amcf paris keynote sept 2006

Global Perspectives:The Economic and Professional Services Environment

Surfing when the world looks flat

Looking at the Shape of Consulting in 2010

John ParkinsonChairman, ParkWood Advisors, LLC

November 30, 2005


© ParkWood Advisors LLC, 2005All Rights Reserved

Slide 2

About John Parkinson

30+ years in technology 20+ years in consulting Published author (four books)

and columnist (CIO Insight) World’s top 25 most influential

consultants (2003) Computerworld 100 Leaders in

IT (2005) Retired head of Innovation and

Strategy at Ernst & Young LLP (September 2001)

Retired CTO of Capgemini (July 2005) [email protected]

+1 847 235 1791



Slide 3

Copyright notice and disclaimer Copyright notice and disclaimer

ParkWood Advisors LLC, 2005. All rights reserved.Reproduction or translation of any part of this work, beyond that permitted by Section 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to John Parkinson, at the address given above.

This presentation is designed to provide accurate and authoritative information in regard of the subject matter covered. It is made available with the understanding that the intent is not to render legal, investment, accounting or other professional advisory services.

If investment advice or other expert assistance is required, the services of a competent professional person should be sought.



Slide 4

Today’s agenda

Three common concerns and two thoughts from the past

Some root cause analysis Where the market is today and

why advisors still matter Five issues for profitable growth The world in 2010 A manifesto for an agile advisor Three ideas for the next five

years



Slide 5

Three common concerns

Growth ahead of the market

Defending and improving margins

Managing risk

How did this happen?



Slide 6

Two thoughts from the past

“Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm”. “So much of what we call management consists in making it difficult for people to work”.



Slide 7

Root cause analysis

Too many of our ideas are not strongly correlated to business value

Strategic advice is often undifferentiated

Operational advice is becoming a commodity

We are slow to react to emerging needs

We are too rooted in the history of Economics 1.0

PROBLEM



Slide 8

Where the market is today

85 95 00 02 05 08

Pro

du

ctivity

Efficiency Inside the Business

Efficiency Along the Value Chain

We are here

We are here

Uncertainty

Planning Trajectory

Reality

Expectation Gap

Early adopters shorten the expectation gap by switching curves ahead of the market…

We must avoid being trapped between ‘S’ curves as families of enabling ideas and practices evolve

Based on work by Geoffrey Moore and Clayton Christiansen

Disruptive Innovation



Slide 9

Why advisors remain important

Where most of the advisor budget

gets spent – because that’s

where the processes and

technology that really runs your business resides

Where attention should be

focused if you want maximum

potential advantage

Proprietary Advantage

Diminishingadvantage

Weakadvantage

You don't get much advantage from the same ideas and practices everyone else has



Slide 10

Five issues for profitable growth

1. How can we correlate our advice with improved business performance and what (if any) is an appropriate “share of risk and reward”?

2. If “competency leverage” is to replace “capacity leverage” for most firms, what is the “right size” for a consulting firm?

3. If public markets are increasingly short term casinos what’s the appropriate ownership and capital structure for a consulting firm?



Slide 11

Five issues for profitable growth

4. If “reputation” matters, how do we design attractive careers for the majority of our (mostly unknown to the market) staff?

And

5. How will we deal with the continuing commoditization of competency and experience by the major business software vendors?



Slide 12

The world in 2010

It way be our money, but it’s not going to be our culture, laws, expectations or control

Google rules: Information is everywhere but is it true and does it matter?

There are some critical “ends” in sight, but we still aren’t paying enough attention

Economics 2.0 is breaking out all over

“Disaster” recovery is an increasingly common services requirement



Slide 13

A manifesto for an agile advisor?

We are uncovering better ways of delivering practical advice by active participation in improving our clients performance and helping others develop and execute ideas.

Through this work we have come to value:– Individuals and interactions over processes and tools– Working processes over comprehensive documentation– Customer collaboration over contract negotiation– Responding to change over following a plan

That is, while there is value in the items on the right, we value the items on the left more



Slide 14

Three ideas for the next five years

Solve the continuous change management problem

Learn to work with Economics 2.0

Build a rational strategy for sustainability

“I don’t know what it is but you need a new one”



Slide 15

Conclusion: Find the magic

“Where there is mystery there is margin”

John Jordan

“Any sufficiently advanced idea is indistinguishable from magic”

Adapted from Arthur C Clarke

amcf paris keynote sept 2006

Business

years parkwood advisors

risk parkwood advisors

rights reserved slide

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business efficiency

investment advice

profitable growth

practical advice