Tag Archives | consulting industry

Services Industry News: Quick Takes

Here’s a brief roundup of links and news from around the services industry.

24% say they’d rather give up sex than sit through another PowerPoint presentation.

The Economist offers advice to consultants as demand for services rebounds.

Job market for consulting shows real signs of life.

What consultants are earning at 4,956 companies.

Accenture’s earnings beat expectations. Booz Allen’s profit surges.

PwC gobbles up consulting firm PRTM. The financial details are hush-hush, but you can bet some people will end up with bags of money.

Consulting Magazine selects its top 25 consultants for 2011. Mostly a vanity award?

According to the Boston Consulting Group, consumer sentiment is currently all over the map.

What do executives want from their CIOs? PA Consultants’ survey says cost savings, increasing operational efficiencies, and delivering consistent, stable IT performance.

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Arrogance

micahel mclaughlinLooking through blogs last month, I came across Consultants Are Pros, While Corporate IT Staff Are Minor Leaguers, by Erik Eckel. Admittedly, the provocative title lured me in.

In the piece, Eckel argues that it’s difficult for corporate IT employees to make the leap to the consulting business because they just don’t have the chops. Really? I read on.

Eckel says:

IT consultants are essentially the equivalent of baseball’s major leaguers, while corporate tech staff members are typically minor league professionals…consultancies too often must slow down and train corporate professionals on simple and basic processes. These are fundamentals that I think it’s fair to claim any big leaguer should have mastered.

Besides the lame use of a sports metaphor and flawed reasoning, what’s really wrong with Eckel’s slap at corporate technologists lies in its not-so-subtle arrogance. The path to consulting oblivion is paved with such arrogance.

If you put yourself above others, which arrogant consultants do, you sabotage any effort to establish communication channels with those who are “beneath” you. Especially in a client environment, effective consultants ratchet up their listening skills, instead of selecting who is worthy of their attention.

Arrogance grows from a self-perceived image of importance. A client may tolerate that in the short term, but, over time, arrogance always wears thin. It won’t be long before an arrogant consultant makes the wrong move in the client environment and winds up looking for a “new opportunity.”

Mostly, arrogance gives all consultants a bad name. Arrogant behavior fuels every negative myth that consultants confront as they serve clients and build their businesses.

I don’t know Eckel or how he practices his craft. I do know that he stumbled as he tried to point out the skills someone needs to succeed in an IT consulting practice. But he gave me an important reminder: If you have a shred of arrogance, check it at the door.

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Podcast: Daniel Burrus on Seeing the Future

Meet the MasterMinds: Daniel Burrus on Flash Foresight

Dan Burrus, futuristDaniel Burrus is the author of the bestselling new book, Flash Foresight: How to See the Invisible and Do the Impossible, and Technotrends.

Dan is one of the world’s leading technology forecasters and business strategists. He’s the founder of Burrus Research, a firm that monitors global advancements in technology-driven trends to help clients understand how technological, social, and business forces are converging to create untapped opportunities.

I asked Burrus how we can use the futurist’s tools to guide our businesses and help clients find those new opportunities.

Listen Now

Run Time: 18 minutes

Find out more about Daniel Burrus at www.flashforesight.com and www.burrus.com.

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The Best (Large) Consulting Firms to Work For

 

Last month, Fortune magazine released its annual list of the 100 Best Companies to Work For. Eight consulting/accounting firms earned a place on this year’s list. For most of those firms, job growth in 2010 was non-existent. Ernst & Young, for example, reported a 7% reduction in jobs, and KPMG shrank by 5%.

Most job growth was concentrated in the pure consulting firms–not in the full-service professional service firms. Boston Consulting Group grew jobs by 2% and Booz Allen Hamilton by 9%. These two firms were also offering the highest average salary of the consulting/accounting firms, but not the highest among the top 100 companies. For instance, a senior account executive at SalesForce.com (#52 on the list) reportedly earned an annual salary of $318,323.

 

Ranking and Firm
Average Salary
2010 Job Growth
# 2 Boston Consulting Group
$154,501
2%
#26 Plante & Moran
$ 64,300
-4%
#63 Deloitte
$ 81,622
-1%
#73 PricewaterhouseCoopers
$ 86,826
-4%
#77 Ernst & Young
$102,593
-7%
#85 Booz Allen Hamilton
$112,728
9%
#86 KPMG
$ 73,300
-5%
#99 Accenture
$ 83,500
4%

 

Most of the firms on this list are still struggling to align their businesses with the market realities they face. So executives had to make tough decisions about how to size their practices and serve their markets most profitably.

 

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Clueless Consultant Makes a Video

Have a listen below to the continuing (Mis)adventures in Consulting starring Stanton Newhouse III, senior partner at Marginal Profit Partners.

