European Federation of Management Consultancy Associations
2004 Issue 1
FEACO Activities
As of 1 May feaco has five new EU members. The upcoming General Assembly of the Presidents of feaco member associations in Prague, on 8 June, will form an excellent occasion to welcome the new countries and celebrate the accession. Also non-member associations from the new Member States and other candidate countries are kindly invited to attend this event.
2004 was expected to be a quiet electoral year on European level, during which the focus would lie on the accession, the European Parliamentary elections on 10-13 June, finalisation of the European Constitution and the new European Commission, which will be seated on 1 November. The upcoming European elections are important to the management consultancy profession. The Parliament and its Members are direct interlocutors of feaco as they play an important role in the EU legislative process, which forms the basis of over 80% of national legislation.
Overall, but particularly for the services sector, the year is all but quiet, with Commission policies increasingly geared toward the Lisbon goal of making Europe the most competitive knowledge based economy in the world by 2010. It has been recognised that business services can play an important role in attaining this objective, and as a result the business services sector has become the center of attention. All needs to be done to make this a competitive, healthy sector, optimally suited to improve the competitiveness of Europe as a whole. However the services sector is charcterised by diversity, and care needs to be taken that the different interest, stemming from this diversity, are taken into account in the development of policies, action plans and regulations. feaco is closely following the developments in this area and has enrolled in a number of Commission working groups to safeguard the interests of the management consultancy sector.
A recent benchmarking reporton progress toward the Lisbon goal revealed that progress is not as slow as generally said, but a lot of work remains to be done. All stakeholders now seem to be commited to reach this objective, although it is doubtful that the 2010 deadline will be met.
The European Commission has established a new High Level Group which should give new impetus to the strategy. The group's mission is to assess the instruments and methods used to date and to involve Member States and stakeholders more closely to ensure the Lisbon objectives can be delivered. A number of Open Consultations have been launched to obtain input from stakeholders on competitiveness related issues such as taxation, transparency on standardisation of services, a new innovation action plan on the new Support Programme for Entrepreneurship and Enterprise Competitiveness and well as a number of Company Law issues (see below under EU issues of interest).
The feaco/SESMA International Management Consultancy Conference entitled Building a competitive knowledge based European economy with consultants, which will take place in Athens from 21-23 October, will focus on the Lisbon objective and in relation to this, the value of key service sectors and the value management consultants bring to key sectors of the economy.
The event will enable consultants from a wide variety of countries and companies to exchange views and network, in order to become part of an increasingly better integrated European management consultancy market.
The Conference Programme and registration form will shortly be available on the FEACO website
FEACO News
Management consultancy market
The EU's economy picked up in the second half of 2003 and this trend continued in 2004, but not at the rate that was expected in 2003. Most western European Markets expect 0-1% growth rate for 2004. Particularly the Nordic and German speaking markets appear to have stagnated. Central and Eastern European Management Consultants all expect their national markets to grow, at growth rates diverging from 3 to as much as 12%.
The IT market appears to be recovering rapidly. Government spending across the world caused IT and business process outsourcing to continue to grow in 2003. In Europe e-Government spending is expected to boost the IT market further.
Changes is associations and FEACO
FEACO welcomes the following new association representatives and extends its gratitude to those who are leaving, for their active involvement and contribution to our activities:
:
- Mr. Franco Guazzoni, Board Member of the Italian association Assoconsult and Partner of Core Consulting, who will replace Mr. Mario Miraglia of SEGOS Italy and former FEACO Chairman as the representative for the Italian association on the FEACO Executive Committee.
- Mr. Antoine Beuve-Méry, Board Member of the Belgian association Ascobel and Partner of IBM Belgium, who will replace Mr. Philippe Claeys of PWC as the representative for Belgium, on the FEACO Executive Committee.
