The Challenge

One of the big challenges I see companies struggling with, is the cost effectiveness of Outsourcing, Mergers & Acquisitions. Most companies are set up well for success in their businesses, but when they have to manage major change or transformation, then they struggle.

According to industry research, only 26% of companies using Transformation partners (inc. the big-5 consulting firms) report that they are “completely” or “very” satisfied with the results.

The Quality of Staff

So why is this the case? Well, although the Big-5 partners have tier 1 people who do have the skills to do the job properly, they are not the folks they engage, but they keep those folks just for winning new business, or for overseeing 10-20 major deals. This means that the client gets tier 2 or even tier 3 staff actually performing and managing the work, instead of tier 1 staff. Those partners just grab someone off the street, give them a Big-5 consulting badge, and everyone thinks they are an expert. When I am managing a large transformation partner for outsourcing or mergers & acquisitions, I frequently have to insist that the partner replace some of the resources they have supplied with more highly skilled resources.

Without the right skills engaged, the work can start to go off the rails. Problems are not caught early enough, so the work has to be redone, often at the client’s expense.

The Quality of Staff Impacts the Quality of the Solution

The root cause is typically not poor project management, but a lack of highly experienced technical expertise. For example, the partner chooses technical solutions that are fundamentally flawed, new late-stage solutions are then needed, and work has to be redone.

Accountability

Looking at this from the IT leadership perspective, a very common mistake is to have the Transformation partner report directly to the CIO. CIOs are just too busy to dedicate 40+ hours/week just to managing an acquisition or an outsource. This means that an enormous amount of trust gets placed in the Transformation partners. For example, leaving a major partner like KPMG, Accenture, etc. to manage their own work inevitably creates a Conflict of Interest. This is like leaving the Fox Guarding the Hen House!

Every Transformation Has Problems

You have to ask yourself:

• Will the big consulting company ever tell you that they are doing a bad job, or will their staff feel pressure to cover that up?
• Will they be honest about their mistakes, and about the cost of those mistakes?
• Will they pay for their mistakes, or will you?
• Will they be loyal to their own company, or to yours? It can’t be both!

Independent Professional Expertise

So, Independent professional expertise is needed. Somebody who is loyal to your corporation, not to the partner, and will tell you the unbiased truth. Somebody who has deep technical expertise at the CIO level, and can truly assess what is going on. Someone who will actively manage the partner. Without this, the partner will take the path of least resistance and greatest cost, often delivering late.

Essentially, the current CIO needs to clone himself or herself to manage the work and frankly, that’s where I come in.

One of the roles in which I have been able to make a major impact on companies is in the role of managing the partners of large-scale Transformations. Frequently, the CIO of a major corporation will engage me and have me lead the Transformation on their behalf. I am not on the partners payroll, so I am 100% loyal to the corporation.

Being dedicated to leading the Transformation from the corporation’s perspective allows the proper time to dig into the ongoing partner activities and validate them from a technical standpoint, often catching and rectifying issues at an early stage of each workstream. It also allows a much stronger partnership with the vendor.

Experienced Leadership

One such corporation had given a global outsource program to one of the Big 5 outsource partners. The CIO knew he did not have the bandwidth to handle the program himself, so he brought me onboard to manage it for him. The work was divided into workstreams covering data centers, networking, software development, QA, help desk, etc. etc. In every area, I found that the solutions proposed by the partner’s team on the ground were not optimal and needed to be modified. Several of their workstream leaders had to be replaced. By putting strict checks in place and tightly managing the IT design and workstream progress, I was able to deliver all of the project on time, creating substantial cost savings.

With other companies, when looking at IT integration following an acquisition, I have often been able to shortcut the Transformation partner’s proposed solutions, delivering the exact same business benefits, but at a mere fraction (sometimes 1/10^th) of the cost.

I have a background as a consultant to IBM on product design and have been working in IT Executive roles in Europe and the United States for 20 years. I have over a dozen patents and have just written a book that some describe as a “blueprint” for the CIO/CTO roles.

If you would like further information, or if you need business or IT innovation to help solve a problem, please get in touch using the button below.