Management consultants in Orange County are adjusting to their clients’ needs as the ongoing recovery brings a shift from tactical moves addressing immediate concerns to strategic outlooks for growth.
That’s the first big switch since the recession began in late 2007 and punished most business sectors for two years.
“The outlook is more long-term focus,” said Jeremy Linehan, vice president of Costa Mesa’s Profit Recovery Partners LLC.
The firm provides consulting services for companies looking to cut costs on office equipment, shipping, telecommunications and other back-office operations. Clients include law firms, insurance and real estate companies, and financial services companies.
The days of relying on the same supplier year in and year out for equipment, logistics and other services are likely over, according to Linehan.
The same goes for special events, resort or hotel giveaways, and other goodies used to cement key business relationships.
“The value of supplier gratuities is now being overrun by price point,” Linehan said. “Service and price are driving vendor loyalties, and there is more of a focus on developing a best-in-class procurement model. We’ve seen our business increase significantly from the shift in focus.”
That mindset has spurred business at Profit Recovery, which projects a jump in revenue to about $14.5 million in 2011, according to President Donald Steiner.
Clients Consolidate
Newport Beach-based Lyndon Group LLC is seeing more consolidation among clients as they weigh long-term viability. Integration of operations is at the top of the agenda for many clients, according to founder and Executive Manager Ken Jones.
In other cases, clients have left California to pursue business opportunities in other states with less regulation, lower taxes and cheaper labor.
Lyndon specializes in accounting, finance and information technology projects, including interim and part-time assignments. Contracts are project-based. Clients run the gamut from food distributors and government contractors to manufacturers, banks and apparel makers.
“It’s tough for companies to be in a knee-jerk position on anything,” Jones said. “Everyone is being more cautious since 2008.”
Lyndon grew revenue at a small clip in 2010 and is seeing some traction recently with some wins against bigger competitors.
“Some purse strings are opening up a little bit—I think people are getting a little more comfortable,” Jones said. “We’re getting some really exciting projects now. I didn’t see that blip this time last year.”
Being Cautious
Caution is still a general rule.
“People are being careful on how to spend, where to spend and how much to spend,” said Al Coronado, director of business development at Woodland Hills-based Goetzman Group.
The company has an office in Irvine and focuses on accounting and finance services for Fortune 500 companies. Its consultants are full-time but do short-term stints as controllers, accountants, analysts and other finance roles.
Local clients have included Irvine-based drug maker Allergan Inc., Santa Ana-based Ingram Micro Inc. and Experian PLC, which has its North American headquarters in Costa Mesa.
Many clients are looking for sustained growth after surviving the downturn and are hesitant to pull the trigger on major expenses such as a hiring, new technology or startups of new business lines, according to Coronado.
“Companies are starting to move forward, but they’re being very careful about what they’re doing,” he said.