- Mr. Eduardo Cachudo Nunes who has replaced Mr. Fernando Rolin as the Director in charge of subjects related to FEACO in the Portuguese association APPC,
- Mr. Tero Kauppinen who has replaced Mr. Sakari Pitkänen as President of the Finnish association LJK,
- Ms Erja Nuottimaki who has replaced Ms Liisa Nakari as Secretary of the Finnish association LJK,
- Mr. Peter Andreou has replaced Mr. Chris Michaelides as the President of the Management Consultancy Association of Cyprus,
ECIC, the European Community Institutions Committee
FEACO/EFCA initiate results in modification of External Aid Guidelines
At the 13 February 2004 meeting with the Permanent Representations, FEACO and EFCA (consulting engineers) jointly explained that the requirement for documentation from all bidding firms at the 'expression of interest' stage is excessive. It imposes an unjustifiable burden on both the consultants and the contracting authorities, and is particularly onerous for consortia with several firms involved. The Federations’ position was that only the successful bidder should produce the documentation required before the signature of the contract. The Permanent Representations endorsed this position of the consultancy industry. Moreover, they offered to address the issue with the Commission and their respective Ministries. The continuous joint lobbying efforts and the additional support of the Permanent Representations had the desired effect. As from 16 April 2004 only the successful bidder has to provide the documentary evidence. The change has been announced on the EuropeAid website.
This rule will substantially facilitate the work for applicants as well as for the contracting authorities, and the ECIC is particularly pleased that this suggestion has been put into practice so rapidly.
The ECIC would like to draw your attention to the fact that the new legislative package on public procurement has been adopted and published.
The package consists of two Directives, namely a Directive on coordination of procedures for the award of public supply contracts, public service contracts and public works contracts ("classical" directive), and a Directive on coordination of procurement procedures of entities operating in the water, energy, transport and postal services sectors ("utilities" directive).
The legislative package was first tabled by the Commission in the year 2000 and came about after extensive consultations with contracting authorities and businesses and long discussions between the Council and the Parliament. ECIC contributed a Position Paper to these discussions. The package has two main objectives. The first is to simplify and clarify the existing Directives and the second is to adapt them to modern administrative needs by, for example, facilitating electronic procurement and, for complex contracts, by introducing more scope for dialogue between contracting authorities and tenderers in order to determine contract conditions.
The rules will only apply to contracts worth more than the relevant threshold laid down in the Directives. Should a contract's value be below the threshold, the contracting authority must still abide by the general EU principles of non-discrimination and transparency. The Directives say what information must be included in the contract notice and what selection and award criteria can be used.
The Directives will need to be written into national law within 21 months of publication, (30 April 2004) i.e. before 31 January 2006. It should be noted that these are Directives, meaning that they leave some degree of liberty to the Member States as to how they want to include this into their national law. For instance, the Directives state that:
“In order to take account of the different circumstances pertaining in Member States, Member States should be allowed to choose whether contracting authorities may use framework agreements, central purchasing bodies, dynamic purchasing systems, electronic auctions or the competitive dialogue procedure, as defined and regulated by this Directive.”
On electronic auctions, the ECIC had defended that these should not be allowed for the purchase of intellectual services, such as management consultancy services, as this would result in bargaining, and eventually in the reduction of the quality of services, whereby in most cases the authority may not be able to judge the difference in quality, and thus run counter to the interests of the contracting authorities and the community as a whole.
The Directive clearly states that electronic auctions may not be used for intellectual performances (Ref. point 14 Preamble; Article 1, definition 7)
A second issue of particular interest concerns the definition of 'particularly complex contracts'. The conditions under which a contract can be considered as 'particularly complex' determine the scope for the use of the so-called ‘competitive dialogue’ between contracting authorities and tenderers in order to determine contract conditions. ‘Competitive dialogue’ is a procedure in which any economic operator may request to participate and whereby the contracting authority conducts a dialogue with the candidates admitted to that procedure, with the aim of developing one or more suitable alternatives capable of meeting its requirements, and on the basis of which the candidates chosen are invited to tender. For the purpose of recourse to the procedure mentioned in the first subparagraph, a public contract is considered to be ‘particularly complex’ where the contracting authorities find it objectively impossible to define the means of satisfying their needs or of assessing what the market can offer in the way of technical solutions and/or financial/legal solutions.
Also the use of the negotiated procedure, which may only be used under exceptional circumstances, and whereby the contracting authorities consult the economic operators of their choice and negotiate the terms of contract with one or more of these, is allowed for services,inter alia services within category 6 of Annex II A, and intellectual services such as services involving the design of works, insofar as the nature of the services to be provided is such that contract specifications cannot be established with sufficient precision to permit the award of the contract by selection of the best tender according to the rules governing open or restricted procedures.
