Category Archives: Services

Let the Bloodbath Continue!

In a recent LinkedIn post, THE PROPHET tells us there is a Consulting Bloodbath starting, especially in the Big 5 (and their strategy firms). All the doctor can say to this is Good Riddance! and It would be even better if they battled it out Gladiator style! (After all, it’s been 28 years since American Gladiators ended, time for a rebrand and a relaunch with a little bit of MXC, which ended 17 years ago.) But we’re getting ahead of ourselves here …

Basically, according to THE PROPHET, firms are worried about the economy and growth headwinds ahead (this is also why investors have yanked money from equities and lessor-rated debt in recent weeks), and this includes tech/dev teams within consulting firms. In some cases lucky consultants are put on the bench and told they have six or nine months to find their next gig, and in others (and maybe the doctor is reading a bit between the lines here) they received their pink slips faster than they could say please Jack Robinson.

The bit about tech/dev teams makes the doctor happy because,

  • these are not tech firms, and they are selling modern analytics/automation/AI solutions they have no business selling (and no real capability to deliver at even an average level, as discussed in our recent post on why if if you want to get analytics and AI right? Don’t hire a F6ckW@d from a Big X!)
  • they are not structured for proper SaaS development and deployment and are NOT SaaS enterprises
  • most of the “talent” they are using are not “top” talent, and if if they are “top” of their class when they are hired, they still need mentorship and experience to become “top” talent, mentorship and experience they are NOT going to get at a Big X
  • the Big X cost structures are too high for mass market penetration; only the F500 / G3000 can afford them, but they still shouldn’t because overpaying doesn’t deliver the value they need in inflationary times where supply chains are breaking daily

And before you chastise me from apparently taking pleasure in people getting fired, think it through! If you do you will realize

  • the true “top” talent is going to end up at appropriate SaaS/Tech companies (or SaaS+IP powered niche automated services consultancies where their true talent/drive really is) where they can get the mentorship they need to grow and reach their full potential because
  • Big X being forced to pull out of (chasing) inappropriate custom SaaS/tech deals/engagements will open up the market back up for those companies that are well positioned, who can start growing and pick up this top talent
  • the “talent” that is not ready for the tech market will either go back to school or find their true calling (before going down a path where they will eventually get overwhelmed, be unhappy, or both; we can’t have the next generation burn-out in first world countries where a very significant portion of the aging population will not be of working age in the very near future)

Plus, shift happens! (How many of us have been restructured, rightsized, or outsized from a job by financiers and lawyers who think they can run a complex enterprise from a balance sheet or understand advanced technology and engineering when they can barely gas up the Jaguars and Mercedes they drive to work everyday?*) Furthermore, given that the average life expectancy at a job these days is 4 years, this talent might as well learn about, and get used to it, now when parts of the economy will be rebounding (and they have opportunity ahead of them), versus getting their @ss3s unceremoniously throw to the curb next time the market drops.

And if, for some reason, a Big 5 Consultancy (which did not start in tech but in accounting/tax, operations, strategy, etc.) is where they belong, then let them prove it in a battle royale! Forget about sitting on the bench waiting and hoping to get invited to a sales call where they can sell a project to work on, put them in the Arena! When a Fortune 500/Global 3000 needs a consultancy, force them to make their selection in the arena where the consultant leads will battle it out modern gladiator style! Not just a Dragon’s Den pitch, they have to battle it out to even get the opportunity to pitch — prove they’ll do whatever it takes to deliver value at the hourly rates their employer is charging!

Thoughts?

 

* If the apocalypse is nigh it is largely because these idiots forced the engineers who actually know how to build things out of the C-suite, allow Gen-AI to tell them how to do technical jobs, and then elect populist pinheads as Prime Ministers and Presidents to tell them it’s okay. And let’s not forget that, as per the OECD PISA data, most of them can’t even do high school math competently!

OneMarket Continues to Power Your Procurement with Its P2P (Procure-to-Pay) Solution

As per our last post on how OneMarket Sources Your Contracts with Insights in its new Integrated Source-to-Contract Portfolio, LogicSource was founded in 2009 by experienced professionals who wanted to improve sourcing and procurement in organizations that didn’t have the knowledge, experience, and infrastructure to execute in an efficient, effective, and transparent manner. Their view was that every consultancy can offer advice, but not every consultancy can help the customer implement that advice and get results.

In order to do this, they decided to build out an end-to-end suite to support their indirect/tail-spend clients with their particular service-oriented needs. As per our last post, they launched OneMarket for Source-to-Contract in 2020, which followed the Procure-to-Pay (P2P) solution that they have had since they acquired the Cirqit P2P solution in 2009. It was updated and rebranded as OneMarket P2P since OneMarket launched in 2012 and has undergone continual development and updates through 12 versions since 2009.

The UX has been updated and is maintained to be consistent with the rest of their platform and the solution is tightly integrated with their analytics solution and supports very detailed PO, Invoice, and Spend Analysis on all transactions that go through the platform.

