CXO

Exec explains KPMG?s consulting life cycle

When running a huge consulting practice, it's wise to take it step by step. So says Ken Taormina, senior vice president at KPMG Consulting, who sat down for a recent interview with TechRepublic. Read on for more of his consulting advice.


Imagine yourself advising some of the world’s largest enterprises as an executive with one of the world’s largest consulting firms.

Ken Taormina, senior vice president at KPMG Consulting, takes it all step by step.

As head of KPMG’s industrial, automotive, and transportation practice areas, he’s responsible for all the client engagements—regardless of the type of solution—within those industry segments. KPMG views the client engagement as a life cycle, and that guides every member of the team.

I spoke with Taormina recently about the KPMG philosophy and the company’s approach to the consulting process.

Going vertical
Freedman: It sounds like KPMG is organized mainly around vertical markets but also around some specific technical practice areas like Oracle. Help me understand how KPMG is organized and where your focuses are.
Taormina:
I think [the way we’re organized is similar to] how clients approach the marketplace. We found, four or five years ago, that the best way to attack the marketplace from a business standpoint is not by a geographical approach—which a lot of consulting companies were doing at the time—but to break it down into things that would make you much more intimate and closely tied to your clients and their problems.
So we broke ourselves into industry segments: Communications and content, which is telecommunications and the entertainment industry; consumer industrial markets, which include industrial, automotive, and transportation; chemical and energy; and consumer and retail. There’s also public sector, which is broken down into Department of Defense; federal, state, and local government; and higher education and health-care providers. And then we have financial services, which is broken down into retail, wholesale banking, and insurance and service companies.
Everybody who works in each one of those verticals and in those segments comes out of that industry. We hire out of those industries; we would not hire all our people out of consulting companies. So, if we’re going after Oracle work in industrial, automotive, or transportation, we have people who are really more attuned to what you would be using Oracle for in those industries, vs. “generic” Oracle people.

Freedman: So [they’re] not just subject matter experts, but subject matter experts who also have some business context around that.
Taormina:
Exactly. And that [approach], quite frankly, lead to very explosive growth. It hit a nerve with our clients. That’s something they wanted, and it showed up consistently in our [customer] surveys. Our people liked it because they felt [their industry experience gave them]…real value when they went on the job. Also, it helped us have less people on an engagement to be successful, to keep our costs in line.

The KPMG consulting life cycle
Freedman: How does KPMG approach the engagement process with a client, starting from the sales cycle and rolling all the way through to the deliverables and the satisfied customer? Do you have a separate sales organization, or do you believe that consultants sell consulting, or is it a partnership?
Taormina:
It’s a type of a partnership. We have over 200 salespeople, broken out by vertical and by segment. For example, in my organization, I have a national sales team that supports me. Those salespeople work with my partners, my managing directors, and the technical solution groups that support me. It’s very much like a software company. We break our accounts into named accounts, key targets, and targets. A named account is a big company like Boeing or GE. We’ll have a dedicated partner on that team who will have a team around him [or her] and will manage all the engagements that come out of that client relationship. He or she will be responsible for delivering that work and for having long-term customer intimacy and becoming a trusted advisor for that client. The sales force helps to develop key targeted accounts in the named accounts, penetrating them, and when they become a named account, to farm the account with the partner and to build the relationship.
Our sales approach has been a big part of it because we’ve been able to cover more territory, find more opportunities, get them qualified, and have the salespeople then bring in the right managing director to make sure that we close the deal. We talk to clients about their problems and issues, we build value propositions—because that’s what’s selling today: not solutions but value propositions.

Proving value
Freedman: Expand on the “value proposition” selling concept.
Taormina: You can’t go in to client[s] today unless you can talk about how much money you’re going to save them, how much money you’re going to make them, and whether you’re willing to put skin in the game. They want to know you’re going to put fees at risk, that you’re willing to take some of your fees based on performance. They want to know if you’ve done it [before] and if you’re willing to stick with them through it. And they want to see numbers. They don’t want to see you analyze something.

Freedman: And they don’t want the fuzzy platitudes about increased customer satisfaction.
Taormina: We don’t even put soft benefits in presentations anymore. If it doesn’t have a number that’s achievable within 12 months as a return on investment, they’re not interested. If they need infrastructure, some of them are realizing some projects have to go over a year, but they’re going to break it into chunks so that they measure it and they don’t commit to multiple years.

What do you think?
Can you sell a solution to clients based solely on cost savings? Or are they looking for something more? Post a comment below or send us a note.

Targeting clients
Freedman: You mentioned that you’ve got three tiers of targets: named accounts, key targets, and general targets. What criteria do you apply to put somebody on your target list?
Taormina: For key targets, we look at the Global 2000 and the Fortune 1000 and we see how they match up with our lines of business and our expertise. Then we look at how big they are and their information spend. That’s a predictor—if it’s a company that believes in technology and systems, it’s worth taking a shot at. On the other hand, there are smaller companies that actually spend more than their size would dictate. There are a lot of electronics and high-tech companies that spend way more than [you would expect] just going by size. That’s one predictor—the other is where they are on their growth cycle.
Based on that, we ask, “Who are the market leaders?” Then you go through those and determine which should be targeted and whether you can get the named account. When [the company reaches] named account status, we then determine whether it’s a company that we’re going to do a consistent amount of revenue with year after year and in different solution areas because [it] believes we’re a trusted advisor. [It’s] going to spend a certain amount of money with other firms. It’s probably going to be competitive. Almost everything we do today is competitive, but we’re going to be able to compete for that client because [it] believes we bring value.

Freedman: You’re moving beyond the transactional scenario and toward more relationship-oriented engagements.
Taormina: A lot of companies today—and I think this is what really destroys a lot of the upstart companies—have no relationships. If you have relationships and you have good solutions and a good solid value proposition, you will have the opportunity to help that client and get add-on work with them, as long as you can execute.
The other problem is that too many consultants live in “vendorville.” They don’t understand that when you have a sales force, you have to keep them focused on calling at the right level in the account—and the same thing with partners. It’s very easy, no matter how good people are and no matter how good our relationships are, for people to gravitate toward working with people lower down in the organization, folks who don’t have enough freedom to make decisions.

Rick Freedman is the founder of Consulting Strategies Inc., a training firm that advises and mentors IT professional services firms in fundamental IT project management and consulting skills. He is author of The IT Consultant: A Commonsense Framework for Managing the Client Relationship, and two upcoming works: The e-Consultant and Building the IT Consulting Practice, both scheduled for publication later this year.


About Consultant Q&A
As a supplement to his Consultant Master Class column, Freedman periodically interviews a leading executive, practice manager, or consultant from the top IT professional service firms. According to Freedman, the practicing consultants out there every day, selling, planning, and delivering projects for clients are the real masters. By giving them a chance to share their concepts, techniques, and lessons learned, he hopes to build consensus among consultants on the industry’s best practices and methodologies. If you have a question for Rick, e-mail us.

 

About Rick Freedman

Rick Freedman is the author of three books on IT consulting, including "The IT Consultant." Rick is an independent consultant and trainer, working, through his company Consulting Strategies Inc., to help agile teams and organizations understand agile...

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