A recent article in Business Week is titled “Managing by the Numbers” and it focuses on IBM’s attempt to build a system to assign staff to appropriate engagements around the world. Rather than relying on manual processes, a central planning group is gathering capabilities for each of their employees and attempting to let the computer match skills to opportunities.
I have a lot of experience in consulting at a number of different organizations. If you are interested in the challenges (and opportunities) of running or being part of a professional services organization, I suggest that you read “Managing the Professional Services Firm” by David Maister.
The types of examples given in the book are staffing a web services engagement in the Philippines; there is an expensive (high ranking) consultant on the bench (meaning – unassigned and not currently earning income for the firm) in a faraway country vs. a less skilled (and cheaper) local consultant who could also be assigned to the job – which to choose? This is the type of “problem” that the program is supposed to solve. The implied conceit is that consultants are interchangeable, and you can just build a team out of individual skill sets, have them show up at the work site, and pull off the engagement.
When I worked at one of the large consulting firms, in order to save space, they went to a “hoteling” concept. Since consultants were usually on the road and not in the office, some bean counter figured that it would be cheaper to not give anyone a permanent office and just have them occupy whatever space was available on the occasion that they had to work in town. The company did attempt to link your phone to your location and sometimes even had a nameplate ready for you, along with a little cart for your office supplies, so you were able to get started working with a minimum of effort. The company only had to have office space for the people likely to show up, which was maybe 25% of the total staff on a given day, saving them in rent money.
What is interesting is that both of these examples treat consultants in a similar manner; as cogs in a machine, or interchangeable parts. This is a terrible assumption; consultants are human beings, and they don’t automatically function as a team just because you put people in the same room and give them an overall objective (a consulting engagement). In the case of technology consultants, which is most of what IBM offers, the problem is even more acute; even a casual reader of Dilbert or viewer of the classic movie “Office Space” knows that technology staff often have poor or difficult interpersonal skills, and so throwing together random staff in a room and assuming it will work out smoothly is just bananas.
As far as the office hoteling went, it was a disaster. Many times I went to the office and I knew absolutely no one; every time I sat next to a random cluster of refugees. The only constants were the executives (they had permanent offices); a few times I attempted to converse with them but it was pointless as they viewed me as a random intruder. There was no camaraderie; no team spirit; I just started working from home if I wasn’t on site (which was rare).
Why would a business that is ostensibly about people (the famous line that all their assets walk on the elevator each night) not even think for a minute about the basics of getting people to communicate, work together, and focus on teamwork? The article never really touched on this “broken” aspect of their business model.
Another element of this business model that is terrible is that it ignores the reality of time and space. If you are running a job as a consulting manager in say, Memphis, your staff comes in from around the country on Monday morning, bedraggled, and everyone finally is sitting in their seats around noon. No one works on Friday at a job site anymore; they all start leaving on Thursday in the early afternoon. Thus, best case, you get 1/2 day Monday, Tuesday, Wednesday and 3/4 of Thursday. This totals up to 3 1/4 days out of a 5 day week; but of course you charge the client for 5 days anyways. In addition, travel costs money – typically you’d add 15% – 20% onto total charges (client billings) for travel – and while this money is expensive to the client and costs the same to them as “consulting dollars”, it doesn’t add anything to the bottom line of the consulting firm.
The assumption also is that these consultants, who arrive on the job site not knowing one another, have some sort of common knowledge base and training, or understanding of the processes needed to run the engagement. This is usually wishful thinking; central training is not very robust, and just keeping up with the barrage of memos, expense policies, and personnel reviews consumes a lot of time (and adds nothing to the quality of the engagement).
What is the alternative to this model? One alternative is the “local office” model, where a local city like Chicago would hire their own staffs based on the needs of their customer base. These consultants know each other, and learn to work like a team. The local office invests in training unique to their needs, and staff can have local mentors. Travel is less painful; 5 days of work is received by the client rather than 3 1/4, and the staffing levels are much less variable (sometimes people don’t make it in at all in bad weather).
The “local model”, however, has problems – it is impossible to staff locally in a manner that leverages everything that is on the web site for services that IBM offers. For example, the web site touts services from supply chain management to specific types of technological consulting. On top of this, IBM claims industry expertise in a variety of areas, meaning that they need to provide 1) specific technical expertise 2) specific industry expertise 3) project management / consulting partner leadership in order to successfully complete the consulting job.
Thus in many instances the local office will be forced to bring in staff from outside the geographic vicinity in order to complete the job (as advertised; they could offer a more limited menu of services, but this typically isn’t done), and some other bean counter figured that it would be more efficient to leverage idle staff sitting elsewhere rather than to leave potential billing dollars unused.
I don’t blame IBM for attempting to put some rigor into their exercise of deploying consultants around the world in a more systematic manner; however, the real question is – what is accomplished by this activity, and is there a better way to meet the client needs (primarily local staffing, which may leave some holes in the skill set?)
Cross posted at LITGM