Running head: INFORMATION TECHNOLOGY AT BORLAS CONSULTING GROUP 1
Information technology at Borlas Consulting Group
Sergei Bugrov
Chadron State College
INFORMATION TECHNOLOGY AT BORLAS CONSULTING GROUP 2
Information technology at Borlas Consulting Group
Overview
Description of the Business
Consulting is an essential part of modern business world with rather significant global market size
of around $245 billion (“Global Consulting Market 2014,” n.d.). It “is a process by which an individual or
firm assists a client to achieve a stated outcome” (Biech, 2007, p.1). This paper covers and analyzes
information technology used by Consulting Projects Department (CPD) of Borlas Consulting Group
(Borlas) (http://www.borlas.ru), middle size company located in Moscow, Russia.
Borlas was founded in 1991 and has been one of the biggest Russian companies in information
technology (IT) consulting. Consulting Projects Department is in turn one of few key entities of the
company which generates revenue. The value of the whole company depends on its performance. They
perform two main functions: management consulting and Oracle Applications implementation.
Consulting Projects Department completed many different projects within industries such as metallurgy,
telecommunication, spacecraft design and manufacturing, public services, petrochemistry, utilities, and
insurance. CPD tightly cooperate with Pre-sales Department, which introduces the solutions before
implementation, and Technical Support Department, which is responsible for technical part of a solution
and provides technical support during post implementation period.
Industry Analysis
In order to provide the description of the business environment where Borlas acts it is necessary
to analyze consulting industry in Russia. The method developed by Michael E. Porter was considered as
the most appropriate for the course work (Porter, 2008). It is designed to analyze five major factors that
influence profitability in the industry.
First of them is the threat of entry that reflects entry barriers of an industry and incumbents’
expectations on entering an industry. The threat of entry in consulting and ERP industry is high. Entry
barriers in the industry have complex nature: customers usually require experience relative to their project
which means that incumbent must have experienced management and team of consultants at the very
INFORMATION TECHNOLOGY AT BORLAS CONSULTING GROUP 3
beginning. At the same time, the number of specialists in this sphere is very limited which makes entry
rather difficult.
Second, the power of suppliers represents the ability of suppliers to influence the costs. It is also
high in the industry. The major resource for this industry is qualified labor force. Very limited labor
market provides consultants with significant leverage.
Third, the power of buyers represents the ability of customers to influence either costs or prices
which is very high in consulting. ERP implementations projects are usually expensive. However, the
value of ERP system is very uncertain and highly depends on the quality of its implementation. ERP
market in Russia is very limited: only really big businesses can afford it. All these factors make the power
of a potential customer rather high. Clients have negotiating leverage and most of them use it driving
industry profits down.
Fourth, the threat of substitutes is usually expressed by number of products or services that
perform the same or almost the same role. It is low in this industry. ERP implementation is very complex
service which is not easy to substitute. However, there is a certain threat from freelancers. Nevertheless,
their influence is not significant.
Fifth, rivalry among existing competitors express the direct competition and its impact on
industry profitability. Price competition is great in this industry. However, experience plays a great role,
increasing switching costs, and could be more important for a customer. Every project is unique and its
price is hardly comparable with other projects. Moreover, project pricing is rather complex task. All these
makes difficult to predict competitors’ prices. Consequently, rivalry among competitors is indirect and
complicated but also high at the same time.
Overview of Seven Most Important Information Technologies at Borlas
Financial accounting system (FAS). FAS usually serves to store financial transactions and
generate reports. The reports, in turn, may facilitate analysis and forecasting, more advanced functions
that some FASs include. In Russia accounting has to comply with Russian Accounting Standards (RAS);
companies in certain industries are also required to implement accounting in accordance with
INFORMATION TECHNOLOGY AT BORLAS CONSULTING GROUP 4
International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS). This
factor usually plays a significant role in choosing FAS software.
Borlas uses several integrated applications developed by 1C Company (http://www.1s.ru) for
financial accounting. These are ones of the most comprehensive accounting applications that fully comply
with RAS. Since cash flows generated by consulting projects are based on completion of project stages,
FAS is not used for budgeting or forecasting purposes but for transactions entry and storage. However,
data from this system is used to evaluate project performance and forecast future cash flows.
Management accounting system (MAS). MAS is a system that process business transactions,
provides reports that support management decision making (Rom & Rohde, 2007). MAS often contains
set of tools for analysis, budgeting, planning, and forecasting.
MAS at Borlas is based on several Oracle e-Business Suite (OeBS) modules. It is project
oriented, which means that a project is its most important object and everything else in this system is
