced a privatization
program for certain sectors
and will
introduce a privatization law to
create new employment
opportunities for nationals in
the private sector. The
concerned
government agencies seek
management consulting
services to help
them absorb those nationals in
an effective and productive
way.
--Will impose health care
171
 Demand conditions
financial services, computer
technology; information
services, organization analysis
and development, project
management consulting
services, and quality control.
The end users of the basic
management consulting
services include various
governmental entities and
institutions.
Industry Structure Factor conditions
insurance on expatriates in the
near
future because it wants to end
more than 40 years of free
medical
treatment for expatriates to
offset some of the heavy
expenditures on medical
services. Health insurance
service is
new in the country and the
task will be assigned to four
national
insurance companies which
lack experience. This policy
will also
encourage construction of
private hospitals that can offer
competitive medical care
through modern equipment,
good doctors,
and good management teams.
It will create significant
opportunities for American
management consultants in
these
fields.
-- Established a new Public
Authority for Industry which
paid US
$670,000 to the Arab
Development Center for its
administrative
organization. Similarly, the
Public Authority for the Applied
Education & Training paid the
same local consulting office
US
$3.35 million to assess the
needs of ministries and
governmental
entities for technical labor
force by the year 2010.
Kuwait Petroleum Corporation
(KPC) approached our office
recently
requesting addresses of U.S.
consulting firms in finance and
administrative organization.
Other larger institutes like
Kuwait
Airways, the Ports Authority
and investment companies will
172
Demand conditions Industry Structure Factor conditions
require the assistance and
expertise of management
consulting
firms in the near future.

Major projects that cost over

$3 million require international
consultants to establish
designs and specs for these
projects
before they are announced to
local or/and international
contractors. Some of these
projects that contracted
management
consultants include:

--The Oil Sector Complex

(KPC/Ministry of Oil
Headquarters): $83
million: The construction
manager of the project is the
British
Bovis with the local Projacs.
Costs are US $3.5 million.
The project consultant is the
local Salem Al Marzouk and
Sabah
Abi Hanna (SSH) together with
the Canadian firm Arthur
Erickson.
The project will be completed
in March 2000.

--The New Al-Zoor Power

Plant: This plant will generate
2400 MGW
of power and 48 million
imperial gallons of drinking
water. The
project has been assigned to
American companies. Two
consultants
are required: one for the
power plant and another for
the
desalination plant.
The consultant will be selected
in November 1997.

--The Central Prison Complex

173
Demand conditions Industry Structure Factor conditions
(Rehabilitation and
Deportation
Center) which will cost more
than US $40 million. An
American
consultant will most likely be
selected for the project.

--Sulaibiya Water Distribution

Project: The Ministry of
Planning
is in the process of selecting a
consultant.

-- The Ministry of
Communications contracted
with the Swedtel
Consultant to develop and
improve the telephone network
in
Kuwait. Costs were US
$452,000.

--Kuwait Airport Control Tower

and Radars: the U.S. DMJM
International was appointed
the Project Manager at a cost
of
$7.14 million.

--Frederic Harris, Inc. was

awarded the consultancy work
for the Ahmadi north pier.

Consulting firms do not need

local agents; they do need to
associate themselves with a
local consulting office to work
as
partners because Kuwait
wants to transfer expertise to
its
national companies through
collaboration with international
establishments.

American companies are

reminded that they are subject
to a 55% tax on their net
profits in the country. The

