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The war in Ukraine is an ongoing source of disruption beyond the immediate crisis, both in terms of human lives and the global market. The devastation is reaching far out of the contested territory as markets grapple with geopolitics and a possible economic downswing.
It’s hard to determine what kind of long-term effects this conflict may have, but certain trends have already cropped up that hint at a rise in demand for consulting services across all major service lines.
In our post-pandemic world, stability has become a myth. Businesses must stay prepared for uncertainties all the time and constantly evolve to stay relevant amid fast-changing market conditions. And all these have to be done, keeping environmental sustainability in mind. In this situation, consulting is going to play a critical role in dealing with these disruptive factors.
World-Changing Disruptions Would Influence Every Organzation’s Scenario Planning
The outbreak of war in Ukraine has already disrupted the world, reshaping industries and economies. The longer it lasts, the more complicated the situation would turn. As economies shift and multiple industries come under strain, businesses may seek consulting more than ever to get holistic solutions that cross business domains, navigate complex geopolitical infrastructures, mitigate a volatile risk landscape, and more.
To remain competitive in this new era of volatility, organizations would need consulting to innovate, implement agile client-centric strategies, invest resources in forward-looking technologies and adjust their core approach to problem-solving.
The need for specialized knowledge and global expertise within consulting organizations would be paramount to navigating these disruptions and advancing the strategic agenda.
So, what are these disruptions? Let’s have a look!
#1. Huge Humanitarian Crisis
The war in Ukraine has led to major disruption throughout the consulting world, as the humanitarian crisis has drastically altered the way consultants interact with clients. The conflict has forced some firms to rethink their strategies when engaging with people affected by the crisis, while others have had to work tirelessly to ensure their presence in the region remains timely and helpful.
To stay competitive in this field, it is essential for consulting firms to be able to adapt quickly and tune into the needs of those suffering from displacement or other issues caused by political unrest.
As such, many have adopted more innovative approaches to working in fragile nations and closely monitor trends that may affect supply lines or other on-the-ground infrastructure necessary for successful client engagements.
While these are difficult times for those living and working in Ukraine, it is inspiring to witness the agility and resilience of consulting firms as they rise to meet these challenges head on and strive towards a better future for all.
#2. Sustenance of Various Industries Under Threat
The war in Ukraine has caused more than just political unrest – it has drastically changed the global consulting industry and put into question the sustenance of various industries.
This disruption has particularly affected businesses whose customers come from unstable and vulnerable economies, leading to severe shortcomings in their structure. As a result, those consultants who have invested heavily into working with clients from such countries are now experiencing the brunt of their losses.
In order to rebuild trust with their customers and strengthen their relationship further, consultants must work hard on creating a secure environment for business dealings.
It is essential that corporates recognize the severity of this situation before any meaningful progress can be made towards restoring stability in the consulting industry.
#3. Disruption in the Global Food Production System
The escalating conflict between Ukraine and Russia has caused ripples across the global food production system that have stretched from farmlands to dinner tables. The industries in both countries have been strained, resulting in a third of the world’s ammonia and potassium exports going offline or heading in the wrong direction.
Couple this with Ukraine and Russia supplying nearly a third of total global wheat and barley exports, two thirds of sunflower seed oil exports and one sixth of corn supplies – it has become clear that there is an apparent lack of essential food ingredients in most parts of the world.
However, governments are now putting into effect various programs to counteract this disruption, such as directing more supplies to regions affected the most, boosting local production with incentives schemes, subsidizing consumers and imposing price controls where needed.
#4. Value of Resilience in Supply Chain Management
The Russian invasion of Ukraine has underscored the value of resilience in supply chain management. Even before this, managers had begun to shift their focus away from maximizing efficiency and instead made preparations in case of emergencies.
The conflict has added even more urgency to the search for alternate supply sources, as raw materials may become increasingly concentrated due that hostile environment. To stay competitive and avoid potential disruptions, businesses must rethink their supplier structures and create a reliable network of suppliers who can handle the higher level of demand.
