- Mar 26, 2018
Having worked with the Big 6 consultancies, and directly employed ex-employees of Deloitte, PWC, E&Y etc, it amazes me as to why companies still use them. Don't get me wrong, I do know the answer, it just when you know the truth of the situation it is truly amazing that they get away with it.
In the Guardian newspaper, they have just reported that PWC charged more than £20m for the first 8 weeks of the Carillion collapse. PWC are charging £1.4m a week to employ 112 staff to deliver the liquidation of Carillion, that is £2.5k per man per day. In the first week alone, they billed £3m for the deployment of 257 people, that equals £2.3k per man per day.
Rachel Reeves, the Labour MP in charge of the business select committee stated: “It’s the big four accountancy firms that make a killing advising struggling companies how to turn them around and the big four that make millions tidying up when that advice fails.”
So here is my experience of large consultancies:
- They only ever help develop strategy and never implement the strategy
- In most cases, clients spend so much on the strategy that they compromise the implementation due to budget issues
- Consultancies send in the A-Team, to sell you a solution, but you find B,C,D,E and F people on site delivering the work. Don't be surprised to see graduates on site, being charged out at £1.5k per day!
- Most of the people brought in to do the work are actually independent contractors given an associate job title. You can hire them directly from £300+ per day
- Consultancies never implement the strategy they devise because a) strategy is easier than implementation and b) It does not affect their brand if they can blame how the client implemented the strategy - often it is heard that they the reason for failure is that the client didn't allocate enough budget to the implementation - it would have worked otherwise.
- Consultancies are a business, and as such their goal is to stay "on - site" with a client and bill for as long as possible. Quite often you find that they find issues/challenges that are out of scope from the original requirement. This is the reason most companies have no money left to implement the advice given.
So why are they still used? Here is why:
- For most clients of large organisations who can afford these consultancies, it is not their personal money. They are protecting a political interest or a share price and therefore they are bringing in the big guns to deliver a message - we are using the best!
- There is a saying that goes " No one ever got sacked for using Accenture". So if a CEO/director uses the perceived best, and it still fails, it's not their fault.
- All of the large consultancies have people on their books as associates, for the sole purpose of their personal book of contacts. To gain access to people from a friendly face.
So are there alternatives? Yes, but there is a caveat.
You can hire independent contractors who are deemed as the "A-Team" to work and deliver your projects or initiatives, giving you a saving of 70% of the budget compared to the consultancies. Furthermore, they will also implement the strategy.
However, the one thing that large consultancies do have is a methodology - everyone singing to the same hymn sheet.
Therefore if you want to create and strategy and implement it, using better or the same resource than supplied by the consultancies, ensure you have a very strong programme manager with a clear methodology.