Boutiques: a question of trust

The dark, mysterious days of high-brow consultancy at strategy houses such as
McKinsey and Arthur D Little have long since gone for accountants and IT

Accounting firms have moved on from simply providing advice, and now help
customers implement vast IT systems ­ with mixed results.

IT professionals, on the other hand, morphed into IT consultants, whose
employers sought to convince clients they were not just there to whack in some
IT kit and disappear. And while they were right about being there for the long
term, many outstayed their welcome, with six-month projects stretching into
18-month developments, smashing budgets in the process.

With all parties chastened by the experience, things began to change. The IT
giants took on business advisory expertise from accountants, implementers made
more effort to maintain service levels, and project management specialists have
had a whale of a time mediating between client and IT consultants.

Despite these changes, many businesses have looked further than the usual
consultancy-turned IT implementation provider for IT advice. Different types of
company, with different types of business expertise, are all calling themselves
business advisers, and proving popular.

Smaller software resellers with expertise in a particular sector are sticking
around long after clients have rolled out the new applications. Even the big
consultancies are leaning on the little guys when customers really want some
specialist advice. Many such small firms are known as boutiques ­ essentially a
catch-all term for business advisers outside the big IT experts, who are not
tied to a particular software company. Some don’t even advise on IT at all.


Xantus Consulting is one such boutique. An established IT business, Xantus is
software-agnostic, and its most valuable work comes from dealing with clients on
an ongoing ­often ad hoc­ basis.

Xantus director Heath Jackson believes that one of the catalysts for changing
attitudes towards IT boutiques is that even the largest businesses no longer
have vast swathes of their own IT experts, having outsourced much of the IT
function. As a result, businesses looking to change their IT require outside

‘Many of the IT consultancies have seen this and looked to move into service
provision over the last few years,’ explains Jackson. ‘When clients want an
assignment undertaken, they turn to organisations like us. Lots of clients see
us as part of their extended team.’

Jackson says that businesses may not see the larger consultancies as ‘trusted
advisers’, resulting in problems arising with project expectations. At its
worst, both parties end up poring over contracts and service level agreements,
and the relationship breaks down entirely.

Providing independent IT advice is a key selling point for Xantus, but
keeping up to speed with IT developments requires good relationships with IT
‘We maintain our software independence,’ says Jackson. ‘It can be tricky to do
so but not as difficult as you’d think.’

He says the software companies soon understand a consultancy’s
vendor-agnostic position.

‘Clients don’t know what they’ll get with large organisations,’ he says.
‘They come to a boutique like us for a specific thing. They know what we’ll
Jackson says a boutique consultancy needs to have a particular area of expertise
and is often involved in long-term relationships with clients.


From a completely different business background to Xantus, Hackett Group has
moved from being a back-office benchmarking expert to the type of trusted
adviser that Jackson speaks of, albeit on a grander scale. The focus on close
client relationship and very specific advice places Hackett firmly in the
boutique market.

‘We position ourselves as a global strategic advisory firm,’ says its Europe
VP, Michael Campbell. He says the firm can define ‘world-class performance’ in
back-office functions for clients, and the core of this is focused on
‘facilitating relationships’ as clients like to have ‘someone they can call’.

Hackett makes the most of its benchmarking tools not only to show clients how
they compare to others, but to help them manage change using best practice that
Hackett itself has witnessed in the field.

‘We’re trying to provide insight based on empirical data,’ says Campbell. ‘By
having an ongoing dialogue we’re able to have a better channel for advice.’

While Hackett looks to differentiate itself, Campbell believes the ‘whole
panorama’ of rivals ­ the Big Four accounting firms, boutiques, IT research
analysts such as Gartner, strategic houses such as McKinsey ­ are looking to win
the firm’s clients.


Touchstone used to be known as a traditional IT reseller, but a new managing
director has rebranded the firm as a mid-market business software and consulting
services provider.

The firm now focuses on a number of key vertical markets, and keeps a range
of software choices on hand for clients. Not completely agnostic then, but the
facilitator of the company’s new strategy, MD Adrian McNay, is certain that the
move away from what commentators often refer to as a ‘cowboy’ market has worked
wonders for clients.

‘As a reseller, service work drags through from that, but what has happened
is that clients said they wanted us a trusted adviser: “Forget about the
product; come and sit down with us and look at helping us achieve our business
goals.” They want us to look at their processes, then look at what software
applications are appropriate.’

McNay says that clients take their business to Touchstone because all they
get from strategists is a theoretical document about how to change their
businesses, which is not deliverable in the real world.

The latest Management Consultancy league table of the top 75 UK firms
contains a ‘longtail’ of smaller advisers that are performing well. Many have
followed the same ‘expert advisory boutique’ route as Xantus, Hackett and
Touchstone. Jackson sees an inevitable shift in the marketplace, with
consultancies swallowing each other up, but those that can recruit well and keep
their ‘boutique’ style of work ethic will continue to prosper.

‘I don’t see why there can’t be more firms in the £10m-£100m revenue
bracket,’ says Jackson. ‘There’s still lots to spare in the market.’


With many consulting firms looking to expand to meet the steadily growing
demand for consultancy and advice, hiring the right people has never been more

Xantus director Heath Jackson says his firm wins recruiting battles against
the big IT consultancies by offering salaries as good as, ‘if not better’ than,
theirs. ‘As we get bigger and maintain quality, we’ll get larger clients and
more breadth,’ Jackson says.

To complicate matters, the three Big Four firms (PwC, Ernst &Young and
KPMG) that have kept out of business advisory over the past few years because of
non-compete agreements taken out when they sold their consulting arms, are now
back in the frame. But while they can build up business process advisory through
their old boy networks and their own high standing as businesses, it looks all
but impossible in the current market for them to push back into IT consulting
and implementation. While they claim not to be interested in such work, the
suspicion is that this refusal to engage is due principally to market and
recruitment conditions.

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