A recent survey by PA Consulting found that the millennium compliancee has raised awareness of IT as a strategic tool and put it firmly on the corporate agenda. But, while consultancies are reaping the benefits, recruitment remains a perennial problem. Mary Huntington reports on a booming sector. issue has put IT firmly on corporate agendas. And its importance in the scheme of things is reflected by the amount of work consultancy practices are doing.
Firms like PA, Cap Gemini, Druid, IBM Consulting and CMG are all very busy. Says Fons Kuijper, a member of PA’s management group: “The market is extremely buoyant in a whole variety of areas, including e-commerce and EMU. Many companies put key projects on hold while they were dealing with Y2K and now they are reactivating some of those projects.”
One key point coming out of PA’s survey of 200 UK organisations, he says, is that the millennium issue has brought IT and the business closer together, elevating it in the eyes of senior management. He sees this as a huge opportunity for the IT profession.
Andy Matthews, director of consulting at Cap Gemini, agrees that the way IT is viewed has changed over the last few years. “There is a realisation that IT is becoming more and more important. In certain cases it can change the business paradigm,” he says. “It allows people to do business in different ways and while they still need to regard IT as an enabler, they also need to understand what it can do for them.”
Cap Gemini is very busy in the sector, he says, with client concerns revolving around customer relationship management, applied knowledge management and e-commerce. “We have also had a lot of success in the financial sector with euro issues and we are finding that other sectors are also interested in that.”
In addition, he says, clients want to look at the effectiveness of big enterprise resource implementations such as SAP.
Consultancy Druid is much involved in the ERP area and has thrived over the last five years, with turnover growing from #3m in 1994-5 to #40m in 1997-8 and still rising. Says head of Druid UK Bill Waterson: “We focus on the delivery of business change through the implementation of integrated IT solutions, such as large ERP systems like SAP, Oracle and Baan.”
He sees a major issue facing some clients as a legacy of their haste in banging in Y2K compliant systems. “Once they are confident about compliance then they will look to achieve the business benefits they would have liked if there had been time. That will mean system tinkering or, more likely, the kind of business change programmes we traditionally undertake.”
John Black, an executive IT consultant with IBM Consulting Group, identifies a similar need among clients for “better alignment of business goals and IT direction and help to make more effective use of IT investment”. He says: “Our work ranges from IT strategy and IT architectural engagements for corporate enterprises through looking at application development effectiveness to specific focus areas such as IT security – a key issue with the growth of the Internet.”
The practice also supplies consulting to assist project and development management around individual projects. “That work blurs almost indistinguishably into IBM’s general services work. We try to make the link between high end consulting and actual implementation as seamless as possible,” says Black.
“It is a fascinating time,” he says. “We are seeing a breakdown in traditional industry barriers, for example, as retailers become banks. They need help to use IT effectively. Another key area for us is e-business. The potential for clients getting their fingers burnt by being too ambitious too soon is great.” The third major area is outsourcing, he adds. “Increasingly large organisations are realising that they need to focus on their core business – running the IT shop is not core. From our angle that means working with clients on outsourcing options and establishing joint value propositions for them and their outsourcing partner.”
But the growth in business in the IT consultancy sector brings its own problems for the consultancies. The skills shortage which dogs the sector is well documented.
Giles Orr, PricewaterhouseCoopers’ experienced hire recruitment manager for Peoplesoft and Oracle, says: “Recruitment is extremely difficult and becoming more so as more firms move into the market segments.” He adds: “The general softening in the market means clients are more cautious about signing for work and there is a flight to quality in terms of what they want.” As a result, he says, it is easier to utilise more senior members of staff than juniors.
In June last year IT staffing firm Best People set up a management consultancy arm in response to growing demand from some global clients. Says John Scott, head of the new division, Best Advice: “A shortage clearly exists.
What’s in demand are the newer IT skills in terms of Internet technologies and Y2K compliance skills in relation to the euro. Then there are skills triggered by various technologies and ongoing ones such as Cobol.”
Kevin Blunsum, associate director responsible for the management consultancy practice of CMG, agrees. “The major driver for the last 18 months has been Y2K and legacy skills such as Cobol are in great demand for companies which have decided to accommodate Y2K in existing systems. Lots of companies have systems with handcrafted applications and they are looking at how they can reduce the cost of ownership of a creaking infrastructure without losing rich functionality.”
He says “competences” such as Java, Unix and web-based skills are in demand while ERP expertise is much sought after, especially in the manufacturing world. “All the top five are looking for SAP skills,” he says.
A major proviso from many of the consultancies, however, is the need for consultancy skills on top of sector experience – or at least an aptitude for the role. Says PA’s Kuijper: “Interpersonal skills are as important as technical knowledge. You can have the best techies in the world but if they can’t relate to your customer, they won’t be good consultants.”