For more detailed news on ECIC issues and recent activities see the ‘ECIC Feedback Notes’ on
Association News
Hungarian association organizes Central and Eastern European associations workshop
To mark the upcoming accession to the EU, VTMSZ, the Hungarian association, has taken the initiative to organize a meeting between Central and Eastern European associations. Thirty representatives from ten Eastern European countries (Bulgaria, Bosnia-Herzegovina, Croatia, Czech Republic, Hungary, Poland, Romania, Russia, Slovenia), Turkey and Germany discussed similarities and differences in their consulting markets at a workshop in Budapest on March 26. The conclusion of the discussions confirmed that the management consulting sector is alive and growing fast in the Central European countries and that the enlargement of the EU presents a huge challenge and great opportunities for the consulting companies in the region.
In the early years of transition, business focused on consulting services related to privatisation and public market projects. Most countries in the region have now passed this phase and the emphasis is shifting towards the private sector and services such as business strategy, organization development, human resources and IT consulting. Outsourcing has become a key driver of the industry development.
Participants reported a considerable change in paradigms in consultancy during the past years. The beginning of the 90s was characterized mainly by advice type work, whereas today clients ask not only advice, but for also implementation and operation services.
In this context, consulting firms in Eastern-European countries have to change rapidly to maintain their competitiveness. Speed, quality, value added and comprehensive solutions are going to be key in following years. For press release see:
Anniversary: 50 years BDU
On 27 February the BDU officially celebrated its 50th anniversary. To commemorate this happy event a number of activities are organised throughout the year, culminating in the main event: the Beratertag, which will take place from 30 September to 1 October in Wiesbaden. For more information see:
Management Consultancy Awards in Austria and the UK
Both the Austrian association and the UK association celebrated the national consultancy awards. For more information and participation form see: (Austria) and (UK). This type of event constitutes and excellent promotion of the management consultancy profession.
EU Issues of interest to the management consultancy industry
BUSINESS RELATED ISSUES
Competitiveness – Lisbon agenda
Benchmarking report 2004 on the Lisbon Strategy
A new survey on the Lisbon Strategy and Business Priorities in EU-25 by the Confederation of Swedish Enterprise reports that not all Member States fare as badly as commonly thought on the Lisbon goal of making the EU the most competitive global economy. Some countries have achieved a very high performance in several key areas. While the UK, Ireland and the Nordic countries are well on track and even outperform the US in the fields of high-tech, innovation and labour market reform, others need to push through urgent reforms to improve their competitiveness.
The report joins other studies in painting a rather gloomy picture of the state of European competitiveness, but acknowledges that there has been progress in some important areas such as the development of a competitive high-tech sector and the liberalisation of key markets including energy.
The results show that overall, the EU is still lagging behind the US in areas that are considered crucial to long-term growth. In particular, the report starts from the premise that heavy regulation and high taxation give European companies a disadvantage in global competition and that, as a result, Europe is facing a very serious risk of de-industrialisation.
Lack of reform of labour markets and in taxation are holding up progress of many countries, including France and Germany. Moreover, increased investment in research and education, more flexibility within and between companies and entrepreneurship are urgently required.
While the relatively high level of education and strong growth rates give raise to optimism, the legacy of old industrial investments, environmental damage and poor public administration could present major obstacles to sustained growth. The report praises the new Member States for taking the Lisbon agenda seriously, and even maintains that they might well outperform some of the older Member States by 2010.
Competitiveness – establishment of high-level group –
The Commission has established a high level group, headed by Mr. Wim Kok, former prime minister of The Netherlands to give new impetus to the strategy of making Europe the most competitive economy in the world. The group's mission is to assess the instruments and methods used to date and to involve Member States and stakeholders more closely to ensure the Lisbon objectives can be delivered. The group will be made up of 13 leading figures, representing different stakeholders such as trade unions, business, political authorities and academics. The group's report is expected to be published on 1 November 2004. It is designed to help the Commission prepare proposals for the mid-term review of the Lisbon strategy to be included in its spring report to the European Council in March 2005.
Open Consultation on new Action Plan: Innovate for a Competitive Europe
To improve competitiveness, productivity, added value and growth, Europe needs more innovation. The Enterprise Directorate-General is developing a new innovation action plan to address the main market deficiencies that currently hamper innovation in European enterprises. In this context an open consultation is welcoming contributions from innovation stakeholders throughout Europe.
The Plan will mobilise resources and rally the Member States around ambitious common objectives, while placing the enterprise at the centre of innovation policy. It emphasises the importance of both technological and non-technological innovation, including new business concepts and organisational or presentational innovation. It also takes account of the all-embracing nature of innovation, aiming to create the basis for an efficient dialogue among all innovation stakeholders, policy-makers, regions, research, civil society and enterprises.