Consulting companies tend to think of their customers' technology needs a whole lot more than their own. While making it their job to help clients use IT to run their businesses better, they've rarely been early adopters themselves. IT groups for those companies are trying to change that by blurring the lines between internal and external technology, adopting systems built with customers in mind, and extending internal systems to customers.
Any generalization about business-services and consulting companies comes with a disclaimer, simply because so many types of companies offer business services. Traditional consulting companies such as PricewaterhouseCoopers and EDS mingle with companies that offer human-resources staffing and management, printing and marketing services, and real-estate location services. But regardless of their niche, business-services firms distinguish themselves by primarily offering brainpower, not physical goods.
Consulting companies increasingly are willing to take their own advice. "We asked ourselves, if what we're telling our clients is so wonderful, how come we aren't doing it ourselves?" says Terry Milholland, CIO and chief technology officer of consulting and outsourcing company EDS. Since Milholland joined EDS a year and a half ago, the company has decided to treat its internal business users exactly as it would the customers that pay the bills. The technology group has started comparing its performance--on network, help-desk response time, and on-time application development--with that of EDS's most tech-smart clients.
The task is made simpler by Milholland's dual responsibilities. As CIO, he manages a relatively small IT staff of 100 that maintains EDS's systems. As CTO, he oversees all of the technology deployed to EDS's customers. So his IT department can tap the consultants and employees focused externally as a huge, de facto IT research and development group. EDS's infrastructure choices grow along with the services offered to its clients.
One example of that is a Cisco Systems-based IP network that EDS recently started selling to clients. EDS will adopt it internally in the second half of the year, creating what it expects to be 20% to 40% cost savings. Other initiatives on the schedule include deploying wireless networks and customer-relationship management applications.
First, however, EDS is making up for lost time. "EDS never invested in itself," Milholland says. His IT group is cleaning up the company's financial and back-office systems, which were a kludge of proprietary applications that made it tricky to access financial data. EDS will use SAP for its primary enterprise applications. It's started to pay off. Milholland estimates that since the company started cleaning up its systems in the last two years, it's cut $2 billion in costs. It did that by streamlining the IT systems for 48 narrowly focused business units--each with dedicated service delivery, sales, and support functions--to four global lines of business. It also increased use of standardized tools, templates, and processes.
Other business-services companies are finding it efficient to use the same technology they're selling to customers. Gevity HR (formerly Staff Leasing Inc.), a Bradenton, Fla., business that outsources the HR and payroll functions for businesses, is developing a portal that will serve as a single point of access for HR information. The as-yet-unnamed portal, which will be used by both internal employees and the HR departments of Gevity HR customers, connects four existing Gevity HR Web sites: its intranet; StaffWeb, an extranet that links to partners and customers; PeopleSense, an early HR portal for customers; and GevityHR.com. The portal is built with Oracle Portal, part of Oracle's9i database, and Interwoven Inc.'s content-management system. The portal will help the company connect its systems more closely to its customers' systems, and give customers a valuable resource by letting them access HR information directly without going through a Gevity HR employee.
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Gevity's HR portal will include tools to manage personnel, CIO Harris says. | |
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The demand for consulting companies to provide technology links between consultants and their customers is so high that PricewaterhouseCoopers global CIO Ellen Knapp has a word for it: outfrastructure. The goal is to give customers access to the enormous knowledge base of its consultants. She says building secure bridges to facilitate this communication might be the biggest challenge facing business-services companies and compares it with the efforts of manufacturers to build exchanges. But while a large automotive supplier can limit the number of participants in its exchange and dictate the technology those participants use, PricewaterhouseCoopers can't. It has literally millions of clients and partners, and, Knapp says, "We have no control, nor will we ever, of the devices they'll use to engage us."
Accordingly, PricewaterhouseCoopers is moving to a Web-based model, using a collection of knowledge-management and business-intelligence tools, to build an internal system it plans to let customers access. Security quickly becomes a major issue, too; not only is information about a project restricted to certain companies, it's usually restricted to individuals in that company who are involved with that project.
The demand for electronic delivery of PricewaterhouseCoopers' intellectual capital is coming from clients and consultants. "In the past, it was face to face, voice to voice, drag them around the world," Knapp says. That's an expensive model that turns consultants into road warriors--and often into former consultants. So PricewaterhouseCoopers is trying to open its knowledge stores to customers. That involves tagging information according to subject and relevance, and--to make sure there's still a human component, if necessary--linking it to experts who understand it.
Giving easier access to such knowledge is not something the company takes lightly. "Intellectual capital is our only product; it's all we have," says Knapp, formerly PricewaterhouseCoopers' chief knowledge officer. "We have an enormous requirement to know what we know and know what is no longer relevant." It's a huge task: PricewaterhouseCoopers has 180,000 employees scattered worldwide, each involved in separate customer projects. Content management, understanding what's there and what should be seen by which people, is daunting.
