NelsonHall recently attended BearingPoint’s analyst event in Lisbon. As it starts its second decade with a new Managing Partner (Kiumars ‘Kiu’ Hamidian, only the second in the company’s history), the strategy that has served BearingPoint well in its first ten years is now evolving in ways that reflect significant developments in the nature of the consulting market.

In its first decade as a company since the 2009 MBO, BearingPoint has been something of a success story in the European management and IT consulting market, achieving sustained topline growth supported by geographic expansion, and steady improvement of its EBIT margin. 2017 revenues were up 13% to €712m, with growth in all geographies and service lines, and the firm is well on its way to achieve its targeted €1bn revenues by 2020.

Key elements of strategy

Elements of BearingPoint’s strategy in recent years that remain key pillars going forward include:

• The ‘One Firm’ mindset, with a common set of offerings and consistency of delivery methodologies across geographies
• The focus on clients headquartered in Europe, achieving a ‘global reach’ to be able to support them in projects outside Europe through an alliance ecosystem (West Monroe Partners in the U.S., ABeam Consulting in Asia, Grupo ASSA in LATAM)
• The business model, comprising:
  • Strategy, made up of four service lines: digital & strategy, finance & regulatory, operations, IT advisory
  • Solutions: the Solutions unit, launched in 2015, has three product lines: IP in regulatory technology, in particular fintech (e.g. its Abacus suite); advanced analytics; and digital platform solutions for the CSP and entertainment sectors (based on Infonova R6, now offered on AWS)
  • Ventures, a more recent capability; e.g. an investment in Norwegian insure-tech start-up Tribe in April 2017. Also includes employee ventures, typically coming from its ‘Be an Innovator’ initiative, and client ventures, emanating from consulting projects with start-ups
• Selective acquisitions, for example in 2017 of retail supply-chain specialist LCP Consulting in the U.K., and an automotive consulting unit in Italy
• An increasing emphasis in recent years on innovation, e.g. the introduction of the ‘Be an Innovator’ process and of shark tank events.

Forward-looking priorities

While BearingPoint’s next five-year plan has yet to be finalized, Hamidian outlined four priorities in the following dimensions:

• Markets
• Portfolio
• People
• Culture.

Markets

BearingPoint is looking to build up capabilities in several European countries, including the U.K. (where the practice is relatively small, focusing on sectors such as financial services) and the Netherlands. In terms of headcount, BearingPoint remains very focused on Germany and France, and has product units in Austria (ex-Infonova) and Switzerland (Abacus): the ambition is to have a minimum of 300 people in each of the major European markets. Outside Europe, BearingPoint is also looking to work with its partners to expand its presence in the U.S. and China, including Singapore, where it has a joint hub with ABeam Consulting in Asia focusing on IP-based reg-tech projects.

Portfolio

There is a very clear drive to shift from the classic process redesign work of traditional consultancy services and focus much more strongly with clients on projects that leverage IP assets, and are more transformational in nature (for example, looking at new business models). The role of the Solutions unit is critical in this. Since January, the unit has had its own P&L and regional managers, encouraging, inter alia, entrepreneurialism in both product development and GTM.

In addition to some well-established assets around reg-tech (for which it is best known), the unit has also developed IP such as its Factory Navigator, which simulates production and logistics processes; LOG 360 vehicle emissions calculation, built on SAP HANA; and Active Manager, used for coaching and training front-line managers, e.g. in call centers, to be more active/effective. All are SaaS-based offerings. One of the clients presenting to whom we spoke is a very strong advocate of Active Manager, having implemented it at a major telco and subsequently introduced it in his next role in a different sector.

Expect to see further developments to the portfolio, including industry-specific solutions. But the strategic element lies in the intersection between Solutions and Consulting – the aim is for consulting projects and also managed services increasingly to have embedded IP. 

As well as its own IP, BearingPoint is looking to increasingly position around its abilities to orchestrate an ecosystem of technology partner alliances: having started with Salesforce (now a Platinum partner), the emphasis has expanded to RPA and AI and emerging technologies such as blockchain. The last two years have seen a large increase in the number of technology partnerships, and more are to be expected.

The role of the Ventures unit is also important here. While BearingPoint also refers to employee ventures, most coming from its ‘Be an Innovator’ initiative, and to client ventures, emanating from consulting projects with start-ups, the primary focus is on market ventures. It is working with incubators such as LeVillage in Paris and weXelerate in Vienna (see our 2017 blog here) and hosting events like the BearingPoint Insurance Dialog in Cologne that offer speed dating opportunities for early stage start-ups. A recent investment was in Insignary, a South Korean startup with a binary level open source software (OSS) security and compliance scanning solution, BearingPoint’s first investment in an Asian start-up. BearingPoint is leveraging Insignary’s Clarity solution to offer a managed SAST (static apps security testing) binary scanning service in Europe.

The expansion of IP-based services is a key element of BearingPoint’s Digital & Strategy (D&S) offering, which we note has new leadership.

People

BearingPoint’s new Managing Partner has spoken repeatedly about his desire for the firm to provide a very positive employee experience, an important element in both the recruitment and retention of younger talent. Other priorities he has expressed include increasing the firm’s diversity, of generation as well as of gender (one target is 20% female Partners by 2020), and talent development. We do not know the age or experience profile of BearingPoint personnel, but we do detect a desire to have a workforce that is perhaps more balanced in terms of age and experience, and a slight shift away from a traditional consultancy profile.

We also note an evolution in leadership style with a stronger emphasis in transparency and communication: several personnel mentioned in conversation that Hamidian encourages colleagues to email him and is responsive when they do.

Culture

As part of its ambition to change the nature of much of its consulting work beyond operating model improvement to projects that have more radical transformation in mind, BearingPoint is looking (like many consulting and IT services firms) to nurture a culture where entrepreneurialism and innovation are encouraged (for example through initiatives such as shark tank events), and overall to become a more agile organization.

Hamidian is also looking to develop partners’ management and team leadership skills through initiatives such as new partner training programs.

Summary

In its first decade since the MBO, BearingPoint has succeeded in putting in place a strong foundation of an integrated European consulting firm that can claim, through its strategic partnerships, to have a more global reach. The next five years will be marked, not by global expansion, but by an evolution in positioning, with an increasing emphasis on services that leverage its own and partners’ IP to assist clients in their digital transformation, potentially also boosting margins. Expect to see more partnership announcements around IP-based offerings; shortly after the event, for example, BearingPoint announced its regtech product unit and IBM is partnering to offer a BPO service around regulatory reporting to smaller institutions in the DACH region.

Expect also to see an increase in tuck-in acquisitions of small firms operating in its target geographies (including the U.K.) that bring in industry domain and or specialist capabilities. Again, shortly after the event, BearingPoint announced its acquisition of Inpuls, which brings in capabilities in data governance and analytics and also doubles its headcount in Belgium.

As a final note, there were several aspects of the analyst day that stood out from other vendor events we have attended recently:

• The total absence of PowerPoint presentations, with a heavy focus instead on clients telling their stories and describing how BearingPoint has supported them
• The level of female representation (roughly 50% of the speakers) – an all-too common experience is that the only female speakers at analyst and advisory events are those from clients. Large organizations in Europe and the U.S. are increasingly demanding a level of female representation from suppliers bidding for work in certain areas of professional services; for a variety of reasons, lack of gender diversity in the talent mix will increasingly be an impediment in IT and consulting services). The level of female representation was doubtless a deliberate move; gender diversity is clearly a high priority.