PA Consulting Group

PA Consulting Group Ltd.
Employee-owned
Industry Management Consulting
Founded 1943
(Personnel Administration)
Headquarters London, UK
Key people
 Marcus Agius, Non-Executive Chairman
Alan Middleton, Chief Executive Officer
Andrew Hooke, Chief Operating Officer
Revenue £423,010,000 (2014)
Number of employees
 2,636 (2014)
Slogan PA: Consulting, Technology, Innovation.
Website www.paconsulting.com

PA Consulting Group is a consultancy specialising in management consulting, technology and innovation. It has clients in both the private and public sector including local and national Governments and the defence sector. It has offices in Europe, the Nordics, the United States, the Persian Gulf and Asia Pacific[1] and operates as an employee-owned company.[2]

History

1940-1950

Founded in 1943 as Personnel Administration by three Englishmen: Ernest E. Butten, Tom H. Kirkham and Dr David Seymour. Britain's war effort created great demand for munitions and goods, which had to be produced by a relatively unskilled workforce. Butten and his colleagues formed Personnel Administration Limited to provide advice to industry as to how to improve the productivity of their workers.[3][4] Like the other three firms that dominated consulting in the 1940s, 50s and 60s, PA was an offshoot of the pre-war Bedaux Company.[5] Bedaux in turn had been developed from the time and motion 'scientific management' theories of Frederick Winslow Taylor and Frank Gilbreth. Butten sought to take the mechanistic and task-orientated concepts of scientific management and add a human dimension to them. The chief idea, along the lines of Douglas McGregor's 'Theory Y', was that by involving the worker in the process of change and a suitable form of ownership, greater gains could be made both by the worker and the organisation.[6]

PA's first assignment was to train housewives to assemble the tail gun section for the Avro Lancaster bombers, as part of Britain's policy of bringing women into the factories in order to free-up male workers for the armed forces.[4][7] By 1964 the company had dropped the name Personnel Administration and was known as simply PA Consulting Group.[8]

1950-1970

PA expanded over the next 20 years, and by 1970 it was one of the world’s largest management consulting firms by headcount (closely followed by Booz Allen and McKinsey).[9] staff can buy shares with deferred elements to bonus, 80% own them. PA had also expanded geographically, mostly along the lines of the Commonwealth: with its operation in Australia providing about a third of the firm's revenue.[10]

In the 1960s PA diversified its business significantly by developing the use of the 'newspaper box' advertisement for recruitment.[10]

Butten retired from PA in 1970, having earlier sold his 100% shareholding in PA to the Butten Trust in 1958. The Trust was intended as a long term guardian of PA's fortunes and an assurance that the company would be 'owned by the employees'.[11]

1970-1992

PA's position in the industry deteriorated drastically over the following quarter century, as competitors such as McKinsey and the newer strategy consulting firms (such as Boston Consulting Group and Bain) redefined the concept of management consulting. While there were occasional years with strong revenues, the company was never very profitable. The only strong area of business during this period was PA's work advising companies on potential applications of technology to business issues. Arising out of this success, major technology centres were built in Melbourne, UK and Princeton, USA.[12]

Towards the end of the 80s, after an upsurge in the industry, PA's management decided it wished to take the firm public. The Butten Trust, after an application to the courts in the UK, agreed to give 15% of its shares to its employees, as part of a long-term plan to float. However, the company suffered in the subsequent consulting industry downturn of 1989 to 1992 and, by the end of that downturn, PA was essentially bankrupt, with some £30 million (US$57 million) of debt, significant annual losses and a rapid outflow of staff.[9][12]

1992-2007

Between 1991 and 1994, PA reduced its workforce by almost half. In 1992, Jon Moynihan was appointed as chief executive of PA, with a remit to turn the company around. With a new strategy, aggressive cost-cutting, an industry upturn, the turnaround succeeded and in 1995 PA made record profits.[13][14]