PA looks for consultancy skills and industry experience. “Consultancy experience is more easily placed on assignments – as a safe pair of hands – but clients want specific skill sets too. As a consultancy you need to be able to provide both.” In general, Kuijper looks for experience of a management function in an IT department. “Clients want to talk to people who have been there and understand the issues and pressures they are up against,” he says.
Druid has extended its headcount with its revenues and now has over 700 staff. Says Waterson: “We tend not to recruit people with ERP skills but for broader business skills in logistics, finance, commercials and manufacturing, coupled with IT and project lifecycle literacy.”
This approach gives the firm a commercial advantage and mitigates the skills shortage, he says, because there isn’t the same degree of scarcity associated with these resources.
“We have been able to keep up strong growth without diluting the quality of the people we bring in – we’re not chasing an ever-diminishing market demanding ever-higher fiscal returns. I have always believed that ERP skills can be acquired much more easily than those of industry specialisation.”
Training is the natural corollary of this policy and recruits go through a three month intensive induction period involving project lifecycles, vertical markets and ERP packages as well as Druid’s methodology. Says Waterson: “Because they are not recruited for their knowledge of a particular application, it is very easy to redeploy people within the business as the market moves to extended ERP with bolt-ons such as supply chain and e-commerce.”
IBM has its own way of dealing with the skills shortage. Says Black: “The majority of our consulting staff are developed internally from the implementation and delivery groups.”
The firm has also recruited externally, however, with significant numbers of senior consultants joining from other consultancies or from industry over the last few years. “Such recruits are very valuable because they bring in new perspectives and experience,” he says.
“We look for the right experience but, more importantly, the ability to apply that experience. You can have technical practitioners who are very good at what they do but if they don’t have vision they can’t step outside and turn experience into judgement.”
He adds: “Obviously interpersonal skills are important, the ability to listen, draw the right conclusions and influence in a sensitive way, helping the client through what can be difficult findings for them. But specific industry skills are increasingly important. The sheer complexity of a large bank, say, makes it difficult to do a technical consultancy engagement in that environment without some understanding of the issues.”
But having recruited these sought-after staff, how do the consultancies go about keeping them? Best Advice’s Scott says: “Retention is a problem. Our experience is that the average is dropping below the two year level.”
But, he says, there are a number of ways in which employers can counter this trend. “It is important to provide skills development and challenges. Staff want to work with challenging, leading edge technology and they want career development.”
He adds: “There are various fiscal and tax-efficient ways of locking people into an organisation, which kick in over a period of years rather than on an annual basis, such as performance-related pay and share options.
And, interestingly, a number of firms have policies which almost border on a commitment to long-term job security. That is an exceptionally powerful offering.” Alternative working environments, such as those offered by some of the Internet technology firms, are appealing, he says, as they offer flexibility in terms of hours and lifestyle.
“Flexible rewards and benefits packages are also an attractive offering for staff,” says Scott, adding that the rigid structures of the large consultancies do not go hand in hand with flexibility.
PwC, however, as one of the largest consultancies has overcome this problem.
Says Orr: “We have developed a flexible benefits fund called Choices, from which employees can opt for a variety of benefits. For example, a young person would want more cash while someone older might want extra holidays, childcare vouchers or pension contributions. Up to 20 percent of an employee’s basic can be spent on benefits too.” He adds: “We want to offer the best, most flexible remuneration package possible.”
Druid, says Waterson, has an attrition rate well below the industry average.
He attributes this to its rate of growth, which enables it to continually give people more challenging roles, and develop their skills. “We are certainly not the best payers,” he says wryly, “but the things that motivate people are not necessarily fiscal.”
As a publicly listed company, he adds, Druid has a differentiator as compared to the Big Five. “Everyone with a year’s service gets share options and these increase with position and years of service.” These make people feel that they have a stake in the company, he adds. “We see people taking care of resources as if they were their own.”
PA operates a similar system and offers rewards in terms of performance bonuses. Says Kuijper: “Shareholding works. It is one of the things that has transformed PA over the last six or seven years.”
Mary Huntington is a freelance journalist
Developing client relationships: Druid’s Sarah Rogers
Sarah Rogers joined Druid a year ago from manufacturer T&N, with experience as a project engineer and manager. “I wanted to meet more people and work in a team,” she says.
After intensive induction training, including business process overviews, and consultancy skills, Rogers spent two months shadowing senior consultants.
“Over the next six months I picked up more and more responsibility,” she says.
Since then she has been involved in the implementation of a new manufacturing process and aligning four new businesses as part of an ERP project. “About 50 percent of my work is IT,” she says.
So is she glad she made the move to Druid? “Yes. It is challenging and I really like the culture.” Druid has five core values: innovation, teamwork, delivery of results, enjoyment and responsibility. Says Rogers: “The firm really pushes you but it is very supportive and encouraging.”
The most difficult thing to get used to, she adds, was the pace. “People deliver what they promise; they are sharp, efficient and swift. There is no bureaucracy.” What she enjoys most is building client relationships. “We work with the client to develop appropriate solutions.”