174
 Demand conditions
WEST BANK
Public and private institutions
seek a variety of consultings
ervices for product
development, quality control,
amrketing, setting up
corporate administrative
systems, financial analysis,
and use of information
systems technology.
PANAMA
The government's decision to
liberalize the economy and the
implementation of a major
privatization program
increased the market potential
for consulting services in
Panama.
Future consulting
requirements will focus on key
sectors such as the
environment. The preservation
of the Panama Canal
watershed is a priority. Also,
cleaning of Panama bay,
another multi million dollar
environmental project will
require a substantial amount
of consulting services. Other
promising areas for consulting
services are public health,
financial management for the
government, information
technology, justice
administration, and urban
development.
Market Data ($ millions)
1997 1998 1999)
Total Market Size
23.0 27.0 33.0
Total Local Production
6 8 10
Total Exports
0 0 0
Industry Structure Factor conditions
Government is
considering reducing that to
35%.
Several local firms provide the
services but demand is
growing rapidly, particularly for
municipal and public
administration offices.
Inetrnational donor financing
of technical training should
continue to promote a demand
for these services.
Competitive pricing is a factor
in obtaining public and private
contracts
According to local
procurement laws, contracting
of consulting services is done
through public bids. Bidders
are pre-qualified with regards
to their international
reputation, with a subjective
evaluation by a panel as to
general expertise. Financial
strength and experience are
also taken into consideration.
In the public sector, consulting
contracts are usually financed
by international development
banks, supporting structural
reforms in the economy.
USAID is also involved in
financing projects dealing with
the environment and
administration of justice.
Consultants initiating work in
Panama typically enter into a
joint-venture agreement with a
local firm, so as to simplify
start-up by sharing resources.
The market for consulting
services has been clearly
dominated by U.S. firms, and
is expected to remain so in the
foreseeable future.
175
 Demand conditions Industry Structure Factor conditions
Total Imports
17 19 23

ARGENTINA
The executive training market Market is dominated by US
fluorished in the 1990’s. firms . The Argentine taste for
Today, it is a large market with US management style
60% of all professionals taking provides a competitive
some type of executive advantage to US subsidiaries
training course. Projections in in the country.
1999 and 2000 indicate a total
growth of 16 percent.
Source:http://www.usatrade.gov/ccg

176
 Appendix I
List of International Associations of Management Consultants

Africa Latin America

Federation of African Consultants (FEAC/FECA) Federacion Latinoamericana de Asociacionoes
PO Box 1387 De Consultores (FELAC)
01 Abidjan Suipacha 552 , Piso 4 Of. 1
1008 Buenos Aires Argentina

Europe Interregional
European Federation of Management Consulting International Council of Management Institutes
Associations (FEACO) (ICMCI)
1-5 Avenue de la Joyeuse entrée 32/33 Hatton garden
1040 Bruxelles London EC1N 8 DL
United Kingdom

Europe
European Foundation for Management Development
(EFMD)
40 rue Washington
1050 Bruxelles

177
 Appendix J
Strengths and Weaknesses
Strengths
Firm Infrastructure ♦ Local consultants offer services at
competitive costs as compared to their
foreign counterparts
♦ Growing number of local firms that
develop partnerships and affiliations
with reputable foreign consultants
who are interested in establishing an
office and entering the Philippine
market
♦ Availability of information technology
resources which enables consultancy
firms to access information on market
opportunities worldwide
Human Resource ♦ Management consulting firms attract
Development competent people, whose work is on a
part-time or per project basis. These
people are mostly attracted to the firm
because of exposure to companies
and projects and flexibility of time
rather than the salary
♦ Presence of Filipino consultants who
have a very strong educational
background, relevant industry
experience, and international
exposure/training
♦ Trainability of Filipino consultants
♦ Computer literacy of Filipino
consultants
Technology ♦ Integration of information technology in
Development the services of large players
Procurement (People ♦ Hiring of some consultants, especially
Weaknesses
♦ Many of the local consultants
either focus only on a
particular niche or a small
portion of the market, so
business gets affected when
they compete with foreign
companies that offers full-
service.
♦ Funds are not adequate to
enable local consultants to
market services abroad where
personal presence and
networking is needed.
♦ Relatively few linkages with
inernational groups,
associations abroad that would
enable firms to ease entry of
Filipino consultants in foreign
markets
♦ Lack of financial capability
to maintain regular staff
♦ Great disparity of rates
provided for Filipino
consultants as compared to
their foreign counterparts
♦ Lack of qualified individuals in
specialized areas
♦ Lack of full-time management
♦ Slower growth and
development of smaller firms
to integrate IT into their
services
♦ Too star-struck by academic
fads and fashions, which are
usually based on ideas that
have some merit but whose
value and applicability in the
local setting may be different
as compared to countries in
the West, where these ideas
usually come from
♦ Some of the employees hired,
178
 Strengths Weaknesses
and Information) experts, are on a per project-basis use management consulting
which leads to lower costs of firms as a training ground and
maintaining people eventually leave the company
♦ High turnover of people who
may eventually be employed
by client companies or by
other consultancy firms
♦ Difficulty in access to updated
and reliable information
especially those data related to
the Philippines

179
180