| | 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 implementation
and the consultancy goes | |
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| | 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 with a
reference group of | |
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| | 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
repeatedly with Compass, | |
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| | 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 | |
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| | people. You need to know
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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