Jeremy Asher became group CEO in 1998, and during his three-year tenure PA grew from about 2,500 staff to just under 4,000.[15][16] The firm expanded significantly in the United States through the acquisition of Hagler Bailly Inc. in 2000 for around $96 million in cash.[17]

PA revenues suffered during the consulting recession of 2001-2004, but saw a significant recovery between 2004-2006, which helped them to increase its focus on ventures and 50% of PA's return to their main shareholder over the years 2002-2006 came from non-consulting activities.[18] This included the sale of a number of subsidiaries including UbiNetics, Volume Product Technology, and Meridica.[7] By 2005, the company was ranked 8th in the Sunday Times list of Britain's Biggest Mid-Market Private Firms.[19]

2007-present

In 2008, PA suffered a high profile loss of a USB data stick containing Home Office information on prisoners that led to the Home Office cancelling the firm’s contract.[20] This loss followed a string of other high profile data losses by other UK government contractors,[21][22] prompting the Home Office to review its contracts[21]

PA continues to work for a range of public and private sector clients. Government figures released in 2010 showed that the company was the second largest beneficiary of UK Government contracts to consulting firms, receiving £11million over the first year the coalition was in office.[23] It has gained publicity for its work on analysing what it has called the zombie economy.[24][25] Other work includes its annual survey of opinion in higher education,[26] and ongoing technological innovations including a new type of round kitchen towel.[27]

On 31 December 2013, Jon Moynihan retired as executive chairman,[28] and was replaced by Marcus Agius, the former chairman of Barclays Bank.[29] In March 2014 the company launched a new logo (the third in its history), a new visual identity and redesigned website.[30] Also in March, Health Select Committee member Sarah Wollaston MP questioned how PA Consulting came to be given the entire NHS hospital patient database for England which it then uploaded to Google Maps, whose servers are based outside of the UK.[31]

Technology and innovation

The company has a strong focus on technology dating back over fifty years. Its Cambridge Technology Centre was founded by Professor Gordon Edge in 1970[32] and played a critical part in creating the Cambridge Phenomenon where the city became a leading centre for the UK’s technological companies.[33]

Innovations developed at the centre over the past 50 years include: the original brushless servo motor; medical injectors that mean the patient does not need to see the needle; a self-monitoring device for people with diabetes that measures blood glucose levels; micrometers; and 4G wireless test equipment.[4]

PA ventures

PA's venture programme (PAGroup Ventures) was established in 2000 to exploit the ideas and intellectual capital generated from its consulting work. It was seen as unusual in continuing this approach after the dotcom boom led to other companies withdrawing from this business.[34]

PA recent ventures include a third-generation mobile phone business called UbiNetics that was sold for a total of $133 million in 2005;[35][36] and Meridica - a drug delivery system company – that was sold to Pfizer for $125 million in 2004.[37] PA demerged its venture arm, Ipex Capital, in June 2008 although it continues to work closely with the company.

PA’s current ventures include:

Exacsys, which develops solutions to improve Point of Care (PoC) diagnostic systems. One application of this technology is the self-monitoring of blood glucose (SMBG) to help people manage their diabetes.[4]

ProcServe, which provides a cloud-based procurement system. The ProcServe Trading Network covers more than 17,000 organisations and is used by central government, and the National Police Procurement Hub, as well as commercial sector customers including Orange and Xerox.[38]