The company has appointed chief knowledge officers and knowledge managers--people whose job it is to capture information and build knowledge stores--for each of its geographic and operating divisions, yet Knapp says the company has taken only baby steps. Of all its divisions, the only one that's able to widely share its knowledge with customers is the tax-practice group.
Business-services companies want customers to be able to access information, and they also want to be able to gather and understand information about the customers. In an industry where the customer occupies such a central role, it's not surprising that service firms are starting to embrace CRM. Gevity HR's recent Oracle 11i implementation, for instance, includes significant CRM pieces.
Other business-services and consulting companies are embarking on similarly ambitious technology projects. If the trend continues, the industry might yet shed its reputation as a technology laggard. That would let the industry show, and not just tell, its customers what to do.
| Closeup Consulting & Business Services | ||||||
| Rank | Company | Revenue in millions | Revenue Change | Income (loss) in millions | Income Change | IT employees |
| 25 | Gevity HR | $3,104 | 14.9% | - | - | 93 |
| 42 | DynCorp | $1,809 | 34.5% | $10 | 65.2% | 7,130 |
| 74 | EDS | $19,227 | 2.6% | $1,143 | 171.5% | 135,000 |
| 79 | Wallace Computer Services Inc. | $1,565 | 2.3% | $23 | -70.3% | 1,870 |
| 88 | Ernst & Young LLP | $4,271 | 12.3% | - | - | 1,450 |
| 93 | Wheels Inc. | $1,700 | 10.0% | - | - | 110 |
| 109 | Ogilvy & Mather North America | $1,500 | - | - | - | 350 |
| 121 | Towers Perrin | $1,450 | - | - | - | 1,480 |
| 152 | Lanier Worldwide Inc. | $1,326 | -9.7% | $5,727 | -23.7% | 650 |
| 178 | Maritz Inc. | $1,341 | 1.0% | - | - | 850 |
| 184 | Andersen | $8,388 | 15.4% | - | - | 3,408 |
| 207 | Banta Corp. | $1,538 | 16.9% | $59 | 6.8% | 230 |
| 211 | Spherion Corp. | $3,741 | 18.1% | $75 | 5.2% | 365 |
| 222 | KPMG Consulting Inc. | $2,856 | 20.5% | - | - | 86 |
| 223 | Manpower Inc. | $12,445 | 8.1% | $171 | 14.1% | 750 |
| 248 | Booz-Allen & Hamilton | $2,000 | - | - | - | 3,221 |
| 264 | Vertis Holding Inc. | - | - | - | - | 1,300 |
| 318 | Waste Management Inc. | $12,492 | -4.8% | ($97) | 75.6% | 490 |
| 330 | Kelly Services Inc. | $4,487 | 5.1% | $87 | 2.4% | 230 |
| 335 | Administaff Inc. | $3,709 | 64.0% | $17 | 80.6% | 113 |
| 340 | CDI Corp. | $1,717 | 7.1% | $33 | -36.5% | 300 |
| 378 | ServiceMaster Co. | $5,971 | 4.7% | $174 | 0.2% | 460 |
| 402 | Cintas Corp. | $2,160 | 13.6% | $223 | 15.0% | 185 |
| 407 | Solectron Corp. | $14,138 | 46.2% | $497 | 41.9% | 695 |
| 419 | Equity Office Properties Trust | $2,264 | 16.6% | $471 | 9.3% | 70 |
| 420 | Imation Corp. | $1,235 | -12.6% | ($4) | -109.1% | 186 |
| 423 | Pricewaterhouse Coopers |
$21,480 | - | - | - | 3,500 |
| 450 | Wackenhut Corp. | $2,505 | 16.4% | $17 | -14.3% | 110 |
| 452 | Solutia Inc. | $3,185 | 12.5% | $49 | -76.2% | 230 |
| 462 | Adecco SA Inc. | $16,237 | 44.0% | ($265) | 143.1% | 830 |
| 465 | EPIX Holdings Corp. | $1,300 | 33.5% | $ 7 | 296.5% | 40 |
Financial data from public information sources. Figures are for most recent fiscal year. IT employee information from InformationWeek 500 qualifying survey. Requested company footnotes at informationweek.com/855/splash.htm. |
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| SnapShot 500/Consulting | |
| Inside companies | |
| Average portion of revenue spent on IT | 7% |
| Portion of IT organizations that sell services or IT products to other companies | 52% |
| Portion of companies that say wireless E-commerce will contribute to E-business revenue stream | 61% |
| Senior IT executive is a member of executive management committee | 81% |
| Average portion of customers included in electronic supply chain | 35% |
| How companies divide their IT budgets | |
| New product and technology purchases | 22% |
| IT consulting and outsourcing | 13% |
| Research and development | 4% |
| Salaries and benefits | 33% |
| Applications | 17% |
| Everything else | 11% |
| How often companies re-examine their IT spending plans | |
| Daily | - |
| Weekly | 10% |
| Monthly | 55% |
| Quarterly | 29% |
| Twice a year | - |
| Annually | 6% |
| DATA: INFORMATIONWEEK RESEARCH | |