CXO

E-consultants find demand for services drying up

E-consultants caught up in the fervor of last year's demand cycle now seem surprised at the quick downturn. Columnist Tom Rodenhauser offers an explanation for the market's sudden change.

Commenting on e-consulting these days is a bit like visiting with crazy Aunt Gert: Do you chortle with the personality swings or cringe at the nuttiness?

Consider Xpedior’s 16 percent workforce cut this week. CEO David Campbell notes demand for e-services remains high even as the company chops 270 consultants (i.e. the billable folks). Really what he is saying is simple: Clients want the services we provide, they just don’t want to pay for our services.

Last year, the pure-plays boldly turned away business when milk and honey flowed freely from the online spigot. Now the pipeline is apparently empty, and yesterday’s stars are paying the price. To use consultant-speak: Optimizing boundless opportunity is exceedingly difficult to execute.

Anyone who has been in consulting knows that life is a roller coaster. Up becomes down, right goes left. E-consultants caught up in the fervor of last year’s demand cycle feign surprise at the quick downturn. “It was all so…sudden,” they say.

We’re shocked that they’re shocked. These are the digital architects, the folks who supposedly are guiding clients into brave new online worlds. But the e-consultants are also, by and large, ex-pats from larger consulting firms. What are they thinking!?

It’s easy to say the emperor has no clothes. But that’s mean. Perhaps a more apt characterization is that the nude frolicking of the past two years will give way to a more sobering e-consulting market.

Heard on the street
Lante’s partnership with Dell and Microsoft seems smart enough. The consulting firm will usher Dell clients into Dell’s online marketplace using the MS platform. In one stroke, Lante appears to solve the vexing problem of quickly migrating from toxic dot coms to Global 1000 clients. On the other hand, maybe Lante will just become Dell’s in-house consultancy. The announcement, which coincided with Xpedior’s cuts, didn’t impress investors. Lante stock dropped 17.5 percent. Apparently Net consulting firms seem to rise and fall together.
Inside Consulting is written by Tom Rodenhauser as a free weekly supplement to The Rodenhauser Report. The report informs senior advisors and business executives of consulting trends and best practices. Subscription cost is $295 per year for 10 issues. Copyright 2000, Consulting Information Services, LLC. Reproduction is prohibited. Quotation with attribution is encouraged.
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