References

  1. ↑ PA Consulting Group vault.com
  2. ↑ Swinson, Jo (4 July 2013) Jo Swinson: Time has never been more important for employee ownership Co-operative Press
  3. ↑ The story of the PA Consulting Group 1943-1992, Christine Jackson and Mark Smalley
  4. 1 2 3 4 Pagano, Margareta (30 January 2011) A perfect partnership between the geeks and suits The Independent
  5. ↑ Kipping Matthias Management Consultancies and Organizational Innovation in Europe in Pérez, Paloma Fernández and Rose, Mary (Eds) Innovation and Entrepreneurial Networks in Europe p.66, Routledge, 2009. ISBN 1135213801
  6. ↑ Ernest Butten Obituary - The Times (London, England), Tuesday, 26 March 1985; pg. 14; Issue 62096.
  7. 1 2 Power, Helen (15 August 2008) Britain's biggest private companies: Expertise at your service The Daily Telegraph
  8. ↑ The Times Monday 1 June 1964, p.19, Issue:56026
  9. 1 2 Hill, Andrew (11 November 2013) Change ripples through fish tank FT.com
  10. 1 2 The story of the PA Consulting Group 1943-1992’, Christine Jackson and Mark Smalley
  11. ↑ The Times, 26 March 1985, Ernest Butten obituary
  12. 1 2 The story of the PA Consulting Group 1943-1992’, by Christine Jackson and Mark Smalley
  13. ↑ Inspirational Chief works wonder for PA Consulting, Sunday Times 7 March 1999
  14. ↑ Hill, Andrew (22 December 2013) Jon Moynihan, the consummate consultant FT.com
  15. ↑ 2 November 1999 (Tewksbury) PROFILE: JEREMY ASHER - This man enjoys watching his employees run in accountancyage.com
  16. ↑ Jeremy Asher - Executive Profile Business Week | Tower Resources Plc
  17. ↑ (20 June 2000) Company News; Hagler Bailly agrees to purchase by PA Consulting The New York Times
  18. ↑ PA Annual Reports, 2002, 2003, 2004, 2005, 2006
  19. ↑ Britain's biggest mid-market private firms - The Sunday Times (London, England), Sunday, 9 October 2005; pg. 6[S9]; Issue 9450.
  20. ↑ Hope, Christopher (10 Sept, 2010) Prisoner data blunder firm PA Consulting loses multi-million Government contract The Daily Telegraph
  21. 1 2 (22 August 2008) Firm 'broke rules' over data loss BBC News Online
  22. ↑ Hutt, Rosamond (10 Oct 2010) MoD stunned by massive data loss The Independent
  23. ↑ Hope, Christopher and Quilty-Harper, Conrad (19 November 2010) Coalition spends more than £200million on consultants, PR and marketing The Daily Telegraph
  24. ↑ (13 November 2012) 'Zombie' companies eating away at economic growth BBC News Online
  25. ↑ Ahmed, Kamal (7 November 2009) Zombies are lurking on every high street The Daily Telegraph
  26. ↑ Garner, Richard (24 June 2013) Up to 30 universities 'could close or face merger' because of government reforms and dwindling student numbers The Independent
  27. ↑ Chapman, Jenny (11 December 2012) Brains Factory - from bomb disposal . . . to paper towels Cambridge News
  28. ↑ (10 June 2013) UPDATE: PA Consulting Group Executive Chairman Jon Moynihan Announces Plan to Retire Yahoo! Finance
  29. ↑ Quinn, James (20 November 2013) Aguis to Chair PA Consulting The Daily Telegraph
  30. ↑ (4 March 2014) PA celebrates 70 years of innovation with new logo re-branding theconsultant.eu
  31. ↑ Ramesh, Randeep (3 March 2014) NHS England patient data 'uploaded to Google servers', Tory MP says The Guardian
  32. ↑ Professor Gordon Edge - 1990 brunel.ac.uk - Brunel People
  33. ↑ Quested, Tony (12 June 2013) Cambridge Tech Consultancies Rule the World businessweekly.co.uk
  34. ↑ Advisers harness home-grown ideas,. Financial Times 1 September 2005
  35. ↑ (25 May 2005) UbiNetics test arm sold to Aeroflex electronicsweekly.com
  36. ↑ (28 July 2005) CSR buys 3G software firm Ubinetics electronicsweekly.com
  37. ↑ (23 September 2004) COMPANY NEWS; PFIZER ACQUIRES REST OF MERIDICA FOR $125 MILLION The New York Times
  38. ↑ http://www.localgovernmentexecutive.co.uk/news/digital-procurement-could-save-councils-millions-20139955

External links

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