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IMT 581: Case Study Analysis : Roles of Consultants

by on November 17, 2010

In the global dynamic economy, consulting services sometimes are extremely necessary due to the skills and knowledge they offer. Consultants have in-depth knowledge of certain areas, yet they also have broad knowledge as their consulting experience is accumulated. Therefore, for any organization, to hire consultants is to empower with additional skills, intelligent advice, and even outsider perspective. Nevertheless, there are disadvantages associated with hiring consultants. The top disadvantage is consultant service fee. This paper focuses on analyzing different cases, in which consultants led organizations into disasters, and cases in which consultants have helped organizations achieve huge benefits. We compare and contrast these cases and evaluate the strengths and weaknesses of consultants that led a case to failure or success. To overcome these challenges, we present some evaluating factors for the clients to consider the type and the benefits of hiring consultants.

We have discussed four important case studies highlighting two different roles of consultants – consultants as doctors and consultants as Engineers. The first case study is about the famous PricewaterhouseCoopers and Satyam Corporations scandal, where in PwC was involved in some fraudulent activities. PWC either could not identify the mismatched number on Satyam’s balance sheets or purposely ignored it. The second case is similar to first one where KPMG conducted an auditing fraud for its client Countrywide by getting involved in changing the companies’ accounts and tax sheets. These consultant roles are doctors which assist a company on regular basis with some domain knowledge expertise. The third and fourth case study talks about technology consulting. Deloitte and Los Angeles Unified School District had a big legal battle over a big settlement which Deloitte had to pay LAUSD for failing in their technical project. Deloitte miserably failed to implement a SAP system for an academic pay roll system, a classic example of failed collaboration efforts. The last case is Accenture feud with Centrica, where Accenture failed in their effort to create a billing system for Centrica. Due to Accenture’s lack of responsibility when the defect showed up, it ended up in a nasty legal feud. Eventually, Accenture ended up paying a huge settlement. From all these cases, we talk about some insights that we learnt from each case study.

Furthermore, we also have also discussed some case studies which show the role of consultants in implementing solutions which benefited the companies in some way or the other. The cases that we have discussed are Google and Conyer Dill & Perman case which shows how Conyer Dill & Pearman, a legal advising firm, helped Google cut its tax-rate from 35% to 2.4% using the ‘Double Irish’ and ‘Dutch Sandwich’ strategy. Second case study is Helsana Versicherungen AG and Accenture Consulting that shows how Accenture helped Helsana, a health care industry, implemented a data warehouse that was compliant with other existing technologies used in the company. Also, this system improved the company’s overall productivity as the executives and sales staff used this system to predict certain factors affecting the business. Finally we discuss Booze Allen Hamilton and Defense Information System Agency (DISA) case which shows how Booze Allen Hamilton has worked through the implementing solutions for DISA in developing Digital Video Broadcast satellite which helps war fighters to send video and data transmissions using satellite resources.

Based on the seven case studies discussed above, in the next section we form a discussion that suggests the factors that client must keep in mind before hiring a consultant. The factors discussed are:
1. Subject matter expertise
2. Portfolio
3. Trust
4. Detail oriented
5. Leadership and collaboration
6. Client relations
7. Think ahead

We conclude by saying that consultants play vital roles in the growth of companies. As demonstrated above, companies have gained huge profits and benefits from hiring consultants, since they provide specialized knowledge and expertise. Consultants also bring innovative ways to look at the problems, for example: the Google Double Sandwich. Yet, it is not always the promise that consultants bring good things for any organizations. We suggest that any organization evaluate the seven proposed factors before hiring consultants. The seven proposed factors serve to reduce risks that an organization faces when hiring the consultants.

The case is written by Ruchi Junnarkar, Tien Nguyen, and Mansi Sharma

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10 Comments
  1. Norah Abokhodair permalink

    I agree with you on the huge role that consultants play in the growth of companies, but there are some factors that I think guarantee the success of these consulting cases.

    In your analysis you suggested the factors that clients must keep in mind before hiring a consultant. I would like to suggest some points that the consulting firm should manage after implementing/suggesting solutions, to accomplish the desired output:

    1- The follow-up process after the implementation phase is one of the main reasons for the success of any consulting process. This critical phase seems to be the point where many consultants do not pay enough attention towards developing and implementing it.

    2- Goals must be clearly defined in the consulting process, as well as clear solution and success metrics.

    3- Consultants have to define when they should consider their solution successful. Is it when the consulting firm receives the payment? Or when the suggested/implemented solution by the consulting firm has given the required results?

