ECONOMY

Transparent consulting

During the past decade, consultants have become a main factor in the implementation of the various EU-funded Community Support Framework (CSF) programs. They also have played a considerable role in the numerous efforts to modernize and privatize state-owned utilities. They have been catalysts of change in the private sector, managers and agents of modernization in the public sector and significant facilitators of Greek business activity in the Balkans, Turkey and the Black Sea region. The consultants market in Greece is now worth 190 million euros annually, with most of the turnover coming from the public sector. A survey by KANTOR consultants forecasts an average annual growth rate of 10 percent for the next three to four years. However, the small size of consultancy firms, even of the so-called «big ones» does not allow any essential investment in knowledge production and, in general, does not boost their competitiveness. Competition among small consultancies, combined with a reduction in fees, has led to a degradation in the level of services provided and undermines the sector’s prospects for healthy long-term growth. The public sector, the consultancy market’s biggest client, must create better conditions, for that will lead to a healthy consultancy market and enhance its effectiveness. The present situation must change in the following ways: A) The relations between consultancy companies and the public sector should be regulated on a new basis, which would ensure the effective, and mutually beneficiary, operation of consultants. B) The State must support Greek consultancies’ efforts to offer their services to international development organizations, such as the World Bank and the European Bank for Reconstruction and Development (EBRD). Consultancies should also be more widely involved in Greece’s plan for the reconstruction of the Balkans and the creation of Hellas Aid. C) The consultancies themselves should step up their efforts to upgrade the quality of their services, organize more effectively and capitalize on their knowledge base. They should also retain their independence, the cornerstone of their existence and operation. To achieve the above targets, the public sector, along with the Association of Professional Consultants (SESMA) must adopt as soon as possible a professional code of practice. The code should define the framework of cooperation between the two parties, clearly spell out the criteria for smooth and effective cooperation and guarantee each party’s respective interests. Similar codes on the framework of cooperation between consultants and the public sector have been defined by most consultants’ associations in Europe, or relevant articles have been included in their codes of operation, given that the public sector is a very important client throughout Europe. Specifically concerning consultancies, the professional code clearly defines the way their experience and know-how is used (copyright issues), the required skills of consultancy personnel, the pricing of services, the design and implementation of projects, the quality of services offered and risk management. Participation criteria Moreover, the code defines the criteria for the participation of consulting firms in public sector projects, depending on their financial ability and credibility. For example, a consultancy’s average turnover for the past three years should be at least double the budget of the project it bids for. This would lead the public sector not to tender for consultancy projects with excessive budgets for the means of the domestic market. The code would define the public sector’s obligations relative to the processes followed and the terms for tendering out consultancy projects, including taking final delivery of the completed project. For example, following standards set out in other eurozone countries, public sector bodies are obliged to pay consultants on time, otherwise, the latter have the right to charge interest on any payment due. In conclusion, the structural changes and the new challenges the Greek economy faces require a new relationship between the State and consultancy firms based on transparency, credibility and effectiveness. In order to achieve a quality upgrade and higher effectiveness in consultancies, a professional code of practice must be adopted. It would be of great help in the healthy growth of the sector. (1) Costas S. Kastrinakis is vice chairman of the board of KANTOR Business Consultants.