Japanese consulting firm intends to hire 500 staff over the next three years for local subsidiary.

Japanese consulting behemoth Nomura Research Institute (NRI) has signalled a heightened level of interest in the New Zealand market, announcing the launch of a local business under a newly created NRI regional subsidiary.

Tokyo-listed NRI is a $27 billion market cap company with an established presence in Australia, having acquired ASG Group in 2016.

Now ASG will be officially rebranded as NRI and long-time executive Dean Langenbach will assume the role of CEO for NRI Australia and New Zealand, under NRI ANZ president Hiroyuki Kawanami.

NRI plans to create 500 ICT and consulting jobs in New Zealand over the next three years and grow its overall Australia and New Zealand operations by 50%. It already has 2500 staff across ANZ.

The Japanese company made a big move in the local market last year when its Australian-headquartered quality assurance subsidiary, Planit, acquired Wellington business QualIT for an undisclosed sum.

That quality assurance foothold has apparently provided confidence for a wider move into consulting here, targeting managed services and supporting software vendors SAP, Oracle, Salesforce and Microsoft.

Langenbach became CEO of ASG in 2019 after joining as CFO 17 years ago. He told NBR that he’d had his eye on the New Zealand market for some time but Covid delayed progress to set up shop here.

“We’ve always felt that New Zealand would be a good market for our company, just because of how we approach business, which is probably a little more down to earth and genuine than some of the large multi-nationals.”

The strongest competition in Australia has traditionally been with Kiwi company Datacom, so it was “natural” that it try to provide an alternative to Datacom here in New Zealand as well, said Langenbach.

“We wouldn’t have embarked on it had we not had the feedback that the market in New Zealand is looking for an alternative.”

NRI’s New Zealand team will first target consulting in its strengths of project management, business analysis and app development, followed by pursuing managed service tenders in infrastructure and application services.

“We’re already talking to Microsoft and Oracle, so we’ll lead with those vendors, initially…we’ll also look to complement some of the testing services from Planit and Qual IT, and we’re already working on a couple of opportunities in Wellington around that.”

Bolt-on acquisitions of other consultancies could also be on the cards in the future, he said.

Demand for consulting

Tech consulting, and management consulting more broadly, is becoming a crowded space with the likes of Boston Consulting Group, Accenture and Slalom announcing either arrival or greater investment in recent months, leading NBR to ask whether there is enough demand in the local market for another player?

Yes, the economic conditions are tough across the region, but Langenbach believes the demand for digital transformation among enterprises will remain buoyant.

“In our research there’s a lot of New Zealand Government departments and a lot of New Zealand clients that are looking to transform their digital platforms, just like in Australia, so we believe the demand will be there…

“We’ve already seen [demand] softening a little bit in Australia, but not to the point where we shouldn’t make good business decisions, such as investing in New Zealand.”

NRI has hired a business development person in Wellington and is about to hire another in Auckland. They will be working out of Planit’s existing premises in the first instance, and working closely with staff in that sister business.

Cloud competition

Langenbach doesn’t necessarily think the increasing availability of on-shore data storage and processing capability in New Zealand, via the likes of CDC, AWS and Microsoft data centres, provides extra impetus for digital consultancies here – the demand is already there whether on-shore or off-shore.

But, in Australia, NRI does partner with a number of sovereign-accredited cloud providers and will look to do the same in New Zealand.

Although it’s not its core business, NRI has the option to build its own on-shore data centres, he noted. It has a number of data centres in Japan which are accredited to the highest level of security given their government clients.

“So establishing a data centre for us isn’t that foreign,” said Langenbach. “It’s not really what we want to do but we’d look at it if we needed to and, more importantly, if the New Zealand Government wanted us to we would definitely look at it.”

In terms of a typical managed services project, NRI will partner with a local data centre provider and, although it has plenty of off-shore operational capability available to it, it will always look to employ locally for its operations, he said.

“We may even joint venture with Datacom. In IT you’ve probably heard the term ‘co-opetition’ where we compete one day and work together next? Well, we partner with Datacom on a number of opportunities in Australia and I don’t see it being any different in New Zealand…along with other service providers.”

Original article, written by Will Mace, published in the National Business Review, 23 February 2023. Original article can be found here.