By Naked CIO, 17 November 2008 08:00
COMMENT
Sick of consultants knocking on your office door? The Naked CIO vents about the pointlessness of spending millions to save thousands.
Anyone who has seen the movie Office Space and remembers 'The Bobs' will no doubt be able to relate to the experiences my company is currently going through. Alternatively anyone who has been part of a restructuring or efficiency review will no doubt have sombre stories about the process and outcome.
My company, like many others, is part of a larger global enterprise. Currently there is a review by an outside company of all of our business functions to investigate and propose centralisation and consolidation opportunities. In short, we are paying a company millions of pounds to tell us how we can save thousands.
The Naked CIO
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For months I have been rambling about opportunities within our organisation that could save money and improve business functions, mostly through the effective application of automation and technology and through a full evaluation of business process. However, this is very different than the current exercise.
College grads no older than 25 years old are coming into my office, sending out in-depth surveys and professing best practice without an ounce of practical experience to back it up. Their philosophy stinks of short-term tactical cost-cutting and threatens long-term strategic benefit. They harbour preconceived notions that our organisation is inefficient and look only to facts that will support this theory. Essentially, they are ensuring a self-fulfilling prophecy in order to justify their overpriced and unnecessary services.
Am I bitter? No.
But I am profoundly frustrated that this process is non-inclusive and that the outcome seems to be decided.
My team and I have spent a great deal of time ensuring efficiencies and effective delivery of services to ensure our part of our company is consistently aware of and delivering value - yet in a world where consultants make money telling executives they can save money there is no appreciation of this work.
Their business model to save cost is simple - consolidate functions, outsource everything to cheaper labour markets, cut back labour until it bleeds and cut out layers of management. Their arrogance that we have not considered all of these options within our current environment is offensive. Yet the one question they do not ask is why we may have rejected these options - they only want the answers that will support their case and nothing else.
So these so-called experts come into our company and in a few months decisions made beyond my control will see many people jobless and essential functions outsourced and offshored. Functions will be consolidated, creating bottlenecks of service delivery that will cripple any ability to meet customer needs - and the reduction in staff will leave the organisation with neither the talent nor the resources to do anything about it.
Am I bitter? No.
I am sad. I am sad for my business and what will be left of it. I am sad for my staff. But most of all I am sad we will not be able to realise our goals of improving the function of IT and in turn become the stereotype of the ineffective IT world, not because of IT but because of executive leaders looking to save a few pence and not improve net worth.
Organisations need to learn that best practice and efficiencies come from hard work, good people and iterative processes of continuous improvement. Great organisations don't subscribe to consultant models of efficiency or cost savvy but rather the loyalty, culture and passion of the people that work for them.
Comments
There are 8 comments. Join the discussion
1. Karen Challinor
welcome to the world the rest of us live in
I've experienced what you are going through first hand from both your current position and all the levels below it on more than one occasion, you have my sympathy
short of starting your own company there is absolutely nothing you can do to change this, it will happen every time the red ink starts to appear on the company balance sheet, the company will be restructured, staff will be lost and somehow the work which could only be done by X employees before will now magically be done by a fraction of that number and woe betide anyone that fails in this, the balance sheet will go back to using black ink and the board will give themselves a bonus and a pat on the back
now you know why I'm such a cynic
2. swhitear
Some good points well made. It's a sad fact that a western business world dominated by MBA educated consultants (of which I am one) puts 'efficiency' above all else, without really understanding the long term implications of stripping a company to the bone. Such blind devotion to cost cutting destroys all that is rewarding about work environments; empowerment, job satisfaction, these things all seem to disappear. It also leaves the companies unwilling or unable to innovate and take risks - a sure way to destroy long term business models.
Many a great company has been taken down by people so focused on the short term numbers that they fail to see the long term impact of cost cutting decisions. However there are many culpable stakeholders here; not just the consultants, but also the senior management who employ them and the shareholders that bang their fists demanding action following a single quarter of missed targets.
Enlightened companies are out there, but they seem to be becoming rarer by the year.
3. anonymous
Efficiency Consultants, a.k.a. Expensive Hatchetmen for Clueless and kahuna-less board members concerned *ONLY* about their renumeration package.
I'm sure for a few pounds more, the efficiency consultancy will have a rapid reaction force of henchmen and axe-wielders who will do the dirty work of Redundancy Consultation and Frog-Marching people out of the building so the board can have both clean conscience and clean hands.
4. Simon Allen
As with her other comments, KC has hit the nail and - Yes, seen it before, particularly in 1990/93.
The only point I make is: Why do senior mgmt do this? I think the answer is simple - they do not understand the business and do not know what they are doing.
Because of that, they cannot discuss the business with you, and other middle mgmt, because it would fully reveal their ignorance. But they still need to make savings, so by hiring kids to do the dirty work, they find out some [wrong!] answers and can pretend to the main board that they know what is happening.
By the time the business makes a long slow roll over into the dirt, they will have moved on.
5. Richard
Why don't companies use their own trainees?
Why do companies hire expensive trainees from "consultancies" rather than using their own trainees: Who would probably produce the same answers, but much more cheaply and learn the business in the process.
As a young trainee, I was tasked with proposing the reorganisation of a department:
Regardless of the value of my proposals, I quickly learnt many sharp lessons about:
- Employee relations;
- Importance of involving the affected staff;
- Folly of imposing change from above;
- That things are often more complicated that they appear to outsiders.
- etc. etc.
Thanks to the tolerance of the staff affected, "improvements" were negotiated and accepted.
I emerged (slightly) less conceited and (slightly) wiser.
6. Radical Meldrew
Whilst the private sector pare themselves to the bone in the hope of better cost savings through efficiency the public sector continue to grow unchecked and are becoming more inefficient by the day. The former is driven by greed and the latter by a need to be in control - where is the sensible balance in all of this?
None of it is actually efficient and none of it is actually what is required in the long term. General opinion usually puts private and public enterprises at different ends of the spectrum but the consultancy path is the easiest option for both as it sidesteps any management responsibility for the inevitable ill-thought mess. Anything good however will be isolated and attributed to clear thinking from the management and cited as a bonus recommendation for the following year. The bottom line is that management in both of these sectors are no different when it comes to job protection - especially theirs!
7. drew stephenson
yep, welcome to the bottom line. in our organisation we seem to do this in one area or another every 6 months. and yet things don't actually change very much at all, wonder why that is...
8. Paul Senior
I find it a damming indictment of the industry I work in, that someone feels they way you do!
What has happened to make you feel this way is a complete lack of understanding of "value", the well hackneyed phrase "effiency" has turned into cost savings delivering no benefit other than to the consultants themselves!
A real failing to deliver services that make a substantial and sustainable difference within a business and deliver the “value” specified are no longer acceptable.
If you want to make a difference within your organisation please let me know and I would be more than happy to try and demonstrate to you why you have the wrong impression about my industry.