This episode of the “Socrates” podcast touches on many intriguing issues surrounding the consulting industry and its growing impact in Saudi Arabia. Omar, the show’s host, engages in a deep conversation with Riad Al-Najjar, Chairman of “PwC” in the Middle East, about the transformational journey the Kingdom has witnessed since the launch of Vision 2030. The guest discusses the importance of consulting and how these firms contribute valuable expertise and successful models from around the world, while outlining the challenges they face in ensuring confidentiality and maintaining the integrity of the consulting process.
The discussion also includes sensitive issues related to corruption and negative practices that may permeate the consulting work, as well as differing perspectives on the role of consultants, whether negative or positive. The conversation additionally emphasizes the importance of knowledge transfer to the younger generation and encouraging Saudis to engage in this industry, amid calls to enhance local competencies in consulting.
Al-Najjar also addresses how to tackle the challenges arising with the evolution of artificial intelligence technologies and whether there is a genuine future for consulting amid this advancement. The guest reviews local experiences and new contracts, including the office opened in Al-Ula, aimed at enhancing community partnerships and training Saudis in necessary skills.
This podcast episode serves as an exciting window into the world of consulting and the processes that take place behind the scenes, focusing on how this industry can be a driving force for change and transformation in the Kingdom.
History of the Consulting Industry
The origins of the consulting industry can be traced back to practices associated with auditing, where companies needed to audit their accounts and performances. It all began when corporations requested external audits of their financial data, revealing the need for performance improvements and uncovering gaps. As the sector evolved, these firms began to offer consulting services that extended beyond auditing. For example, Arthur Andersen was one of the first companies to establish a consulting division, which later evolved into an independent company known as Andersen Consulting. This growth in the consulting sector saw many firms transition from providing only auditing services to offering comprehensive consulting services.
In the Middle East, PwC (PricewaterhouseCoopers) began offering its services in 1979, focusing on auditing. In the 1990s, the role of consulting began to increase, particularly with the transformation happening in Saudi Arabia under Vision 2030. Due to the rising need for consulting in the government sector, consulting firms started to play a pivotal role in achieving the strategic objectives of the government and contributing to the development of various sectors.
Over the years, consultants have become an integral part of organizational processes in the Kingdom, contributing to building local capacities and developing individual skills. This has raised awareness regarding the importance of consulting and its impact on economic and social transformations in the country.
Confidentiality and Compliance Issues in Consulting
Confidentiality and information protection issues are vital aspects of the consulting industry. Firms like PwC are required to implement strict measures to protect client data, especially when handling sensitive information related to government entities. A stringent information protection system is applied, where all data is encrypted and strict policies are enforced on employees to ensure that information does not leak. For instance, if a government client requests an employee to send sensitive information to a personal email, the system triggers an alarm to prevent this action.
Annual training for employees includes scenarios simulating situations that might lead to information leakage. Employees are required to complete tests to ensure their understanding and awareness of the importance of confidentiality. These policies contribute to building trust with clients, as clients are assured that sensitive information is well protected and that the company takes privacy issues seriously.
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to this, it cannot be considered that these measures are entirely sufficient to close all gaps. There are still potential threats, requiring companies to continue updating their policies and enhancing awareness among employees about the importance of maintaining information confidentiality.
Implementation Strategy and the Role of Consultants
The implementation strategy is considered one of the most prominent strengths of consulting firms. The role of consultants is not limited to presenting strategies only but extends to implementing these strategies in real life. Success in implementation depends on the ability to translate plans into reality, which requires specialized expertise and a clear vision. This approach is known as “strategy to execution,” where consultants begin by developing strategies and work to implement them comprehensively.
Companies face challenges during the implementation phase, as they must adapt to changing conditions and respond to unforeseen situations. For example, in a project tasked with establishing a new authority, the consultants needed not only to develop the organizational structure and processes but also to ensure that all core elements aligned with the strategic goals of the authority. This required significant effort in managing teams and directing them to ensure success in implementation, reflecting the importance of leadership and effective communication skills in this context.
Thanks to their diverse experiences, consultants can impart knowledge and expertise to local work teams, helping to build strong local capacities. For instance, in a large government project, employees were trained to manage projects effectively, enabling them to work independently after the project’s conclusion. Access to knowledge represents one of the most significant benefits offered by consulting firms, as employees are able to benefit from global best practices and apply them locally.
Challenges of Relying on Consultants
The increasing reliance on consulting firms presents many challenges. One of the biggest concerns is the loss of internal knowledge and over-reliance on external expertise. When government bodies or companies lean heavily on consultants, they may face the risk of losing the necessary skills and knowledge for project sustainability. There are also concerns that some entities may use consulting services as a quick fix without considering the long-term consequences.
Critics often point out that some companies hire consultants to transfer responsibility for strategic decisions, which can lead to unsustainability. Institutions must be aware of this challenge and seek to ensure that there is a clear process for knowledge transfer, allowing employees to learn the necessary skills to implement new strategies themselves.
Possible solutions include enhancing collaboration between consultants and local employees to ensure that there is practical experience that goes beyond theoretical consulting. By implementing effective knowledge transfer strategies, institutions can achieve a balance between utilizing external expertise and maintaining internal capabilities.
