Sunday, June 5, 2016

A tangential view on the use of consultants by Ceredigion Council.

I was in Boston and Iceland last week, but did see a few articles around the use of Consultants by Ceredigion Council. I am always surprised where these people pop up.

I have work, on and off, with companies like PWC, Deloitte, Mckinseys and Arthur Anderson (remember them) in a multi-national company setting for the last 20 years. Most of the time we are both working for the client on projects like the NHS IT systems(blah). I am not a paid for consultant, but work for a vendor and get sent in when  things go wrong or future business is at risk. I do this world wide and the same principles seem to hold worldwide.

All the consultants from such firms have no problems with a lack self
confidence and no hint of self doubt, though competence has varied
right across the full spectrum. They tend  not to believe they can be wrong
or that their might be a better way than what they alone suggest. I
have found it typical behavior that any suggestions for improvement
are treated as an attack (much like a large wedge of political types).

Such consulting firms add value if you want specific advice, for example how to buy a derivative contract to mitigate financial risk, how to reduce a tax bill, changing a pension scheme, audit or M/A type of events. The bright ones are involved in the accounting side or helping clients avoid tax. For specific well bounded tasks such consultants are invaluable. They seem OK at improving business process when set specific well defined tasks (they get the ideas from existing staff) and very poor at architecting solutions or building software.

However, in the more general consulting role they fill one or more of 4 rolls

1. Customer management do not have the political capital or just the minerals to carry out a change. The customers tells PWC et al what they want to happen and PWC et al puts it in a better formatted report to support the proposed changed. The customers then cites PWC et al as justification for pushing on with a change that the customer perceives as having reputational risk. I assume this is
why Ceredigion council have hired PWC to back up bad news that exec management and the councilors don't feel empowered to effect.

2. PWC et al recycle what they saw as good practice in the last place they visited. The report is a rehash. The need for outside consultants is usually a sign that you have weak management or the exec level don't trust them. PWC et al can't get close enough to a business(whatever it is) in a few weeks to really understand where the savings are.

3. They redistribute cost. They move cost from one column to another. There is no net saving, but on paper to those who don't think and look a little wider will accept it on face value. So if the council moves cost to an other public service, say the NHS, there is no saving. The council has a moral duty not to do this, PWC et al have no such duty in pushing a council to do it to get a fee.

I suspect the parking suggestion falls into this category. PWC et al take their cut, so there is a net loss to the system (think Ceredigion local ecosystem).

4. PWC et al are strong on management theory but less strong on implementation. What works in a MBA text book may or may not transfer to the real world. They are better at setting success criteria and writing contracts than you are, so they always win and they base their business model on it.

Council(like any other) exec-management love it as they are not responsible and councilors(or company board) typically are not as experienced at playing this game, so find it hard to give both the appointment and subsequent proposals proper scrutiny.

So my summary of just under 20 years of interacting with PWC et al suggest that buying such generalist services in an attempt to save cost will get the muppet that was on the bench (corp. speak for employee that has no work), they will write up what you tell them and steal a bit from the last job they did, taking a fee out of the Ceredigion eco-system.

Its unlikely to be a great outcome. If the savings were tangible, I suspect the FOI, from the paper that sometimes, maybe, makes things up, would have been successful.