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Tectonic Shifts in
Consulting Land
The Arthur Anderson's motto of "Think straight, talk
straight" summed up what ought to be the essence of the accounting and consulting
industry. Whilst I suspect it was not universally adhered to, it helped to build an empire
spanning 75 years. Now it and the whole big end of the consulting world are in turmoil.
Derek Young the MD of Accenture believes that the industry
will consolidate to two to three global players with a string of struggling mid range
firms. Competition in the IT area is emerging from Indian firms such as Bangalore and
Tata, together 300 strong in Australia.
The self-prescribed medicine of mergers and downsizing
(Deloitte's Consulting has lost over 150 staff in the last 3 months, Accenture 5% of staff
over last 12 months) does not come to grips with the shifting approach of business to the
engagement of external help. What the industry is failing to come to grips with are:
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Clients are more interested in buying
individuals and hence the high leverage model of a partner with an army of juniors where
clients pay a premium price to train inexperienced staff is under threat. |
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The ubiquitous availability of theories,
methodologies, studies, fact and figures through the net strikes at the heart of knowledge
based industries and has meant that others are able to assume the mantle of
leading edge knowledge brokers at a fraction of the cost. |
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Big consulting companies used to relay upon
their own methodologies to implement large scale IT projects. Their advantage was eroded
when most technology vendors released their own technology specific methodologies to the
wider market at a fraction of the cost. |
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The mysticism propagated through
excruciatingly complex and lengthy methodologies and jargon abundant advices are perceived
cynically as aimed at de-powering client and boosting fees. |
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Long process driven interventions with a
mountain of billing hours are viewed more sceptically; Boards are increasingly demanding
the use of internal resources to implement change. |
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The aura of safety and security of engaging
the big end of town has evaporated. The media is brimming with reasons but did you know
that Cisco and EDS have large stakes in KPMG and AT Kearney
respectively and that audit partners at Deloittes are handsomely rewarded for cross
selling other consulting services – yes you guessed it, no conflict of interest. |
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Finally I bet you didn't know this, a survey
released in August by Australasian Professional Services Marketing found that too often
consultants have sold clients what they wanted to sell not what the client wanted and
"clients don't like this". |
The big-end of town is not dead, it has to live its stated
ethical principals and more clearly define its niche, which appears to be large scale IT
implementation, system design and implementation across borders, international strategy
and benchmarking and outsourcing (a growing market).
The mid to smaller end of town is being seen now days as
customised, responsive, focused, more personal and reliable. So "Live long and
prosper" if you are:
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Technically excellent |
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Ethical |
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Build great customer relations |
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Live a service culture, and |
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If your fee structure represents value |
What Next?
If you are interested in more information please give us a
call on +61 2 8399 0011 and ask to speak to one of our consultants.
Alternatively e-mail us at info@emdgroup.com.au or use the form on
our Contact Us page. |
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