Large Companies and Their Role in the Saudi Market
Large companies such as “Big Four” consulting firms are seen as a vital part of the economic landscape in Saudi Arabia. For more than a hundred years, these companies have managed to integrate themselves into the economic fabric of the Kingdom, employing around 60% of their workforce from Saudis. These companies are viewed not only as external entities undertaking temporary projects but as part of Saudi society and contributing to its development. It is crucial to recognize that these companies invest heavily in developing their workforce’s skills, thereby enhancing the local market’s ability to adapt and grow.
There is also significant importance in the partnerships between local and international companies. At the beginning of any project, local expertise may not be sufficiently available, so collaborating with companies that have global experience is a key element for achieving success. For instance, if you are running your consulting firm, having a network of local and international experts can enhance your capacity to meet client needs efficiently. It is essential to overcome the notion of “hubris” that may lead some to believe they can do everything on their own, as teamwork brings greater benefits and achieves better results.
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Investing in the development of solutions requires long-term thinking. Companies should be concerned about what might happen in the future and listen to customer opinions regarding expected trends in the market. Investing in research and development and expanding their services is crucial for companies to ensure their sustainability and success. We must also recognize that there are several large local companies, such as “Elm” and “Thiqah,” that play an important role in the market, and collaboration with them should be enhanced.
The Importance of Data and Transparency in Consulting
Consulting involves providing clients with accurate and reliable information, but sometimes consultants’ forecasts can be overly optimistic. For example, the “CNN+” project failed just four weeks after its launch, which was partly attributed to inflated expectations from a well-known consulting firm. This incident highlights the importance of providing accurate and transparent data, as misleading information can have dire consequences for both the client and the consulting firm.
It is essential for consultants to build trust-based relationships with their clients, which sometimes requires the courage to provide viewpoints that may not be comfortable. In many cases, clients may find it difficult to accept hard truths, so the consultant needs to balance delivering reality with the client’s needs. Offering multiple options while clarifying risks and benefits can help clarify matters.
When it comes to addressing client expectations, the challenge lies in presenting facts without damaging the relationship. Sometimes, there may be misinformation or misunderstandings on the client’s part, requiring consultants to provide clarifications based on data and facts. In these contexts, it is vital for the consultant to take responsibility for delivering information accurately and objectively, keeping in mind that the client is the one making the final decision.
The consulting firms’ pursuit of exceeding client expectations is one of their core values, reflecting their commitment to high performance. This necessitates providing accurate reports, holding workshops, and supplying data that supports decision-making, helping companies take informed steps toward achieving their goals.
Challenges of Vision 2030 and Achievements Realized
Vision 2030 is considered an ambitious framework for developing the Saudi economy and achieving economic diversification. Midway through the journey, a report on the progress of the vision was published, showing significant achievements in multiple areas. For instance, substantial progress has been made in empowering women, as the percentage of working women exceeded the specified target. This is an achievement that reflects the government’s commitment to supporting women in the workforce, and it’s an example of how to achieve both economic and social goals simultaneously.
Looking at the objectives of the vision, we also find notable successes in the housing sector, where the home ownership rate among citizens is approaching 70%. This demonstrates the government’s commitment to providing suitable housing for citizens. However, there are still challenges that require more effort, such as attracting foreign investment, which largely depends on improving infrastructure.
Achieving the vision’s goals requires significant investments in various sectors, as well as amendments to laws and regulations. For example, changes in tax laws and infrastructure are vital to attracting global companies to the Kingdom. This requires coordination among various government entities to realize the desired goals.
One of the lessons learned from the first half of the vision is that the challenges we faced, such as the COVID-19 pandemic, forced the government to take swift and effective actions. By monitoring performance indicators, the government was able to make informed decisions to support affected sectors, which helped accelerate the recovery process. This proactive approach is one of the factors that contributed to the Kingdom’s success in overcoming the crisis more quickly compared to some other countries.
Future
Consulting in the Age of Artificial Intelligence
With the rapid advancement in artificial intelligence technology, many are questioning the future of the consulting industry. Artificial intelligence is a powerful tool that can enhance the efficiency of consultants by automating routine tasks that do not add real value. By leveraging this technology, consultants can focus on more complex issues that require human intervention, such as risk management and providing innovative strategies for clients.
When considering the impact of artificial intelligence on consulting, it is important to acknowledge that AI will not replace the expertise of consultants but will enhance their capabilities. The use of artificial intelligence can help save time and resources, allowing consultants to deliver higher quality service to clients at a lower cost. Instead of spending time on data collection and analysis, consultants can use AI to focus on delivering effective strategies and solutions.
Additionally, the future of consulting requires firms to adapt to rapidly changing market demands. The increasing reliance on advanced technologies means that consultants must be prepared to continuously learn and develop their skills. Technology should not be a barrier but an opportunity to enhance competencies and provide greater value to clients.
It is also important for consulting firms to adopt a culture of innovation and continuous improvement, as the ability to adapt to rapid market changes will determine their success in the future. Using artificial intelligence as a tool for analysis and forecasting can provide valuable insights and help firms make informed strategic decisions. Thus, the future should be promising and full of opportunities, provided that this technology is utilized correctly.
The episode was summarized using artificial intelligence ezycontent
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