Management consulting can greatly contribute in boosting the Egyptian economy and transforming Egyptian companies until they can compete against major international firms.
What is management consulting?
Fundamentally, management consultants advise their clients on how to earn and/or save more money. How do they do it? In just one sentence, consultants apply a scientific approach in decision-making. They analyse several layers of information gathered from different sources, then provide insights and recommendations based on already proven frameworks that ensure best business decisions. Once decisions are made and goals set, consultants assist their clients in implementing the solutions to reach desired goals.
What makes the success of management consultants is the scientific approach they adopt to solve their clients’ problems.
Basically, a consultant acts as a medical doctor for businesses by recommending solutions to solve their problems. That is why consultants became the privileged partners of successful firms, performing different assignments such as strategic planning, transformation projects, or post-merger integrations.
Thanks to its role as a performance booster, management consulting is widely used in all developed countries, as much as lawyers and financial accountants. The management consulting industry generated $139 billion of revenues in 2017, according to Statista.com.
Management consulting can create a lot of highly qualified jobs much needed in Egypt, and work with Egyptian universities to prepare their students for modern jobs.
According to the International Labour Organisation (ILO), around 20 percent of Egyptians with an advanced level of education are unemployed and about 35 percent of youth are still looking for a job. These figures are on the rise compared to 2011.
The management consulting industry can highly contribute to improve employment rates of highly qualified youth. It is known to be a great pool for job creation, particularly for fresh graduates. For example, 16.5 percent of fresh business graduates in France choose to start their career in a consulting firm, according to Le Figaro.
Consultants can also increase their collaboration with Egyptian universities to prepare students for modern jobs by improving their professional skills.
Egyptian authorities support the development of business advisory services
Conscious of the positive impact on the Egyptian economy that management consulting and advisory services in general generate, several governmental initiatives were launched to make them more accessible to Small and Medium Enterprises (SME). For example, up to 95 percent of the cost of consulting services can be directly paid by the Industrial Modernisation Centre (IMC), which operates under the Ministry of Industry. Other governmental initiatives were launched to assist different types of SMEs, particularly by the minister of investment.
Several funding opportunities are also proposed by international development funds to aid SMEs in accessing consulting services.
All these initiatives contribute in increasing the size and reach of consulting services in Egypt, which in return will contribute to unleashing the potential of Egyptian companies.
Egyptian expatriates can reproduce in Egypt the successful development of management consulting services in GCC countries, creating jobs and generating export revenues.
Dubai became an international consulting hub, serving GCC countries and beyond, reaching African and South Asian companies. The development of the GCC region in the last 20 years required large numbers of consultants, whose assistance highly contributed to accelerating the growth of the region. The GCC management consulting market was estimated at $2.8 billion in 2017.
Why is the management consulting industry lagging in Egypt?
Egyptian expatriates can assist Egyptian companies to be more competitive by bringing international standards of management. A strong management consulting industry in Egypt can become an additional source of foreign currencies as consulting services can be easily exported to other countries.
Building a talent pool in Cairo will drive international consulting firms to consider Cairo more seriously as a hub for their teams to benefit from the cost advantage of Cairo compared to Dubai.
Developing consulting services is a matter of national interest
On a macro level, consultants play an important role in modernising the economy by diffusing best practices, whose effectiveness has already been proven in other industries or markets. The strategic partnership recently signed between Egypt and the UAE to transform Egyptian governmental services is a good example of such benefits. Consultants in different areas will be responsible for transferring knowledge from the UAE to Egypt.
They will select the best solutions, and adapt and explain them to Egyptian counterparts. The approach used to modernise Egyptian governmental services can also be applied to all Egyptian companies by transferring knowledge from Europe or the GCC region.
Benefits expected from management consulting
By leveraging complex skills and knowledge, management consultants provide very high value-added services that generate benefits much larger than clients’ expectations. Consultants are strongly committed to assist their clients in reaching their targets and demonstrate leadership skills to drive change.
Working as accelerators, consultants can achieve in six months what normally takes a year. Learning about what is happening elsewhere, and what the gaps are, is extremely valuable for clients. Consultants provide new ideas to avoid confirmation bias and to challenge the existing status quo. Clients benefit from industry experts as consultants for all kinds of issues.
The improvement of internal resources performance is one of the most regularly observed benefits of management consulting missions. Clients have a large choice of transition scenarios to choose from, along with end to end assistance. All risks are identified by consultants to ensure the best-informed decisions are made by their clients.
Management consulting services represent great investments
Management consulting services should be considered as investments and not as operational expenditures. Transforming a company means higher future returns, which will cover any expenses incurred. The generally observed Return On Investment (ROI) of management consulting missions is estimated at around 300 percent.
In addition, management consultants are experts in cutting costs for their clients, which can be considered as another cashflow stream, justifying consulting fees.
To sum up, management consulting will be a real booster for the Egyptian economy, particularly during the upcoming period of expected economic growth. Consultants can accompany family businesses in becoming international corporates, following the example of Orascom, El-Sewedy and others. Thanks to funding by government and international institutions, management consulting services are also accessible to SMEs.
Other benefits of management consulting include being a rich pool for job creation, offering interesting career opportunities for highly qualified fresh graduates as well as Egyptian expatriates who want to return to their home country. Developing a strong consulting industry will allow the export of high value-added services and be a source of much needed hard currency.
* The writer is a banking expert and management consultant.