Association of Management Consultants of Serbia Decanska 8, 11000 Belgrade office@amcserbia.rs www.upks.org or www.amcserbia.

com

TABLE OF CONTENTS

FOREWORD BY UPKS PART I: SUPPLY SIDE 1.1 METHODOLOGY 1.2 KEY FINDINGS 1.3 RESEARCH RESULTS 1.3.1 PRODUCTS AND SERVICES OFFERED 1.3.2 STRUCTURES USED FOR CONSULTANCY INDUSTRY 1.3.3 USERS, NON-USERS AND CONSULTANTS 1.3.4 MARKET BARRIERS AND OPPORTUNITIES 1.3.4.1 PRICING AND VALUE 1.3.4.2 BUILDING AND MANAGING A CLIENT BASE 1.3.4.3 MARKET FORCES 1.3.4.4 FREE TRADE AND EU ACCESSION 1.3.5 IMAGE AND UNDERSTANDING PART II: DEMAND SIDE 2.1 METHODOLOGY 2.2 KEY FINDINGS 2.3 RESEARCH RESULTS 2.3.1 PRODUCTS AND SERVICES DEMANDED 2.3.2 USERS OF SERVICES 2.3.3 CHARACTERISTICS OF ENGAGEMENT WITH CONSULTING COMPANIES 2.3.4 AWARENESS OF CONSULTING COMPANIES AND INDIVIDUAL CONSULTANTS 2.3.5 PERCEPTION OF DEVELOPMENT OF CONSULTING SERVICES MARKET SECTORS 2.3.6 IMAGE AND SOURCES OF INFORMATION PART III: FUTURE TRENDS AND NEEDS 3.1 THE FUTURE OF DEMAND 3.2 THE FUTURE OF SUPPLY 3.3 PROJECTIONS FOR THE CONSULTING INDUSTRY ANNEX A: DEFINITIONS OF MARKET SEGMENTS

3 4 4 5 7 7 9 11 12 13 14 16 18 20 23 23 24 26 26 27 27 29 30 31 33 33 34 36 37

FOREWORD BY UPKS

1 2

http://www.ipsos.com/Country_Profile_Serbia http://cromer-group.com/

PART I: SUPPLY SIDE

1.1 Methodology

Sample 1: Providers of Consulting Services

Definitions of all investigated market segments are presented in Annex A (page 39)

1.2 Key Findings

General Observations about Consultants

Projecting the Direction of the Consulting Industry

Obstacles to Survival and Growth

Client Consultant Relationships as Obstacles

Services Offered: Services Sold

Perception of Development of Serbian Market of Consultancy Services by Users and Providers

Main Barriers in Communication between Users and Providers of Consultancy Services

1.3 Research Results

Consulting Specialties

TOTAL PART

MAJOR

MINOR

NOT A
PART

MEAN SCORE

Export Promotion Consulting Services

Innovation, partnership and CSR

Sales Organizational Development, Human Resources Management and Leadership Communications, marketing, branding PR, Market research and analysis Education, management and other business Support services IT

System Management Consulting

Legal and Contractual Services Auditing, Accounting, Tax Advisory and Financial Services

10

20

30 Clients

40 Consultants

50

60

70

Size of the Business or Organization

Number of Employees

Ownership of Business or Organization

Independent Consultants

Profile of a Consultant or Consulting Company

Consultancies as SMEs

Consultancies as Early Adaptors

Serbian Agency for Small and Medium Enterprises, 2008 Annual Report

1.3.3 Users, Non-users and Consultants

Awareness of Specific Consultants:

94% 83% Know Don't know

59% 41%

18% 6%

Total

User

Non user

Auditing, Accounting, Tax Advisory and Financial Services System Management Consulting Legal and Contractual Services Communications, marketing, branding, PR, market research and IT Organizational Development, Human Resources Management Education, training and other management and business support Export Promotion Consultancy Services Sales Innovation, partnership and CSR Other

41% 17% 13% 12% 8% 8% 8% 5% 4% 2% 3%

1.3.4 Market Barriers and Opportunities

1.3.4.1 Pricing and Value

2007.
Not engaged consultants Up to 1000 1001 to 5000 5001 to 10000 10001 to 50000 50001 to 100000 Over 100000 Not known how much is paid for them Refusal

2008.

2009.

17% 5% 20% 9% 4% 2% 3% 17% 24%

11% 7% 23% 7% 9% 3% 3% 18% 21%

1% 13% 25% 11% 10% 4% 3% 16% 17%

Pricing Decisions

Potential Factors

TOTAL IMPORTANT

EXTREMELY (4)

NOT VERY (2)

NOT AT ALL (1)

MEAN

1.3.4.2 Building and Managing a Client Base

Customer Communications

Responsive to Customer Needs

Client-Consultant Communications

1.3.4.3 Market Forces

Most Significant Obstacles for Businesses in Serbia

Financial Obstacles for Business in Serbia

Corruption and Lack of Transparency

Perceptions of Fairness for Different Types of Tenders

Perception of Corruption Stifles Competition?

