The world today is a very different place compared to that of two decades ago. Today, businesses face lower barriers to entry, and desire to expand internationally.
According to Lloyd’s 360 Risk Insight on Globalization and risks for Business research, there has been a surge in globalization over the past two decades, which has led to a more interdependent and interconnected world.
While this does propose immense benefits, it also brings with it new and, systematic risks for businesses. For example, businesses that that have supply chains through various countries are prone to risks associated with the various macroeconomic factors that affect each supplier.
In the long term, protectionist tendencies are unlikely to reverse the overall trend towards globalization. Lloyd’s report also found that over the past 13 years alone, cross-border financing has quadrupled: from USD 1.5 Trillion in 1995, to over USD 6 Trillion in 2007.
It is more-or-less established that a global stance for businesses is key to its success. Having said that however, the CBI has reported that one in three mid-sized businesses still face problems in identifying overseas opportunities. One of the major challenges that businesses face is the physical presence in overseas jurisdiction to promote and/or sell their goods/services.
Having a physical presence is an expensive and time consuming affair. Hence, it is crucial that businesses select the right partners that will help them to expand across borders in the most cost effective and time effective manner. The best way to do this is through a professional services network.
Professional Services Networks
These networks are sometimes specific or multi-disciplinary, working in the fields of Accounting, Law, Consulting, Insurance, Corporate Services, Real Estate, etc.
The Networks employ over 1 million professionals around the globe with revenues in excess of USD 300 Billion. The network is suitable for professionals that operate locally but have clients in multiple locations.
Some renowned accounting networks include Grant Thornton, BDO, RSM, etc. On the other scale, we have law firm networks in the shapes and likes of Alexia, Adlaw, World Services Group, etc. There are also multidisciplinary networks which provide a broader range of services than the ones mentioned above. Such networks include ADAM Global, Alliot Group, Ecovis Etc.
By becoming a part of the professional network the local professional firm gets access to all the international offices the network has around the globe. This in turn allows the local office to be visible to capitalize the global opportunities. Some of the tangible benefits that a business can reap by joining such a network are:
- to receive referrals from other members
- to have reliable firms to which they can refer
- to maintain independence
- to meet clients’ needs
- to retain existing clients by being able to provide services in other states or countries
- to obtain new clients in their market who know of the network
- knowledge transfer and exchanges that can reduce the chances of risks in firm
Some intangible benefits of a network are:
- accommodating for accelerating change
- helps to reduce the degree of uncertainty by bringing together a greater number of specialized resources to work on a problem
- reduce possible loss through burden sharing
- Enhance the prestige of the member by being associated with prestigious firms
The exhibit on the right gives out a comparison on some of the strategies that a business can adopt to expand globally and the impact the strategy has on the capabilities of the business.
To sum up, your network is your net worth and it crucial to how business is being done today.