Academic journal article Academy of Strategic Management Journal

A Study on Core Business Shift from Diagnosis Service to Systems Integration Service in Major Business Consulting Firms in Japan

Academic journal article Academy of Strategic Management Journal

A Study on Core Business Shift from Diagnosis Service to Systems Integration Service in Major Business Consulting Firms in Japan

Article excerpt

INTRODUCTION

Business consulting firm is a sort of professional service firm. Many business consulting companies in Japan gradually shifted their core business from business diagnosis service into systems integration service.

As Figure 1 and Figure2 show that Nomura Research Institute, Ltd., for instance, have been increasing their employees and the ratio of IT consultant on the entire employee since 2000. Nomura Research Institute was a consulting company in Japan established by merging the think tank company (previous Nomura Research Institute, Ltd.) with Nomura Computer Systems Co., Ltd. in 1993. Accenture which was one of the world's leading organizations providing management consulting, technology and outsourcing services expanded the technology and outsourcing services including systems integration business. The ratio of the technology and outsourcing services on all their revenue reached 44% (UZABASE, 2013), as Figure 3 shows.

Consulting company, in general, is a professional service firm which provides business strategy with their customers based on established management theories and their rich experience. For instance, they provide differentiation strategy (Porter, 1980) with their customer in order to win the market and/or beat their competitors. Nonetheless a lot of Japanese business consulting companies themselves similarly seemed to execute the same strategy, because they shifted their core business from business diagnosis to systems integration.

In this paper, the reasons why the shift from business diagnosis service to systems integration service in the Japanese business consulting companies were studied from the point of their strategy, business model and forces in the consulting industry in Japan.

The remainder of this paper is organized as follows: First, the consulting industry and in Japan and its history are studied. Then research method is described and the related study is reviewed. Next hypothesis is created by combining related studies. Then, four cases are introduced and the cases are analyzed and discussed. Finally, limitations of this study and implications for future research are described.

CONSULTING INDUSTRY IN JAPAN

According to UZABASE (2014), consulting industry covers companies that offer services commonly called consulting services and financial advisory services, and provide client companies with advice on management strategies and financial strategies, as well as support for implementing such strategies.

Players are split into groups related to strategy, research, independency, IT, accounting and M&A by major domain or parent company. Players in the strategy-related group mainly deal with large companies, and solve a wide range of business challenges from planning of medium-and long-term strategies to operational reforms of individual businesses. Research-related players engage in issues similar to those dealt with by the strategy-related players, but more orders come from public sector agencies. Independent players deal with smaller companies than strategy-related players. Players in the IT-related group have a strong capability to solve business challenges like operational improvement by using application software such as ERP (Enterprise Resource Planning) package software. Accounting-related players are affiliated with an auditing firm. Players in M&A-related group specialize in M&A advisory and intermediation services. Part of this field competes with investment banking units of securities firms.

HISTORY OF THE JAPANESE CONSULTING INDUSTRY

According to our interviews for the consultants who worked or had worked for consulting companies in Japan, consulting industry in Japan began in 1966 and was in growth stage with booming economy in 1980s. At that time, accounting-related consulting companies imported a business concept to Japan market, and then they started to provide business diagnosis service and solution service including IT consulting and IT implementation. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.