Well lets say you're a guy who runs the 10-year-old analytics platform for your company; your team's job is to deliver a bunch of charts and data to the executive team on the performance of the company on a weekly basis.
That's not an easy job, because you've got a shitton of unstructured data, new data sources coming online all the time, and a patchwork of analysis tools. This work would be a hell of a lot easier and more accurate and maybe even cheaper in the long run if you had an analytics layer that was more modern - but you don't have time to make the case to the CIO, because you're too busy just running the reports and doing the job that you're paid to do.
However, maybe a guy like me is having a convo with his client the CIO and she says "Y'know, Eisenstein thinks we need a new analytics plat, but he's busy on five other projects – can I pay you $5k to take a look at it and make me some recommendations?"
So I can sit with you, get your hot take, maybe bring in one of my guys who is shit-hot on dozens of analytics platforms, show you and your boss the trade-offs, costs, etc. If I'm lucky maybe you'll even hire one of my guys for a couple of months to install it and train you and your team up on it.
Way cheaper than interviewing and trying to do an apples-to-apples comparison between a dozen different analytics companies who're all gonna lie to your face about how their product is the best, probably politically better that you don't miss a full quarter of you doing your job, and your boss also gets to look good when I ship a sexy deck that shows how we're going to integrate all her peers' pet systems and provide much more timely, accurate, and readable results.
(I made this all up out of whole cloth, but the bottom line is sometimes incentives are aligned as such that a middle man can help you get there faster, cheaper, and better than DIY. On the other hand, consultants can also make things WAY worse as this thread illustrates)
The big consulting firm runs a program/project to deliver a result. Perhaps implement a new business system or technology or integration, optimize or implement a new process, perform some organizational change in the way things are done, etc.
Companies don’t have the skills or experience or expertise or resources or time in-house to do it themselves, so they essentially outsource the initiative or objective to a consulting firm.
It’s seen as less risky to go with name brand big consulting firm. But companies think they can pay little and get a quality delivery team, and the big consulting firms usually find a way to make a profit at the expense of quality by leveraging inexperienced consultants or consultants overseas with no real world experience.
Agree with all of these except the “pay little.” Top consulting firms are crazy expensive to the point we could hire a team of several analysts and a manager for a few years for what we pay them.
Engagements are often around $100k a month and when I go looking for one of the consultants to help in an emergency, I often hear they are busy with something else (another client) and need a day to get the request started. When we’re paying 100k a month you better damn well have one person on deck or able to pivot immediately to us as if they are one of our employees.
$100,000 a month is nothing. That’s like 1-3 full time consultants, at like a $200-600 bill rate.
My current client is spending $300M+ a year on an implementation program, and they are going on their third year with 2-3 more to go.
When I say pay little, they need more people and/or more experienced people to actually get the job done right. But they end up off shoring to teams in India or green consultants with zero industry background and limited experience.
They choose the firm with the most compelling economics, but severely overlook quality. They forget that these are organizational changes that impact humans. That outsourcing to lower skilled or different cultural regions will impact communication and team dynamics and overall ability to get things done properly.
