The Large Consultancy - A Rogue Business Model

What a total waste of time and money 90% of major consultancies are, just ask Sainsbury's, who have an order management system that cannot even keep tins of beans on the shelves and why their current IT Director is on permanent gardening leave, awaiting the delivery of her P45, and using the computing press to desperately try and claim that the consultants she outsourced the work to actually did a good job. Or what about the latest fiasco known as the NHS IT project? The biggest Consultancy of them all is now thinking of bailing out, cutting its losses because as a management consultancy it appears it cannot manage its own suppliers and now its main software supplier its about to crash and burn.

It's worth at this point examining the business model of any IT consultancy. It's the perfect example of Darwinism at its best. Their whole set up involves the recruitment of large numbers of normally semi skilled IT professionals whose first 3 assignments are to become fully skilled by learning at the expense of the customer. Consultancies have a massive turnover of these bottom rung staff, because the only people who survive are those that show any inclination of a sales aptitude. The rest either get fired for not learning quickly enough at the customer site, leave because they suddenly see what is really happening, or gnaw their own feet off in sheer desperation and boredom.

IT Consultancies don't have a product, they have staff ( which are their product ) and they also have shareholders to which they are answerable. How do they keep their shareholders happy, by paying them lots of lovely dividends, how do they get dividends, by having as many people as they can possibly get on a project and charging at least twice the market rate for staff with half the knowledge of most everyday IT contractors. How do they get staff onto these projects, by winning bids, and how do they win bids, because they are extremely clever, they always under bid everyone else with a bid so low there is little or no margin, because they know with mediocre staff on the project, but two of three good salesman project managers they will be able to generate three times the revenue through the constant raising of change requests for every little problem on the project. This is how these people make their money and we let them. ( Who are the stupid ones ????? ).

Can you imagine if bidding for outsource contracts went to auction, and you had more than one IT consultancy bidding. They would under bid each other so many times; they'd end up paying the customer just to do the work. So how do we stop the great spread of this virus, worse than any computer virus known to man. Well there needs to be a wake up call to senior managers, stop being blinded by free golf lessons at Glen Eagles or a corporate seat at the next Chelsea match and wake up to the fact that you are all personally accountable to the IT industry for bringing the shame of failure upon us by thinking you are getting value for money from these del-boys snake oil salesman.

Realise that they have a legal department unmatched by all but the biggest organizations, and the contracts they produce have more get out clauses than a OJ Simpson trial. Which means when they do screw up ( and that's when not if ), that 1000 page document allows them to walk away with out a single shred of guilt for the loss and pain they just caused. We as a profession need to wake up too; the IT industry is still a play ground for the shark, the lay about and fly-by-night. We need to start looking at real certification, whether its certification in specific domains such as Prince 2, or Scrum Master, or more general certification like the BCS Professional Development schemes, we as individuals need to prove we have the skills. Corporations also need to be held to account for failures; just because some one has ISO 9001 certification does not make them a quality organisation. The IT industry needs to start policing its certification model and taking it away from people who fail. Only then will we as professionals be trusted.