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Outside help

Today I had news that Siemens* have decided that they are banning outside consultants as part of their cost cutting strategy.  It is an obvious and easy target, but I’m not sure if I think it is a wise choice.  To be sure, there are companies get in either the wrong help or bring it in for all the wrong reasons. 

I also got a call from another big company today from someone who was seeking just this kind of help.  He recognise that there are contributions far better made by an independent outsiders.  They should not only be skilled, but they help see things with fresh eyes, ensure that conversations are not controlled by those with power, allow difficult subjects to be raised and can provide insight and perspective.

In both our corporate and private lives I think we all gain value from someone else to help us sift through ‘our stuff’.  Asking for help, and doing so from the right people is a real life skill .

“The gift of friendship… a willingness to listen… a pair of helping hands… a whisper from the heart. That someone cares and understands.”

 “The best place to find a hand is at the end of your own arm”    Swedish Proverb

 

 

* “SIEMENS BANS EXTERNAL CONSULTANTS

Siemens is eradicating its use of external management consultants as part of a major cost savings plan – a move that highlights the dangers to consultants in an economic downturn.

Chief executive of the German engineering group Peter Löscher has written to managers telling them that contracts with consultants must be phased out quickly and that the group will use only inhouse consultants in future.

The aim is to save about €300 million (£267 million) on consultancy fees as part of a larger cost-cutting plan designed to reduce administrative costs by €1.2 billion by 2010. The wide-scale plan, which targets 10% of Siemens’ overheads, includes the removal of consultants, staff cuts and efficiency improvements.

Any exceptions to the ban on consultants at Siemens will need the approval of the CEO or CFO, and the consultants will have to prove that the economic benefit of their work will exceed their costs.”

This entry was posted on Monday, February 16th, 2009 at 17:34 and is filed under Business Change, Leadership. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “Outside help”

  1. Rob Robson says:
    16 February , 2009 at 20:40

    There’s no doubt that consultants can and do add value.

    Not all consultants are good, though. And not all good consultants are well used. I think that the latter is a bigger problem than the former.

    Being with my new employer now for 6 months, and in my first internal corporate role, I can see that we’ve wasted money on consultants because we’ve asked them to do things that we could and should have done ourselves.

    Hold back the work for consultants that really does need external expertise or independence, and you won’t go far wrong.

    Rob Robson
    iStadia.com

  2. richardderwentcooke says:
    16 February , 2009 at 20:42

    That is a good summary Rob. Of course it takes experience and judgement to knowwhat falls into this category.

    As I said, I got a call only this morning from a big company smart enough to know where they needed an outsider to help them. It is only a day but I suspect it will make a big difference to how that day pays off for them. 1 consultants day divided offer 40 internal staffs prodictivity for some months to come is a pretty small investment to a reasonal payback

  3. Vladimir Dimitroff says:
    17 February , 2009 at 09:02

    Such knee-jerk decisions are made after a cost review notices the bills from Big Five firms (they have swallowed the bulk of those €300M from Siemens). But their services (under a general cost category ‘Consultancy’) are not only ‘management consultancy’, there is a lot of IT work (system integration and development) lumped there, and an increasing portion of BPO (business process outsourcing) those firms provide.

    From the 3 main reasons that companies need external help:

    – Lack of expertise / knowledge in certain areas
    – Need for independent, impartial view of their business
    – Shortage of internal resources, despite presence of know-how

    the vast bulk of the heavy Big Five bills is for the third: effectively a workforce which is not on the payroll. This is not consulting (which, in mydictionary, means advising), just temporary contracted labour for legwork, not so much brainwork (albeit white-collar legwork).

    After reporting successful savings, Siemens (and similar corporations) will discover thet they actually need those outsiders.Soon (typically it happens 2 quarters later) they will open back doors to let them in again. With limited scope and mandate initially, but once those Big guys get their foot inthe (back)door, there’s no stopping them. Guess who will lose? (With a Siemens-like strategy it’s the boutique/niche firms and individual consultants).

    Luckily, not every company has this approach- where we have survived and thrived are companies that differentiate: our best clients did reduce overall spending on ‘Consultancy’, but cut form the big firms, where 50% cut is a big saving. They didn’t touch small providers, even increased the budget portion allocated to them, as they got the same (or better) value for a fraction of the previous cost with the Accenture-s of this world. (I am talking about ‘proper’ consultncy; when it comes to ‘contractor’ workforce, small firms just cannot provide the numbers, and for BPO they don’t have the infrastructure).

    I imagine the vast majority of consultants on Ecademy are small firms like mine (or independent individuals) – and see no reason to worry about such news. Make themost of the cost-cutting wave by demonstrating to your corporate clients your flexibility, lean structure, near-zero overheads and, not least, much easier to manage vendor relationships (a headache with big firms).

    Best of luck!
    V.

  4. Vladimir Dimitroff says:
    17 February , 2009 at 09:05

    I was a bit optimistic with that prediction above, underestimated this crisis. It is, in fact… 3 quarters.

    I just learned from my team today that at least 2 big corporate clients have made porvision to cut sharply on consulting by the end of March, and they are making contingency provisions to ‘survive’ without their consultants till.. the end of the year.

    So, if you are a consultant – brace for a ‘lean diet’ for 3 quarters, then they will call you back!
    Cheerz,
    V.

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