This does not have to mean losing out on efficiency; instead, it represents an opportunity for companies to hone their processes and make them more robust than ever before. Moreover, the war in Ukraine is one more challenge pushing leaders to reconfigure their supply chains and prepare for uncertainty.
#5. Separation in Global Technology Standards
With the expansion of digital technology, many countries have found themselves engaged in an ever-evolving battle to protect their citizens from unmonitored content. Even prior to the war, numerous countries had attempted to bring online censorship to a new level by limiting what individuals can see and access via their connected devices.
To make competition even more rigorous, different nations have sought out ways to promote chosen hardware standards or replace protocol regulations imposed by opposing parties. From the telecoms realm through to the vastness of cyberspace, geopolitical tensions only intensified as the world went further down a path filled with technological diversification.
Furthermore, after foreign conflicts emerged, boundaries became even more pronounced as some countries established financial limitations, while Western corporations simultaneously severed ties with Russia.
As such, this sizable exclusion distinguished it from being part of the global high-tech value chain thus underlining just how wide apart many countries remain in terms of their willingness and approval of digital technology-related policies.
#6. Effects on the Financial System are Uncertain
Despite the initial shock that markets have experienced, it appears that the direct impact of the war on the financial system is quite limited. Financial institutions are quite well capitalized and, therefore, able to weather any losses in the near term. Although this may provide some relief, greater problems may yet arise from various ripple effects stemming from the conflict.
Instability within emerging-market countries, further funding issues in China’s property sector, interruptions in payment processing and a higher risk of default in shadow banking credit all present new risks to asset prices which banks and other participants in the financial system are now forced to confront.
How these issues resolve remains uncertain for now; however, it is clear that such threats cannot be overlooked moving forward.
#7. Increase in Cyberattacks
Cyberattacks are becoming an increasingly major issue for societies around the world as infrastructure is increasingly targeted. According to the Center for Strategic and International Studies, ten significant cyberattacks occur each month on average.
Recent examples of this damaging activity include ransomware attacks in Ukrainian power systems which resulted in downtime and public websites belonging to Russian government ministries being hacked. Of course, there are also wider implications for such breaches depending on the extent to which malicious malware spreads beyond its original target.
As tensions pertaining to cyberwar rage on, companies and governments have taken steps to protect themselves from future attacks by taking measures to ensure their digital networks remain secure and safe from further harm.
#8. Economic Volatility
The war has caused economic volatility on a level unseen since before the pandemic. This comes as no surprise, with both the US volatility index (VIX) and economic policy uncertainty (EPU) index on the rise.
While such an event during wartime is seemingly unusual, previous research has revealed that this is to be expected due to increased government spending; making profits more predictable in certain areas.
But this particular war could have more damaging effects yet to be seen due to its force over energy sources and prices; which could be potentially disruptive for many sectors across the globe. It appears that the overall impacts of this war are far from over.
Areas That Need More Focus as a Result of The War
Focus is of utmost importance, especially in situations that are hard to predict. Even though each organization has its own priorities, we reckon there are some important things to focus on with regards to the war in Ukraine. So, let’s have a look at these areas that need more focus in a bit more detail.
#A. Increase and Streamline Scenario Planning
As the Ukraine War continues to affect families and cause destruction, there are some areas that require more attention. Scenario planning needs to be expanded upon and streamlined in order to better understand how the conflict is impacting people throughout the region.
By understanding these impacts, we can develop strategies that help strengthen communities, aid those affected by violence, and support long-term stabilization. Planning can often unearth solutions before they even become a problem – helping both sides find more peaceful solutions sooner rather than later in this ongoing conflict.
#B. Assessing and Modifying Operational Risks
The Ukraine War has caused many countries to reassess their own security protocols in order to make sure they are able to effectively respond to similar conflicts. It is therefore essential that governments and their departments focus on assessing and modifying their operational risks for both existing and potential future operations.
