Editor: In 2004, Edwin Sim
established Human Capital Alliance,
Thailand’s Premier Executive Search
& Senior Advisory Firm. Between 1997-2003, Edwin Sim was Managing Partner
of Korn Ferry Thailand. This article was
first published by the Nation in July 2001.
K I Woo looks at how transaction-oriented professional service
providers are shifting their focus to building client relationships.
Coming out of the financial
crisis, Asia ’s multinational professional service providers are changing
their strategic focus.
During the economic boom,
major international law, accounting, architectural and engineering, management
consulting and executive recruitment firms only had to sit in their offices
while their phones rang off the hook. They spent most of their time deciding
which potential clients to call back.
As the crisis tightly gripped
the country, many professional service providers switched gears and became
restructuring specialists. Forced to restructure or go out of business, clients
continued to run to them. Business for professional service providers continued
to boom during the crisis. They ainly focused on handling short engagements as
their clients fought to use their services.
Today, as the crisis winds
down, many multinational service providers operating in the region are again
switching gears. Although many major consulting
firms have cut back their restructuring operations and sent scores of
foreign specialists home, other firms are expanding in Thailand by finding
growing niche markets such as systems formulation, implementation and
integration.
However, most professional
service providers are in a state of flux.
During the past eight years,
the booming US economy acted as the world’s growth engine. Today, with the US
and European economic experiencing slowdowns, and the Japanese economy
continuing to slumber, there are few external factors to drive small regional
economies.
Closer to home, professional
service providers are forced to adjust their operations as their clients
prepare for an uncertain economic environment. During the boom times and the
recent critical restructuring period, many large companies routinely hired
professional service providers on a contractual basis when they needed them. If
the firms wanted a specific problem studied and rectified, they would call in a
professional service provider.
Today, major multinational
companies as well as Thai companies are no longer satisfied with this type of
arrangement. “These companies are now demanding a higher level of service,”
said Edwin Sim, managing director and country manager Korn Ferry Thailand .
Major Thai companies that have
virtually completed their restructuring processes are now looking at how they
can best implement their new strategies and visions during this time of uncertainty,
Sim said. “They are now demanding that service providers give them continuous
consultative services.”
Companies that managed to
survive the economic crisis are no longer comfortable calling service providers
just to handle emergencies. “In a more uncertain economy, no CEO wants to fight
unnecessary fires, which can be prevented with solid strategic planning and
incisive policy implementation,” he said.
For the previously
transaction-oriented service providers, the adjustment from transaction-based
services to relationship-based services will mean new challenges. However,
service providers such as lawyers, accountants, executive recruiters and other
management consultants can invariably create a win-win situation for themselves
as well as their clients.
In the long run, the service
providers will be able to spread client acquisition costs over a customer base
that uses more of their products and services. Clients benefit because they
experience a more hands-on partnership with their trusted service providers.
Rather than fighting fires when problems arise, the service providers are
constantly available because under a retainer, they are continuously advising
senior management during critical strategic policy formulation and
implementation activities.