1.3.4.4 Free Trade and EU Accession

Free Trade and EU Ascension: Role of International Community

Potential Markets: IPA

Cooperation with EU Clients

Familiarity with CEFTA

Perceived Benefits from CEFTA

Problems with Non-Tariff Barriers

Problems with Technical Barriers of Trade

Questions about CEFTA

1.3.5 Image and Understanding

Through a Referral Prior experience of working together Personally know client Consultant sent proposal to client's tender Consultant contacted client directly Consultant contacted through an institution 0 10 20 30 40 Clients 50 60 70 80 90 100

Consultants

Consultants Success: Client Satisfaction and Quality Service

Contributing to economic growth of Serbia Knowing that people who work with me are fulfilled with their work Profit

Client's satisfaction
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100 %

Most important Somewhat important Somewhat not important Least important

Direct Benefits Resulting from the Engagement of External Consultants

Reduction of deadlines for delivery Reduction of costs Increased volume of business Development of knowledge Development of business operation 0 10 20 30 40 Yes No 50 60 70 80

Users and Non-Users Image of Consultants

PART II: DEMAND SIDE

2.1 Methodology

Sample 2: Users and Non-Users of Consultancy Services

The field work lasted from January 11 to January 29, 2010.

2.2 Key Findings

Spontaneous Awareness of Consultants

Demand for Consulting Services

Characteristics of Hiring Consultants

Perception of Development of Consultancy Services Market

Use of External Services/ Products (outsourcing) in General

Key drivers for hiring consultants

Future Company Needs

Image Section and Source of Information

2.3 Research Results

2.3.1 Products and Services Demanded

Auditing, Accounting, Tax Advisory and Financial Services Legal and Contractual Services System Management Consulting IT Education, training and other management and business support services Communications, marketing, branding, PR, market research and analysis Organizational Development, Human Resources Management and Leadership Sales Innovation, partnership and CSR Export Promotion Consultancy Services 3%

66% 12% 21% 37% 18% 36% 15% 34% 12% 26% 24% 18% 6% 14% 6% 10% 12% 9% 56%

Users Non users

Auditing, Accounting, Tax Advisory and Financial Services Legal and Contractual Services System Management Consulting IT Education, training and other management and business support services Communications, marketing, branding, PR, market research and analysis Organizational Development, Human Resources Management and Leadership Sales Innovation, partnership and CSR Export Promotion Consultancy Services 3% 8% 5% 25% 31.2% 24% 29.2% 21% 25.3% 12% 14.9% 11% 12% 8% 10.4% 38% 32.5%

54% 48% 48.1%

Demand Engagement

2.3.2 Users of Services

2.3.3 Characteristics of Engagement with Consulting Companies

2007.
Not engaged consultants Up to 1000 1001 to 5000 5001 to 10000 10001 to 50000 50001 to 100000 Over 100000 Not known how much is paid for them Refusal

2008.

2009.

17% 5% 20% 9% 4% 2% 3% 17% 24%

11% 7% 23% 7% 9% 3% 3% 18% 21%

1% 13% 25% 11% 10% 4% 3% 16% 17%

94% 83% Know Don't know

59% 41%

18% 6%

Total

User

Non user

Auditing, Accounting, Tax Advisory and Financial Services System Management Consulting Legal and Contractual Services Communications, marketing, branding, PR, market research and IT Organizational Development, Human Resources Management Education, training and other management and business support Export Promotion Consultancy Services Sales Innovation, partnership and CSR Other

41% 17% 13% 12% 8% 8% 8% 5% 4% 2% 3%

Auditing, Accounting, Tax Advisory and Financial Services Legal and Contractual Services Communications, marketing, branding, PR, market research and analysis IT System Management Consulting Education, training and other management and business support services Sales Organizational Development, Human Resources Management and Leadership Export Promotion Consultancy Services Innovation, partnership and CSR 2.4 2.5 2.3 2.6

3 2.9 3.1 3 2.9 2.7 3.5 3.4 3.2 3.2 3.1 2.9 4 3.9 3.9

4.1

Users Non users

49%

User

35% 10% 6%

Positive Neutral Negative

44%

24%

Non user

9% 24%

Don`t know, can estimate

Sources of Information about Consulting Companies / Independent Consultants

65% 69%

Internet

User

24% 18% 20% 6%

Recommendation

Business and professional magazines

38% 21%

Advertising of consultants

Non user

6% 12% 3% 3%

Informing through associations and organizations Fairs

users and non-users of consulting services.

PART III: Future Trends and Needs

3.1 The Future of Demand

8%

Smaller need
49% 30%

User
13% 3%

The same situation Bigger need

47%

Non user

12% 38%

Unable to estimate this

in 1 year Auditing, Accounting, Tax Advisory and Financial Services Legal and Contractual Services IT Sales Education, training and other management and business support Communications, marketing, branding, PR, market research and

in 3 years

in 5 years

45 12 33 18 16 3 10 12 10 12 8 18
3 9 6 12 6 13 18 Non user 15 18 6 28

38

47 24 32 18 18 3 12 12 18 12 20 15

User

3.2 The Future of Supply

Consultants: Optimistic about the Future

Consultants: Where They Would Like to Grow Their Business

3.3 Projections for the Consulting Industry

Annex A: Definitions of Market Segments