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Interview: Maureen Broderick

For the January issue of Management Consulting News, I  talked with Maureen Broderick, author of The Art of Managing Professional Services: Insights from Leaders of the World’s Top Firms. In the book, she draws on more than 130 in-depth interviews with top firm leaders to find out what it takes to build a highly successful practice. I asked Broderick what surprised her the most in her research, and about the key challenges firm leaders face today.

Get our podcast interview with Maureen Broderick.

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Recent News in the Consulting Industry

Last month, consolidation in the HR consulting market continued as Aon Corporation scooped up HR consulting giant Hewitt Associates for $4.9 billion. According to reports, Aon plans to integrate Hewitt with its existing consulting/outsourcing business, creating a new entity called Aon Hewitt. Current Hewitt CEO, Russ Fradin, would then become CEO of Aon Hewitt.

That transaction follows on the heels of Mercer’s acquisition of IPA, the health and benefits administration technology provider. And, in January of this year, Towers Watson completed the merger of Towers Perrin and Watson Wyatt.

Speaking of Hewitt, according to a recent Hewitt study, global employee engagement and morale are nose-diving as the economy picks up steam. Almost half of surveyed organizations reported a drop in employee engagement levels at the end of June 2010. It’s the steepest drop-off Hewitt has reported since it began conducting employee engagement research 15 years ago.

Hewitt’s analysis shows a link between employee engagement levels and financial performance. Organizations with high levels of engagement (where 65 percent or more of employees are “engaged”) outperformed the total stock market index even in volatile economic conditions.

In a moment of clarity, executives at consultancies A.T. Kearney and Booz & Company ended talks about a possible merger. The two firms have danced around a possible combination before and reached the same conclusion. It’s doubtful that this latest round of talks did anything more than create unnecessary firm-wide turmoil at a time when both firms need market focus, not political intrigue.

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Can Social Media Pull Consultants into the 21st Century?

When it comes to adopting new trends and technologies, it’s not unusual for consulting firms to lag behind everyone else. And the rise of social media platforms for marketing is no exception.

After clients paved the way with their own programs, consultants now seem ready to get on board. That’s according to a study of 74 consulting firms conducted by Bloom Group, BlissPR, and the Association for Management Consulting Firms.

“The study shows that consulting firms are beginning to use social media to rethink the very marketing practice they pioneered years ago–what increasingly is referred to as thought leadership marketing,” said Bob Buday, president of Bloom Group.

Two of the study’s findings caught my attention. First, according to the study, consulting firms are expanding their budgets for social media to an estimated 18 percent of marketing expenses. This run up is happening even though “…a majority of consulting firms are still unsure about how to best market their ideas,” said Meg Wildrick, managing director at BlissPR.

Second, the emergence of social media could transform how consulting firms market their businesses. Five years from now, social media programs are projected to account for about a third of consultants’ marketing budgets. That’s about the same amount as firms currently spend for offline and “traditional” online thought leadership marketing initiatives.

If you’ve hesitated to add elements of social media to your marketing mix, this study should be your wake-up call: Thought Leadership Rewired: How Consulting Firms are Using Social Media to Market Their Ideas.

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Industry Watch-July 2010

According to researchers at the Boston Consulting Group, an economic downturn is a perfect time for mergers and acquisitions.

Apparently seeing it the same way, Deloitte is in the market for acquisitions. A year ago, Deloitte acquired the public sector practice of the bankrupt firm, BearingPoint. And now, the firm is on the lookout for new opportunities.

Consulting firm, Mercer, is also in the hunt. Mercer has acquired IPA, a health and benefits administration technology provider, hoping to use the acquisition to support its planned expansion into the health and benefits mid-market outsourcing business.

Rumors are still out there about the potential for a Booz & Company and AT Kearney merger. If it happens, the combined practice could gain a firm hold on the mediocre middle. The merger might realize substantial cost reductions from slashing overhead and administrative cost, but it would take value beyond that to make this a decent deal. If the merger is approved, expect an epic, ego-fueled battle for control of the combined firm and for the distribution of its earnings to partners.

In other news, consulting and business outsourcing giant, Accenture, reported encouraging third-quarter results that the firm characterized as a momentum builder. Accenture executives cited strong performance in their management and technology consulting practices as an indicator that the global economy is improving.

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Walter Kiechel on the Strategy Revolution

Walter KiechelWalter Kiechel is the author of The Lords of Strategy: The Secret Intellectual History of the New Corporate World, which recounts the rise of the big consulting firms and how they came to influence every aspect of the competitive behavior of today’s corporations.

Keichel is a former managing editor at Fortune magazine, and was also the editorial director of Harvard Business Publishing from 1998 to 2002. I asked him about the impact of the ideas of pioneering strategy consultants and academics, and what’s next in the evolution of business ideas.

Read my interview with Walter Kiechel.

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