The problem with consultants is similar to the problem with politicians - both are largely useless and extremely expensive, unless they are deployed properly and managed closely. Now to be fair, most consultants, unlike politicians, are quite knowledgeable and capable, but because they are pawns in a corporate political game, they are largely ineffective.

Ben Worthen of Wall Street Journal Blog on Technology quotes “big brains” from Deloitte Consulting:

The ailing economy has many businesses trying to cut costs. But most are going about it wrong. That’s according to the big brains at Deloitte Consulting. The company, which presumably would be happy to help your business go about doing it right, interviewed execs at 70 Fortune-500 companies, more than two-thirds of which have cost-cutting measures in place. But 64% of these companies are cutting costs through incremental steps like layoffs or shrinking travel and training budgets. These efforts only make a superficial difference and are harder to sustain, Omar Aguilar, a principal at Deloitte, tells the Business Technology Blog.

These are statements which are very hard to disagree with and even harder to make any use of. Let’s try to select the area from this quote - “travel and training budgets” and look at it from a fundamental economic perspective:

1. The usual knee-jerk reaction of management at the time of economic slow downs, is to cut down on these budgets incrementally and temporarily, and then relax limitations when acceleration returns. I wonder if anybody has measured the resulting financial effects of these temporary measures over all business performance?
2. Given that globalization activity will not likely stop, people do need to work with each other across geographies. Does management expect oil prices will collapse any time soon? Given the propensity of our politicians to look for someone to blame, rather than develop a sound energy strategy, I would seriously discount that possibility.
3. The travel cost, particularly airfare and food, has nowhere to go but up to reflect inflationary pressures of fuel and agricultural commodities. Demographics of the world spells out that these changes will stay with us for a while. Airlines are already cutting the number of flights and will raise their prices.
4. Considering the cost of travel, and lost productivity while traveling, the “tele presence” conferencing technology, even at a relatively high level of investment, starts to look quite attractive. Building cost/benefit analysis model for evaluation is very easy.

I have seen reports in WSJ Technology Blog and other publications, but cannot find the links now, about Cisco and Siemens offerings, which provide high quality meeting conferencing over VOIP at the range from $5K to $25K per location set-up. Cisco predicts that the technology will really take off by 2012, but I think it is quite conservative of an estimate, barring oil price collapse. There are people who complain that “tele presence” cannot replace the quality of cooperation that personal meetings provide. I would agree that hand written books are also much more “precious”, but we have learned to “suffer” with printed and even electronic media’s shortcomings.

Corporate consultants need to learn and re-engineer “best practices” from one of the oldest and still most successful industry - the industry of religion. If the tele-evangelical mega-churches figured out how to provide a human experience over the television, which is “warm” enough to collect billions of dollars, why do Global Corporations that are rearmed with “tele presence” and Web 2.0 collaboration software tools fail to learn how to be more productive?

Much has been written lately about traditional enterprise applications essentially being data entry “forms” and reporting structures, which are implemented to support desirable business processes and practices. It is surely a very complex set of structures, and it takes a very large number of professionals to design, maintain and upgrade these structures to ensure proper functionality, security, availability and performance for a very large number of customers. The most important reason for the rise of the Enterprise Application Software industry was economy of scale. Only 30 years ago all business applications were internally developed by a company’s IT organizations or contractors, with one exception of a General Ledger application available from McCormick & Dodge. The supply of qualified professionals was outstripped by the demand for software by a very wide margin.

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I found this in Jim Berkowitz’s e-Journal.

Here’s an article about a subject that’s near and dear to my heart, Businesses Still Failing To Use CRM Software To Its Full Potential:

DMC Software Solutions Marketing Manager Rebecca Haines notes:

The big problem with CRM systems is selecting the correct CRM software for company needs and getting the right amount of advice and training to ensure it reaches its potential. Resources are easily wasted without careful consideration and help, warns CRM specialist DMC Software Solutions.

What Jim kindly calls an article, I would call self promotional press release from DMC, completely fails to address is that many businesses start selecting software before they formulate clear justification and strategy for implementing CRM on the first place. Many “advisors” specialize in implementation of a specific software and consequently do not bother asking fundamental questions like “what business goals do you try to achieve by doing this?” and “how would you measure your success?”.

CRM holds a promise of breaking walls of departmental silos by refocusing peoples attention on a source of “natural” business flow of information - CUSTOMER. That requires some serious cultural change and for the change to take hold an organization, i.e. management has to plan and execute with clarity and consistency. Clarity and consistency are a lot more scarce than “functionally rich” CRM software.

It’s so much easier to suggest solutions when you don’t know too much about the problem.

  - Malcolm Forbes