The bigger they are, the harder they fall. The old saying is ringing true in the consulting world lately as firms once regarded as top in the industry have begun to downsize due to the cuts in IT spending and industry shakeups like the Enron downfall. The leaner times have created increased competition for consulting work.
Midsize firms have found at least one way to benefit from the demise of large firms and to get an edge on the competition: Recruit experienced consultants who are on the job market. That’s one strategy that David Joubran said his firm is using to gain leverage in a tight market. Joubran is the president and CEO of Acumen Solutions, a management and technology consulting firm that focuses on the communications and financial services industries and has about 170 employees.
In an interview with TechRepublic, Joubran talked about the two strategies his firm is employing to compete effectively for consulting work: hiring experienced consultants from larger firms and advertising his firm’s technological know-how and business savvy. These tactics match recommendations from the Information Technology Services Marketing Association (ITSMA), a firm that conducts market research and tracks trends in the consulting and technology industries.
Rob Leavitt, the director of member advocacy for the ITSMA, said that the tight restrictions on spending may give small- to medium-size firms with a specialty or vertical market niche an advantage.
“The big firms have become so expensive, and their overheads are so great that the buyers are really swallowing hard before signing some of those deals,” he said. “So as a smaller firm you can often go in and show just as much expertise for a much more reasonable price.”
Find the expertise to convince wary clients
Joubran said having more executives to please on the buyer side means consultants need premium skill sets that include experience with sales and building client relationships. For example, he said that within the communications industry, his firm has seen an increase in the number of meetings and presentations required for a client to make a decision.
“Now it’s a much more rigorous process as they need to justify every dollar spent and make sure that their return on investment models are as tight as possible,” Joubran said.
To find the consultants with the right combination of technical experience and sales savvy, Acumen Solutions has been actively recruiting consultants with 15 to 20 years of experience and the ability to manage senior-level relationships, Joubran said. Luckily for midsize firms like Joubran’s, consultants with that level of experience are on the move these days and willing to accept offers from smaller firms. Joubran said his firm has been primarily hiring from large system integration companies.
Competition from newly formed firms
Some of the consultants who have left large firms may prove to be competition for midsize firms, according to Leavitt. He said that many experienced consultants are choosing to set up virtual consultancies, in which individual practitioners set up a network and bring in deals with little overhead, instead of joining an established firm. One example of this is the Huron Consulting Group, which was established by 25 former Andersen partners in Chicago. The firm already has 75 clients and plans to expand internationally.
Advertise your firm’s expertise and experience
In addition to recruiting top talent, Joubran said his firm is going to make sure current and potential clients know about Acumen Solutions’ expertise and experience through speaking engagements and advertisements for Acumen’s achievements.
As an example, Joubran cited an announcement on Acumen’s Web site that the firm has been chosen as a finalist for 2002’s Billing World Excellence Award in the “Achievement in Innovation” category. The nomination is credited for assisting Nextel Communications Inc. replace its customer care and billing systems (CC&B). Acumen created a centralized reporting system, the Executive Dashboard, which collected and reported on critical data points surrounding the conversion to the new CC&B system.
Joubran said his firm, along with Nextel, spoke about the innovation at the Billing World 2002 Convention in June 2002 at the Baltimore Convention Center. He said opportunities like the convention that promote Acumen’s accomplishments can help make future sales or increase the likelihood of repeat business with current clients.
“There are a lot of technology companies out there, but when you come to the table with strong technical knowledge and then layer that on top with very strong industry expertise, that makes a much stronger pitch, it makes the sale a little easier, and it makes us more likely to be in that running,” Joubran said.
Promoting this expertise may help firms gain more business and convince clients they’re worth their consulting fees. A recently released ITSMA study shows that despite economic pressures, clients will choose professional services based on a firm’s capabilities rather than low cost. To stay in the running, firms should show potential clients implementations that provided measurable benefits with minimal risk, according to Julie Schwartz, ITSMA’s vice president of research and author of the report.
“There is tremendous opportunity for vendors that position themselves as savvy industry experts who follow through and do what they say they are going to do, customize their solutions, share their knowledge, and are responsive to client needs for flexibility and scalability,” she said.
How are you remaining competitive?
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