T.K. Hamann and adeptic bundle their competence
July 10, 2019
T.K. Hamann and adeptic have agreed on a cooperation to bundle their complementary fields of competence. The focus is on the application and commercialization of innovative technologies – including those developed by start-ups – especially in the area of “Testing, Inspection & Certification” (TIC).
Another focus of the cooperation are the current challenges and opportunities in the Automotive & Mobility industry (e.g. ‘Remote Diagnostics’) as well as in the Aerospace industry (e.g. ‘Urban Air Mobility’ and commercialization and industrial use of drone technology).
T.K. Hamann is a top-management consultancy that possesses marked and deep competence in Strategic Management, Business Development, Leadership & Organization, and Operational Excellence with a clear spike in the Automotive & Mobility industry.
Its founder, Dr. Thomas K. Hamann, possesses both profound consulting experience (i.a. McKinsey & Company and Bain & Company) and abundant operational know-how (Project Manager for Group-Wide Porsche Improvement Process at Dr. Ing. h.c. F. Porsche Aktiengesellschaft)
T.K. Hamann delivers tailor-made projects in a strong cross-functional and interdisciplinary approach and involves—if required—outstanding specialists from a large network of contacts.
Cybersecurity and Digital TIC: Tales of pride and fall
July 1, 2019
Even though quite likely untrue defamation by envious rivals at the court of Catherine the Great, the story of “Potjomkin’s villages” continues to hold a prominent place in the collective set of European metaphors. Its powerful imagery still works today: Refer to them, and most people promptly see the fake houses painted on canvas along the Dnieper’s beds in their mind’s eye, and immediately understand the implication.
And because some things haven’t changed since the prince’s alleged deceit in 1787, the story continues to enjoy unbroken popularity. Still today, some people apparently feel the need to cover up failings and shortcomings by painting in glowing colors and by embellishing on a grand scale, pretending that results/achievements/progress/life are great. Just like in the story, this can work quite well and quite a while, saving faces and jobs.
Not even stoic consultants are immune to that powerful imagery. When reading certain statements by some TIC players on Cybersecurity, the gap between the bold assertions on the one hand and the rather unexciting reality on the other is too obvious – so striking that we can’t help thinking of the proverbial canvas villages:
- Some recent remarks, made by TIC top-level executives during press conferences and in results presentations, suggest a level of Cybersecurity competence and Digital capability that in most cases simply does not exist in practice. It is okay to stretch things a bit, but neither is the TIC industry a thought leader in the field nor the natural address to turn to. Rather, the industry is not even able to protect itself against Cybercrime, as the Eurofins hack has vividly illustrated.
- Likewise, the mellow wordiness of some exhilarating press announcements on Cybersecurity partnerships with OEMs only hardly obfuscates the very uneven arrangements behind: that TIC players felt compelled to team up with OEMs to get a foot in the door at all, and that most of the competence and business rests with the partner. That is yet another clear indication that the TIC industry is about to lose the battle against OEMs reg. asset-related OT Cybersecurity, and that it is devolving into a mere subcontractor role in this field.
- Furthermore, some players’ praised investments into “Digital” appear less stellar when compared to others’ efforts and initiatives. Just as an example: U.S. Venture Capitalists and strategic investors are pumping triple-digit millions into the next wave of Cybersecurity start-ups, fueling nail-hard competition between these tech-savvy, promising and ambitious newcomers and pushing them to maximum performance and progress. Neither does the TIC industry match that level of spending, nor are most players able to keep up with that pace.
Some readers may feel being treated unfairly, and it would indeed be incorrect to say that all of the TIC industry is on the wrong track. Many TIC companies have realized that Cybersecurity and Digital competence will be crucial for continued success in TIC, but not all players seem to achieve actual progress or take the topic seriously. In consequence, we observe a growing disparity between those TIC players really working on Cybersecurity/Digital and making headway, and those just pretending to do so and resting on their laurels.
In our view, this growing division between the “future-proof TIC players” and the “heroes of the past”, and not hypothetical synergies, will trigger the next consolidation wave in the industry. And this will follow a very simple “predator and prey”-logic: The “future-proofs” will acquire the others, or only those parts of the obsolete players useful for them.
Pride comes before a fall, but a fault confessed is half redressed. The TIC players on the slow track reg. Digital/Cybersecurity should finally acknowledge that they are not just falling behind against new competitors from outside, but that they are unwillingly turning themselves into acquisition targets for the next wave of TIC consolidation – and that seducing oneself and fooling others with sweet little lies will take them nowhere.
Photo copyright: Gregor Sailer
ALS Global/China: Eastern Misgiving
June 3, 2019
At times, writing an article for this TIC blog can be a straightforward thing. After reading the comments ALS Global’s CEO Raj Naran made on the divestment of ALS’ Chinese environmental business in the Australian Financial Review, we decided to simply quote a few of his memorable statements.
Your stage, Raj:
- “China (is) one of the larger markets globally for environmental work (…), (with) ALS' business (of three labs in Shanghai, Beijing and Guangzhou) being small in a market with more than 16,000 laboratory competitors.”
- “What we've seen is an increasing trend in China of vertical integration … many of our clients that we've had over five years have developed their own in-house testing facilities”
- “We're just a laboratory services provider. So we're increasingly disadvantaged when competing with companies that have services across the value chain.”
- “In China there's evidence of increasing provisional-level regulations requiring testing services to be done locally in province, and this really is against our business model”
- “With higher levels of governance … we really don't see a real opportunity for growth for ALS.”
- “Government policy changes rapidly in China. And subjectively, as a wholly owned foreign entity, I feel like we are a little bit disadvantaged in the local market.”
To us, this is not news at all. And it definitely contradicts the “China domestic market”-narrative so popular in TIC. Instead of finding unlimited growth opportunities in an enormous market that is gradually opening up and prone to more outsourcing, ALS Global experienced the exact opposite: A tough fight with strong local competition for shrinking volume, more and more hampered by unfavorable government policies and interventions.
We have always been skeptical that the longed-for liberalization and opening of the Chinese domestic TIC market would resolve all worries and fuel the TIC industry’s next growth cycle. This does not mean that we negate the great potential TIC possibilities in China – but they have to be viewed realistically, with a pinch of salt, as ALS’ experience shows. China is not going to be the silver bullet for the TIC industry, and success in this increasingly difficult market is hard work and cannot be taken for granted.
We are firmly convinced that we are going to hear more stories of this kind, as the Chinese government’s adamant push for consolidation of the domestic TIC scene slowly bears fruit, in turn gradually making life harder for Western players. In the worst case, their revenues and profits could have peaked already.
Let’s see which major TIC player is going to be the first one to come up with a more realistic view on opportunities in China – and let’s see how investors will react. Our feeling is that they have grown a bit too accustomed to the good old fairytale of “Eastern Promises”, and that the rather unsettling and sobering new stories are not going to be received well.