| | By Mick James
I don’t think I’m
alone in sensing a
certain “back-to-basics”
mood in the air at the
moment. While there are
still the complex global
mega-deals and tortuous
Government IT contracts,
there’s also an
increasing demand for
what can only describe
as “straight”
consultancy, to the
extent that some are
questioning whether much
of what the bigger firms
do can really be
described as consultancy
at all.
Andy Chestnutt,
managing director of
Compass Management
Consultancy, is clear on
the matter. “My
definition of
consultancy is that you
go in to help your
client resolve a
problem,” he says.
“There are so many
people these days that I
would not term as
consultants but systems
integrators or
implementers. There’s a
whole range of things
that large consultancies
do –they’ve built up so
many people and now they
have to feed them.”
Chestnutt is a firm
believer in the
separation of
consultancy and
implementation: “Too
many of the
consultancies have a
name as implementers.
The problem is that when
they go in and do an | |
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| | implementation and the
consultancy goes wrong,
consultancy gets a bad
name. I would have
those two separated out,
using consultants to
identify the problem and
resolve it, and then
carry out programme
assurance while someone
else does the
implementation.”
So strongly does he
feel about this that
Compass has left the
Management Consultancies
Association which it
feels is now too heavily
weighted towards
implementation.
It’s a bold step, but
one which he feels is
necessary to underline
the purity of Compass’s
approach as a
stand-alone consultancy
with a strong
consultancy methodology.
Methodology used to
be all the rage in the
early ‘90s, but it’s
something you rarely
hear mentioned nowadays.
However, it is central
to Compass’s approach.
The company’s roots go
back to the ‘80s, when a
group of Swedish
companies collaborated
to compare the
efficiency of their data
centres.
Now Compass has a
number of detailed
models which can be used
to analyse performance
in a number of areas,
notably IT, retail
banking and insurance.
The results offer
immediate comparison | |
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| | with a reference group
of companies across a
whole range of measures
relating to costs, cycle
times and so forth.
“It’s not just
benchmarking,” says
Chestnutt. “We’re not
just comparing two
numbers. The discrepancy
might be a result of a
policy that
differentiates you or is
part of your branding.
But because the models
are numeric we can tell
you how much that policy
costs you and you can
have a sensible debate
about it. This is about
root cause analysis and
it can apply to just
about anything – any
transaction that costs
something can be
analysed.”
The effectiveness of
this method, which
Compass calls
“fact-based
consultancy”, is that it
cuts through a lot of
the politics associated
with consultancy
projects.
“If you come in on a
consultancy project
someone is always going
to suffer,” says
Chestnutt. “If the
consultant says ‘In my
experience...’ that
person says ‘My
experience is different’
– you end up in a
yah-boo argument. We
say, here’s the data –
the facts speak for
themselves.”
Many companies go
through this exercise | |
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| | repeatedly with Compass,
and Chestnutt says there
is a measurable “Compass
effect” showing that
these companies
regularly outperform
their sector by up to
15%. In individual
projects the savings can
be even greater.
“When you analyse
your performance and
compare with your peers
the average savings in
the back office can be
25% to 30%,” he says.
“There’s so much money
around for organisations
to get hold of.”
In fact, the savings
are often comparable to
those promised by
outsourcers.
“If you’ve got the
scale of operations why
would outsourcing be any
cheaper than doing it
yourself?” asks
Chestnutt. “From a
financial perspective
outsourcing doesn’t add
up.”
But Compass is not
simply a collection of
financial models – a
fool with a tool is
still a fool, as the
saying goes, and
recruiting the right
consultants is an
important part of the
mix.
“It does require you
to understand the
business,” says
Chestnutt. “You can’t
take a purely numbers
view, you need to know
the impact of change on
the processes and the
people. You need to know | |
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| | the context.”
For this reason
Compass tends to hire
ex-COOs and CIOS. “You
can train an operations
person to be a
consultant, but you
can’t train a consultant
to be an operations
manager - you have to go
there and do it,” he
says. “If you’re a CIO
and the person who’s
talking to you is an
ex-CIO you can ask other
questions, say ‘I’ve got
this thorny problem,
what do you think?’”
Still privately
owned, Compass currently
employs 55 consultants
in the UK out of a total
of 250 spread across
global locations in
Europe, the US, South
Africa, South America
and Asia-Pacific. The
aim is to double the
headcount by 2008,
initially by growth in
existing sectors.
“We’re actively
targeting insurance and
other forms of banking –
that’s where the growth
is,” says Chestnutt.
“But you could do this
anywhere. People say
that their processes are
different, that you
can’t compare one
finance operation with
another – but I can
prove that you can.”
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