They can do this by looking into previous events, researching prevailing trends in warfare, enhanced intelligence gathering, and ensuring that adequate resources are available when preparing for potential military engagements. By taking the necessary steps now, countries can be more confident that they are well-equipped to handle any possibility of future war.
#C. Cost-control Measures
The Ukraine War has caused tremendous disruption and loss in the lives of many people, requiring extra focus and attention to certain areas if effective solutions are to be found. One such area that requires more focus is cost-control measures; for example, stricter practice of managing expenditures and better budgeting procedures need to be put in place to reduce the risk associated with the waves of spending incurred by a prolonged war.
Increased efforts and support should also go into finding ways to reduce the use of financial resources while still providing assistance to those affected by the conflict. With appropriate management strategies and careful long-term budgeting, these cost-control measures can help bring greater fiscal stability during times of war – ultimately creating a healthier economy when peace is restored.
#D. Evaluate and Carry Out Divestment Decisions
The Ukraine War has raised many tough questions about how we as a society should move forward, especially when it comes to divestment decisions. In order to alleviate the consequences of this prolonged and often bloody conflict, it is essential that such decisions are accurately assessed and implemented in a timely manner.
This will allow for targeted provisions such as humanitarian aid, an enforced ceasefire, or economic stimulus packages that could be crucial for bringing lasting stability to the region. Hasty decision-making can lead to inadequate responses and may even worsen the situation on the ground.
Now more than ever is the time to focus on ensuring sound decisions are made with long-term benefits in mind so that every action taken decisively helps build towards progress without relapse into further violence.
What Businesses Need in Order to Address these Uncertainties
The ongoing Ukraine war has been a major source of uncertainty for the global economy and business for some time now. Economic analysts have forecasted a variety of scenarios and different levels of impact that it will have in the near term, with at least three predictions for the coming years.
With tensions continuing to mount in the region and trade agreements left up in the air, businesses around the world are struggling to plan ahead or make any kind of reliable prediction while they brace themselves for what the future holds.
The most concerning dynamics involve policy alignment between Russia, Ukraine and other countries on matters such as free trade, environmental protection and international financial markets – all factors that could potentially put vulnerable economies under pressure.
As this conflict continues to unfold it is yet to be seen how much of an interruption it will be to companies operating internationally in terms of costs and profits.
So, the question is, what do businesses need in order to address such uncertainties? Let’s find out!
#1. Regulated Impact
Sanctions may have been a necessary part of resolving conflict in the short term, but their effectiveness as a long-term solution is limited. Thankfully, when it comes to negotiating a truce and averting further escalation, sanctions may be scaled back, thus eliminating future supply disruptions.
This relief has been mirrored by markets where commodity prices have returned to pre-war levels and the confidence in businesses and consumers has risen accordingly.
As a result, people feel able to return to investing and spending money as they were before the war began – an important sign of hope for the economy’s future.
#2. Continued Impact
The supply of essential goods has been significantly disrupted in 2022 due to an oil and gas embargo. As a result, prices have soared, forcing consumers to cut back on some non-essential items while businesses strive to increase their operational efficiencies.
This disruption is expected to continue as the embargo limits access of key commodities to only a select few countries. The combined effect of high prices and limited resources could lead to economic hardships for regions utilizing these commodities; however, in the long term, this could lead to cost-cutting measures and innovation which might otherwise not have happened.
The Post-Invasion Consulting Market Trends That Consulting Buyers Need to Consider to Determine the Best Consulting Services to Meet Their Need
The European consulting market has traditionally been a cut-throat industry, characterized by a number of large traditional firms and a few smaller ones competing for business. The home base of the majority of these firms is usually in countries such as the United Kingdom, France, Spain, Germany and Italy.
In many cases, clients will select one of these larger firms to assist them with their needs simply based on the size and prominence of their name, despite other consulting firms offering more tailored and granular services at competitive prices.
That being said, these large consulting firms have earned their position due to years of success in providing quality advice and services to European companies. They represent an important source of experience and expertise within the space and continue to play an integral role in providing businesses with support, strategies and insights into even the most complex problems they may face.
