Worldwide Consulting
Critical Cross-Border Issues
By Costas P. Pappis
The issues raised in a discussion concerning worldwide OR consulting are too many to be addressed in a short presentation. One has to focus on a limited number of questions, which seem to be among the most important.
One such question is, of course, related to what is considered the effective approaches to developing new markets in a new territory. There are certainly standard practices employed, such as cooperation with a local company, but the approaches may differ from case to case.
First, it is necessary to know whom and how to contact. For example, in a market dominated by the state, one has to contact trustful persons from appropriate state agencies and organizations. International fairs may provide good opportunities. Forming partnerships with clients from the mother country that already have developed activities in a new market can open a way to that market, through accompanying and supporting their activities. Cooperating with international auditors, who know what and where problems exist, can also help identify opportunities for consulting across borders in prospective new markets.
Should you set up a local office or operate from a distance? It seems that the answer to this question is not necessarily to choose either one or the other. It may prove more appropriate to initially operate from a distance, then set up a local office (point of reference) with local staff, but with management from headquarters, and try to find alliances.
OR practitioners should be aware of local cultural sensitivities, codes and habits, as these may heavily influence several aspects that are crucial to the success of a project. Religion may be a very important issue. Other issues may be aesthetics, working hours, local organizational structures and codes of contact, language etc.
Due to globalization, there are sectors where new opportunities have appeared for consulting across borders, irrespective of location. Such sectors include electronic transactions, logistics, banking and commerce. However, particular sectors may be more promising than others depending on location and time. Examples of such sectors are banking for Panama, transportation for Rumania and construction for Yugoslavia. Some areas of the world seem to have greater need for particular OR applications or approaches (e.g., foresting in Malaysia, agriculture in developing countries).
International prestige in obtaining projects is very important. Branded companies (like Arthur & Little, Coopers, Arthur Andersen, KPMG, Deloitte & Touch and Ersten Young, to name a few) claim a large part of the market pie due, in large extent, to their international prestige.
The issue of prestige is related to credibility. Credibility in a new market is guaranteed, should a consulting agency be able to select the projects it undertakes and have neither time nor budget limits! However, this is not quite the reality in actual markets. Usually, client organizations make decisions based on cost and completion time, in addition to consultant's experience.
Then how is credibility gained? Usually by results, i.e., by delivering to the client what has been promised. This is subject to parameters not always controlled by the consulting agency. Such parameters, which might negatively affect projects, include political changes (especially for projects in the public sector) and currency fluctuations (especially for the private sector). In other words, in order to be successful, a project also needs to be lucky. In any case, credibility is not the only parameter on which the success of consulting depends. Business consulting (including OR consulting) needs to continuously create new markets and be on the "cutting edge," given that the concept of "life cycle" applies also to OR technology and applications. Of course, having interdisciplinary capabilities is always helpful and sometimes indispensable for successful consulting (e.g. information systems plus logistics plus finance for ERP consulting). Commitment of top management, availability of the company's people, and sufficient budget and time are also critical factors in making a contract successful.
There are many differences in practicing OR in different places (one might say that there are no commonalities). The differences may refer to issues like the level of analysis, scope, feasibility, competition, laws and institutions, but also to issues like local support and bribes. Also, different methods or techniques may be favored for the same problem depending on location. For example, "hard" OR methods are favored when enough data is available, while "soft" methods are the only applicable ones if data is lacking.
Specific special obstacles to implementation of OR solutions in across-borders consulting may include, among others, language, different accounting systems, local laws and regulations, various bureaucratic obstacles, etc. Working in other cultures may present one with difficult cultural or ethical situations — bribing is one of them. Local technical support is necessary in an implementation in the public sector, advisable in the private one. However, sometimes the issue of trustfulness may arise.
To conclude, the OR profession seems to have contributed significantly in consulting across borders and helping solve organizational and operational problems in the public and private sectors of modern societies, including those problems appearing in the way of globalization. OR is global by its very definition. However, issues of a more general concern, like those related to the most fundamental needs of humanity, including social justice, welfare for all people, freedom and sustainability seem to have not acquired top priority in the criteria of conducting this profession. Fortunately, this discussion has recently been opened in the OR community.
Costas P.Pappis is a professor in the Department of Industrial Management at the University of Piraeus, Greece. He has consulted for several international companies.
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