Spearheading the change in this sector is Ashwin Parekh, who moved over from KPMG Peat Marwick (India) to Price Waterhouse Coopers (PWC) as partner in July this year. In this interview with Jayshree Bose, Parekh talks about this vision -- which he says is now concrete enough to talk about -- and other crucial issues affecting management consultancies in India.

Was the merger between Price Waterhouse (PW) and Coopers & Lybrand (C&L) a major motivating factor behind your moving to PW, considering the fact that the forte of Price Waterhouse's consultancy services in India is information technology (IT)?

Yes... that was definitely amajor consideration. For one, C&L is a force to reckon with in financial sector consultancy services, while PW has a strong presence in energy and government sectors. Add to this another fact: After the merger of Price Waterhouse and Coopers & Lybrand was clinched in June this year, the merged entity has emerged as the largest audit and management consultancy firm both in India and worldwide. Looking back, I must say that the fact that PW is now the largest combined audit and consultancy brand today with a worldwide revenue of more than US$15 billion was a major attraction. You see, the customer today is looking for comprehensive services, and though size can never be the only criterion, I'm convinced that only large firms can provide these services.

How big a challenge would it be to establish a brand equity for the merged entity in India for financial consultancy? It has played rather low key on this front.

It's true that PW has not kept up a very high profile in financial sector consultancyservices, though even before the merger it was associated with a number of projects such as the one for TimesBank, a transformation strategy assignment for Bank of India, the restructuring of ECGC, IndusInd Bank and others. Revenues from financial sector consultancy and the advisory services have grown in the last couple of years at a very high rate in the organisation.

One reason for a low profile was PW's area of expertise before the merger. I just spoke about a comprehensive range of services. Now, these include advisory services in the broad areas of strategy, performance, improvement, implementation and outsourcing. In the finance sector, PW did not have much of a presence in the upper end of strategy, while its outsourcing services were limited. Where the Indian entity's strength actually lay was in the operational areas of implementation and improvement. And operational areas such as these, however integral to consultancy, are traditionally low key. On the other hand, Coopers has a strong presence instrategy and performance with special relevance to the banking and financial sector. Logically, therefore, the consolidated entity now has a strong grasp over all these areas via a complementary merger -- enabling us to offer a wide array of services. This was, in fact, one of the objectives behind the merger.

My biggest challenge, or task, here would be: One, to re-orient a team (which already has a very good performance to its credit) into these integrated areas of expertise, and, as you said, to formulate a clear image so that our existing and acquired strengths are projected well. Three, we need to encash on post-merger strengths so that we can become leaders in the area of financial sector consultancy.

Which areas are you looking at as far as banking and insurance are concerned? What are the volumes of business likely to be?

In banking, we are looking at business transformation, risk management, cost control, new business processes, restructuring and human resource issues. Other potentialareas where there is a high demand for advisory services are use of technology, implementation of the business and information systems and ERP products. Its just a matter of time before banks begin to move the general ledger and accounting to ERP.

As far as insurance is concerned, there would be a demand for two types of services: Business transformation and re-organisation for the existing companies, advisory services on new products like bancassurance, entry strategies, business planning, distribution systems and joint ventures.

Let me share with you that I'm optimistic about volumes. In banking, consultancy services could touch Rs 100 crore this year, riding on an annual growth rate of 25-30 per cent. In insurance, we could hazard an informed guess: Rs 50-60 crore this year, followed by a rate of growth that could easily touch 80-100 per cent. We want to lead the market in offering the entire range of services and are looking at a large market share and presence.

Right now we seem to be the the onlyones to get business out of the capital markets in the mutual fund sector. We have earlier worked on the prestigious FIRE project and we shall certainly pursue all opportunities in the capital markets in future, including the FIRE project.

You just mentioned HR issues on your agenda. Unfortunately, policies on the more difficult aspects of reforms like exit policies, leadership issues, HRD and government shareholding in banks have been in limbo. How are these sporadic reforms affecting management consultancy firms?

Well, I wouldn't say they are really affecting business volumes in a very major way now, and that's simply because there are enough issues for consultants to concentrate on today, even without taking these unresolved issues into reckoning. However, some clarity on the part of the regulators on these reforms as well as issues on on narrow banking, asset reconstruction companies, etc will orient the minds of consultants and financial sector players alike towards a definite direction. Andthis is a must if problems are to be tackled effectively and in continuity.

Are some rampant Indian practices -- for example, those of linking consultancy fees to plebeian parameters such as the number of hours put in -- another major constraint in the consultancy business?

That was the situation some time ago, but things are changing. Let me just say that as consultancy in India comes of age, fee structures will be increasingly driven by factors such as expertise, value addition and the ultimate benefit to the client, which is how it is done the world over.

For example, in the case of Dena Bank, post assignment implementation support given by KPMG to the client generated tremendous value addition, since it made it possible to take quick corrective action where necessary.

The UTI assignment under way here also belongs to this category. Now the fee structure here in this case and in the case of, say, a client to whom one is offering advisory services only on credit cards or on treasury and forexas in the case of Vysya Bank and Central Bank, can hardly be on the basis identical parameters, least of all in terms of number of hours. I can safely say that clients in India realise and accept this, too.

There is a widespread perception that Indian consultancy firms find themselves hamstrung on account of the lack of reliable data and information. Your comments.

There is no doubt that information here is inadequate. So, going back to the advantages of size once again, let me say that it is possible for large consultancy firms to invest in the development of their database and research material and also bring in knowledge and experience from their international network for adaptation to the Indian scenario. And that is just what we are doing now.

We are looking at the market for products, talking to customers, sizing up competition, etc creating for ourselves a database which is not always necessarily linked to a project that is on hand. This could also be for subsequent use in our client'sprojects. Some databases we are now creating are those of potential customers for banks, conducting market studies for 39-40 products which banks and insurance companies can launch, and assessing markets for the distribution of various financial products.

Where do you see Price Waterhouse Coopers in financial sector consultancy two years down the line?

Putting it succinctly, let me say we should apply ourselves towards being the most preferred consultants in all the areas where we are present. We are looking at bringing the knowledge and expertise available within the network and be known as business transformation implementers.