After the Russian invasion of Ukraine, however, consulting buyers in Europe need to consider a number of factors.
First, they will need to consider the impact on their local markets and how best to respond to any changes in demand. It may be necessary for them to switch up their strategic approach and pivot towards offering more specialized solutions if their current offerings are not suitable for clients’ needs.
Secondly, buyers should review the geopolitical landscape in order to assess if there is an emergence of new threats or opportunities that would require different approaches. They should monitor developments within their region and take into account possible economic ramifications such as sanctions or currency fluctuations that could impact their operating environment.
Thirdly, buyers should pay attention to any changes in customer preferences and behaviors due to the disruption caused by war.
In consideration of these factors, consulting buyers in Europe may have to adjust their approach accordingly and remain competitive within a rapidly changing global landscape. The scenarios mentioned above could lead customers to seek out specific solutions tailored to their needs – leading buyers to focus on smaller boutique consultancies with more specialized services as opposed to larger consultancies that offer broad-based services across multiple industries.
Finally, they should be aware of the legal implications and ensure they are working within any new regulations or laws set by regional governing bodies in response to the invasion.
The Shape of Business in DACH Regions
In recent years, the consulting market in Europe has been changing drastically. With the rise of technology and other disruptions, the center of gravity within Europe has shifted from traditional markets such as England to DACH countries—Germany, Austria, and Switzerland.
Research shows that these countries have some of the highest growth rates in terms of digital transformation and are becoming highly sought-after locations for consulting firms. Not only do they offer substantial cost savings compared to other European markets, but also have a strong talent pool for companies to draw from.
Companies are increasingly looking to DACH countries for innovative solutions to their business challenges, which further fuels growth in this sector. As the consulting industry continues to evolve, the DACH region looks set to remain a key hub for many years to come.
Despite the fact that the German, Austrian, and Swiss markets share many traits in common, each of these markets is developing at its own unique rate. Read on to find out more information about it!
The German market is a powerhouse of the European industry. It is one of the largest markets in Europe, representing 4.54% of the global economy, making it especially attractive to businesses looking to reach a broad audience.
Furthermore, UK and France cannot compete with Germany’s size and reach within the business realm—Germany undoubtedly leads the charge in terms of growth in Europe overall.
This makes it an ideal environment for developing business strategies that can make a significant impact given Germany’s large population and wealth.
The Austrian market has been driven by global forces, such as a surge in international trade and rising competition for digital services, that have resulted in many service providers relocating to this Central European country.
Austria has also made strides in terms of building up its financial and technological infrastructure and providing better incentives for businesses to operate there. Consequently, it can now offer access to reliable expertise and knowledge at competitive cost structures which makes it increasingly attractive for consultancy firms.
Overall, the changes taking place in the European consulting market resulting from this shift towards Austria are expected to be profound and long-lasting – suggesting that the country is likely to become an important part of Europe’s business landscape well into the future.
Switzerland is an incredible example of small countries making big waves. Despite being one of the smallest European nations, Switzerland has proudly asserted its presence in the region’s business landscape.
With the share of Swiss sales reaching 1.6%, its economic clout is clear and it remains a powerful player today. Unlike most EU member countries, Switzerland is not part of either the European Union or the European Economic Area – it remains an independent state and still manages to make its mark in the region. It’s a compelling testament to this country’s ingenuity, ambition, and enterprise!
In times of crisis (such as the war in Ukraine), businesses need to be especially cautious with their investments in order to secure a successful future. That is why our 6-part series on optimizing consulting ROI is incredibly valuable – it is an excellent starting point to ensure that your enterprises are utilizing effective strategies and fundamentals.
Moreover, we also have a brand-new app, Improveo, which can take your business efficiency to the next level – equipping you with data-driven insights and different levels of performance optimization. But first things first – make sure to use our resources and solutions for your business success now and for the years to come during these difficult times!