Consulting costs dragging you down? Try smaller company over larger one
Are poor economic conditions truly the cause of corporate downsizing? Is the health of the economy a good indication of how well or how poorly companies are performing? The root cause for lay-offs has very little to do with the economy, and is more heavily impacted by the mismanagement of funds.
Fortune 500 and Fortune 100 companies are attempting to improve their business efficiencies by hiring consulting companies to offer valuable advice. Consultants are expected to travel to client sites across the country, and internationally, attempting to assess the business risk at every level of operation.
The problem with this approach is that the consulting companies are performing inefficiently.
They are deploying under qualified, new college graduates to visit client sites with the hopes that these individuals will miraculously learn specific industry knowledge overnight.
Many consulting companies, with their superior databases, filled with industry-specific knowledge are located in the abyss of the firm wide company intranet.
New hires at all levels do not receive proper timely training of all the available resources, leaving them with little to offer when they are at client sites.
The new college grads, called "consultants," are paired with more experienced senior consultants or managers.
The consulting team sets up shop at the client site in a less-than-desirable, unused office space, where sometimes access to the Internet is considered a blessing.
Meanwhile, the more experienced consultants are analyzing the client's business environment, while the less experienced consultants are cutting and pasting "important" information in an excel spreadsheet.
Keeping your eyes focused on the screen of your laptop conducting busy work creates a value added illusion for the client.
The client is paying exorbitant fees on an hourly basis for the advice of the expert consultants from the prestigious consulting company.
The name brand consulting company is charging fees based on their extensive overhead.
After all, the costs of flying, lodging, and meals to travel cross-country to perform busy work can become quite expensive.
For example, on a week-long project, a major printing company has spent over $75,000 on a team of consultants, who did not have industry specific knowledge or experience.
The consultants offered no value-added feedback but instead simply observed the daily operations of the company.
Essentially, the client has paid for the consultants to learn about the printing industry, but received nothing in return.
If this trend continues, companies will experience a negative impact on their bottom line. Once the costs outweigh the revenue generated, corporate-downsizing seems to be the only plausible solution.
Who better to define the core competencies of a business than the internal employees? Why not capitalize on the knowledge of those who participate in the daily operation of the company?
When companies are in need of counsel regarding "soft" issues such as improving firm-wide morale or making the workplace more desirable for women, why not ask the employees?
Hiring a consulting company to answer these types of questions is futile if there is not ongoing communication with the employees.
Instead of outsourcing this function, the internal research and development department, could administer questionnaires and surveys asking for feedback on areas of improvement.
If the company needs assistance for more operational issues, such as inadequate business risk assessment, or if operating efficiencies cannot be dramatically improved, consider seeking counsel from consulting firms with specific industry knowledge.
Smaller companies are less expensive and are more likely to have particular focuses as opposed to the larger companies, who attempt to be the jack-of-all-trades. Smaller companies have less overhead costs and will charge less for their services.
The cost savings will trickle down to improve and maintain the salaries of the employees of the organization, thereby reducing corporate downsizing as well as improving employee retention.
Neelu K. Gulri is a part of the Information Technology Auditing group at CompuCredit, headquartered in Atlanta, Ga. She can be reached at firstname.lastname@example.org.