  2. All,

    I’d like to follow up on Norah’s comment, because she has raised two points I think are really critical, and not fully emphasized in your case: goals and success. Or, put another way:

    1. A careful initial process that establishes a clear purpose for the project.
    2. Clearly defined success metrics.

    To be fair, your four failure cases do involve a number of legal scandals — not so much a failure to establish goals and success metrics as a failure to make good decisions. But: did you notice, in your studies, any question of process that seemed to contribute to project success?

    Best,
    Ross, on behalf of Ahsand and Sanjeevi

  3. Consultant is an interesting position. Just like Kevin said in class, they are sometimes telling you the time by using your watch. I agree with your case finding that consulting can bring profits and benefits for a company, but they also have drawbacks. I know some of the consultant will provide options that can bond with clients and try to development a long term bonding relationship with clients to warning more money. Maybe we should add one more role for consultant—- salesman.

  4. Thomas Zhenhua Wang permalink

    One thing that an organization must evaluate before they hire any consultant is their readiness for that new project. You must at least know a little bit about the situation you have in your organization and the product you want to use. You cannot rely on an external consultants to evaluate these information for you not only because they have little knowledge about the information of your organization, but also the natural tendency to persuade you into a certain project for obvious financial purpose. It is like some orange buyers always ask the seller the stupid question if these oranges you are selling are sweet. You will always get a positive answer. The difference in hiring a consultant is the problem is much more complex. Consultants will always give you an answer that leaves you little choice but to get the green light to go. And in most cases, you are not sure what this orange really is. Organizations must have the basic knowledges to understand the problem and the possible solution, of course not entirely through what the consultants tell you.

  5. Jitsuko permalink

    I was surprised at the fact that there are so many legal battles between consulting firms and clients about failed projects. As pointed out by Norah and Ross, “what is successful?” and “management and consultants, who is responsible for what?” are critical questions.

    I believe there are a number of consulting cases that did not go well, but did not become a legal battle. Do you have any ideas what differentiates these cases from the cases that ended up with legal battles?

    – Jitsuko, on behalf of Swarnika and Scott

  6. I agree that consultants do play a vital role in any company and can provide significant insights into specific domains thus setting them on the right path but then as you stated the success is defined by what was eventually achieved and if the business goals were reached .But then these questions need to considered by the company and the consultants alike :

    1) What exactly are the business goals and how clearly are the defined and what is the role of the company in defining them and how will the consultants assist in that
    2) Are the consultants expected to work on projects/modules beyond the defined scope and if so,till what level of completion
    3) How do you specify payment metrics ? Do you define it by goals completed or by the amount of hours invested in the job or is it fixed ?

  7. When we started our case study analysis, we had come across an article debating whether bringing in consultants or bringing in coaches to train leaders is good while bringing change in an organization. It showed that consultants could bring immediate change. In my opinion, consultants are brought in to help the organization where it lacks. However, as you mentioned in your post, hiring consultants might go wrong too. To reduce risks involved in dealing with consultants, organizations can analyze what they want to achieve, in what decisions they actually require consultant’s help, Also, it should be decided on which aspects of the project the consultant’s opinion will be taken into consideration.

    -Gauravee, Surry and Jeroen

  8. This case study seems very relevant to my work experience. I have often noticed that while working as a consultant, the first and foremost thing is that you are treated as an external entity. Internal teams and employees are hesitant to discuss the organization’s problems and gaps. Therefore, it’s very essential to have an ongoing communication of the consultant (or a team of consultants) with the team as well as stakeholders. Moreover, there is always a need of laying out a structured plan in a meeting where you have all the key people of the team involved. This is important since, being a consultant, you are new to the environment and you need inputs from people who are actually going to use the system or will somehow be affected by the system.

    Often it’s to easy to state that the goals must be clearly defined. While working as a consultant, you come across changing requirements of clients and changing directions to the project. Having a very stringent approach might not help you much. Therefore, even though you layout a roadmap, make sure that you keep enough flexibility to adopt to changes that would occur eventually and prioritize the requirements. This would help the project to be well-scoped and complete on time.

    Shirish with Ke Ding.

  9. To follow up with Shirish’s and Gauravee’s comments above, consultants when hired are better off when they are no longer a consultant but an employee filling a key position. Consulting is a relationship business. That means we must develop trusting relationships with internal partners and clients. To me, trust means that both parties have the underlying conviction that the other person has the partner’s absolute best interests in mind.

    However, as it is widely accepted, client satisfaction is the “absolute KPI” that mostly consulting companies use to assess their success with the client. Quite often, this leads to scandals as we see in PwC-Satyam case or for that matter Goldman-Sachs case with the non-disclosure of mortgage-backed securities to the investors.

    – Ajay, Nishant and Paul.

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