Sharing The Vision>IPR Related;
Sharing the vision and sharing the risk
Electronics Times
Advisors are now expected to put their intellectual property where their
mouth is. Paul Dempsey reports.
The global consulting business is changing. The standing joke has long been
that these gurus will enter a firm, advise, leave and suffer none of the
consequences for getting it wrong but still pick up some very fat fees.
The wider reality, though, is that consultants are being forced into a much
more participatory role. They increasingly share the risks with traditional
companies and are also feeling a greater need to embark on expensive
research projects whether or not they have a client in place to fund them.
One of the best examples of this trend is the Hertfordshire-based PA
Consulting Group, now a global operation employing 2500 staff across 50
offices in 20 countries. It wants to make the best of its formidable
knowledge base in the new environment.
PA now offers a three-part message about its business objectives to
potential customers and partners: technological innovation, process
development and establishment/contribution of its own intellectual property
rights (IPR).
The final strand gives a very clear indication of how PA sees its business
changing.
Ali Pourtaheri, head of PA's Wireless Technology Business Unit, said:
"More and more players are demanding that you bring something to the
party. That has to be more than just a bit of advice. It is a module, it is some
IPR, and it must be able to do two things: shorten time to market and add
value.
"The first question from any serious manufacturer today might still be: 'What
is your track record in the area?' But the second will always be: 'What are
you working on right now?' No answer, no work."
However, as much as this demonstrates a response to changing market
conditions, there is also now scope for consultants to profit from R&D and
developing their own patent technologies.
In PA's case, this was illustrated on a project that had nothing to do with
electronics - the Widget. This is the little plastic gizmo filled with compressed
gas that can effectively make a canned beer pour and taste like one pulled
from draught.
PA created and now licenses the gadget to virtually every major brewer. In
the past, it might well have had the same idea, but most probably, the
intellectual property in the invention would have been sold lock, stock and
barrel to its client.
"PA has been very bad on IPR. In the past we have effectively given away a
lot of the patents and the investments that have gone into them," said
Pourtaheri. "However, we are not going to carry on doing that in the future.
"There have been some conflicts recently where clients have still said that
they want proprietary control over the IPR from a project. But, we have just
said 'No. This arrangement will not reflect the time, effort and capital we will
need to invest.'
"Our view is that the consultancies that do not have their own IPRs,
delivering consistent income and attracting not just clients, but partners, will
struggle in the very near future. They are going to find themselves losing
more and more market share."
With its long established UK research centre at Royston, near Cambridge,
PA undoubtedly has the infrastructure to deal with the changes underway in
the consulting business. But there remain undoubted risks in this approach.
For a start, just how broadly can the theory be applied? There is a world of
difference between the consumer market - and, in this specific instance,
brewing - where small innovations can go a very long way and fields such as
Pourtaheri's specialisation of telecoms, where technologies can be far more
complex and where the business environment is perceived very differently.
On the attitudinal aspects, he believes that his once conservative sector is
now moving toward an IPR view.
"A complete change in views towards the value of intellectual property has
finally occurred and it has been one of the major changes to hit the industry
as more competition has been allowed," said Pourtaheri.
"In the past, you had the big PTT companies or even monopolies or
duopolies. Even at the level of a guarantee or warranty, the situation was
that they basically told the supplier what he would do. The supplier had no
real control over the terms and conditions of the relationship.
"Now, there are more firms trying to access the critical technologies, so the
relationship has become more evenly balanced."
As an example of this, he cites PA's announcement last July that it has
partnered with Racal Instruments, Hitachi Micro Systems Europe and
Samsung Electronics Research Institute to develop a wideband third
generation (UMTS) mobile comms demonstrator. The results of this work
are due to be unveiled any time now.
It is intended to broaden experience of CDMA technologies among the
partner companies and provide a test-bed for algorithms, hardware and
software partitioning and radio circuitry.
The broad concept of how this demonstrator should work was drafted by
PA. It will be based on environment of broadband downlinks and smallband
uplinks to facilitate multimedia on a traffic level similar to Internet browsing.
It will also operate through a flexible rack of technologies, recognising the
on-going protocol standardisation. "We have a detailed roadmap of
activities on product development and at the IPR level for UMTS," said
Pourtaheri.
That menu has attracted the presence of three major players that PA invited
to its party, but the company acknowledges that, once you have got over
cultural barriers, there is still a delicate balance to be achieved, particularly
for a consultancy.
"If you are going to be proactive, you also have to be a good listener. If you
are going to say that you will do the basic research work and fund it before
seeking out clients, then you need a very clear perception of the market,"
said Pourtaheri.
"So far, our ability to identify market needs has served us well, but when you
notice that other major players have not been so lucky, the chances you are
taking are made even more obvious, as is your need to be vigilant."
And at the other side of the balance question, there is the simple need not to
tread on a potential client's toes.
"For a company such as PA, there still has to be the awareness that we do
not want to start competing with our clients. We are in essence a knowledge
company, not a manufacturer."
To that extent, PA does not necessarily see itself rebranding in the way that,
for example, rival Andersen Consulting has flirted with providing
off-the-shelf IT products.
"Much of it comes down to confidence about your position in the
marketplace; how confident you are about taking a project forward -
perhaps alone at first; how confident you are in addressing the client to help
him, but still retain your own core; and so on," says Pourtaheri. "It is not an
easy judgement. In fact, it is one you are making all the time according to the
conditions."
(Copyright 1998)
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Publication Date: November 17, 1998
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