Behind the making of a €500-million IT consulting giant
BearingPoint’s Irish operation is participating in a major management buyout (MBO) of the Big Four consultancy giant’s EMEA practice, creating a €500-million international business led by Peter Mockler.
BEARINGPOINT, formerly known as KPMG Consulting, has instigated an MBO. What factors led to this move?
This goes back some years to 2001 when SEC (US Securities and Exchange Commission) decided that big consulting firms should separate. KPMG separated out its consulting division and we became BearingPoint in 2002.
The US division embarked on a lot of acquisitions and ran into problems, while the European and EMEA divisions were always profitable. The US divisions filed for Chapter 11 in February. The European leadership team was approached by the global CEO who asked us if we would be interested in an MBO if the main creditors in the US would agree to sell BearingPoint on a global basis.
My goal has always been to keep the European practice together and I believe that putting managing directors of specific divisions in charge of their businesses is the best way to operate a professional services firm, as a real partnership.
The Irish practice has specific skill sets that can be used across the EMEA business – what are these skills?
The Irish practice is in a unique position in terms of combining management consulting skills with technology. It is a perfect example of how to use technology in financial services and the public sector to generate value for clients. Combining financial, management and technological skills will be the basis for our future.
What is your ethos for the newly bought out European practice? Do you plan acquisitions?
For the next two to three years, we are going to focus on organic growth. There are no acquisitions planned in the near future. But we are seeking to have strategic alliances, particularly when it comes to delivering on projects in geographies like the US. We are in talking to potential strategic partners about this.
One of the key technology resources the Irish practice has is around agile development. What is this and why are firms using it?
Agile development is a technology process designed to deliver IT faster and more cost effectively than traditional software implementation.
A lot of companies create custom software when working on projects and what we do is speed that up by saving software in byte-sized chunks, so that we can apply new projects faster.
We have implemented this in the public and private sector here and found people adapt quickly. This is a far more productive way of deploying IT. The days of working on a project over two years are gone. People want to build and see results in six months.
The MBO will mean restructuring of BearingPoint in Europe. What cost reductions are you predicting?
Our overall goal is to keep all of our 2,800 professionals. But what we intend to do is streamline the so-called administrative infrastructure due to the fact that we are no longer part of a company listed in the US.
We intend to reduce all costs, including IT, by 30pc in the next year. Part of our overall development programme is to keep a close eye on what’s happening in the market and foresee trends around IT.
By John Kennedy
Photo: Peter Mockler.