Buyer Side Procurement

The platform was designed to be a simple shop, buy, pay experience that supported simple quotes (bid-and-buy RFQ) for standard / repeatedly purchased products (to negate the need for a full sourcing event), single and multi-supplier catalogs, and rate cards for standard services. It’s really easy for a user to generate a requisition using each of these capabilities, as well as selecting options against approved supplier purchase orders (POs), blanket POs, and, as just mentioned, rate card POs. They support approval chains of 0 or more suppliers (where orders to approved suppliers with negotiated pricing within budget can be setup as auto-approved where there exist approved supplier, blanket, or rate card POs) which can be configured on implementation and updated on an as-needed bases by administrators.

When a Purchase Order is approved, it goes out to the supplier who can reject it (if there is no contractual requirement), request a change order, or accept it and flip it to an invoice with as few as two clicks (if they intend to ship in full), or a few key field updates of unit fields (if they are fulfilling with a partial order). Once the invoice comes in, it goes into its own approval stream of 0 or more approvals (as rules can be configured so that exact-match invoices under a dollar amount are auto-approved), and when approved for payment, the ok-to-pay is pushed to the organization’s system. In addition, if the payment system is integrated, the platform will monitor for updates and update the invoice status when the invoice is paid.

Dashboard

The entry point to the buyer’s P2P application is the Dashboard that summarizes:

  • Requests awaiting their approvals
  • Their requests in process

LogicSource understands their target market are overworked, often don’t have Procurement as their primary role, and aren’t the most advanced on the Procurement ladder, and designed the entire application to be as simple and straightforward for the average buyer as possible, and make sure every screen takes them directly to what they want or need to do.

Menus

The buyer application has four primary options:

  • Create: which allows a user to create bid-and-buy projects, request estimates, create purchase orders (from existing approved supplier, blanket, or rate card POs), or enter a non-PO invoice that was received
  • Transactions: which allows a user to access their estimates, orders, invoices, reviews, and projects
  • Catalog: that allows the user to access their catalog(s) (which can be integrated or held separate), and which can be drilled into by organization (which limits the items that need to be searched and ensures the services and items that are found are those that have been approved)
  • Analytics: that takes the buyer to the analytics application

Catalogs

Catalogs are hosted and work exactly as you would expect, with standard search, filter, and one-click select, but the level of item detail is deeper than you expect, and the ability to manage internal inventory, supplier commitments, volume-based pricing, and order minimums or maximums goes well beyond a standard P2P catalog. (Punch-out catalogs are coming, but the plan is to support hybrid or internal hosting as much as possible as their application supports more information and capability than punch-out catalogs.)

Search is by item id or description, and can be quick-filtered by category, supplier, status, keyword(s), and organization (which provide cross-catalog subsets relative to the different buyers and departments in the company). When a user selects a catalog, all they have to do is specify an order quantity to add it to a requisition.

When it comes to catalog item details, which can be seen upon drill in and maintained by the organizational administrator(s) as needed, the catalog will specify the internal item code, version, description, category (and subcategory), target organization, location types supported, keywords, whether or not the supplier is preferred, supplier part id, manufacturer item number, brand, more detailed description, inventory Unit of Measure, Quantity per Unit of Measure (i.e. there might be 50 gloves in a box), organizational item status, activation date, deactivated date if inactive, standard order quantity suggestion, organizational product owner, inventory manager, primary buyer, barcode, and any additional comments. In addition, the cost allocation can be pre-specified in the catalog item so the buyer doesn’t have to deal with it (and select the wrong/default “other” category all the time, which, of course, screws up analytics). Finally, if there is volume pricing or order limitations from the supplier, these can be defined as well as any commitments the supplier has made to item availability at the price points. (Supplier commitments are important as ordering against these can automate requisition approval as pricing and availability have already been confirmed and accepted by the organization.)

When the buyer is done shopping, they can create the requisition which will either be automatically approved and converted into one purchase order per supplier (if there are existing approved supplier or blanket POs and budget is available), or sent off for approval (and the approver will be notified through email and can approve through the email or through the system, as they will also see the request for approval on their dashboard), and then, once approved by the appropriate individuals, there will be one purchase order created per supplier.

Each purchase order will have an auto-generated purchase order number as well as the corresponding order id, order name, requester, contact, and deliver by date automatically extracted from the requisition. It will contain the full item information for each item: id, description, UOM, (agreed upon) catalog price, quantity, line item total, subtotal, tax, order total, (default) shipping information, and any associated digital specification documents. All of this can be updated by the buyer (on an auto-approved PO) or the approver if necessary before the PO is sent to the supplier. Internally (i.e. not shared with the supplier), the Purchase Order will also maintain the cost allocation from the catalog for processing and any associated messages that have been sent between the buyer and supplier.

Bid-And-Buy / Requests for Estimate

A buyer can request a(n updated) quote on one or more existing catalog items or variations with new, detailed, specifications (especially if the catalog item is a placeholder for products that can have multiple configurations or services). Specifications can be extremely detailed and can be configured to go well beyond standard catalog specifications and can have subsections for each type of specification required. For example, for a mailer (for those who still do print campaigns), you can specify the high level project description (header), specific project details (component information), the paper attributes, the artwork details, the prepress details, each individual component (i.e. envelope, mailer, artwork, etc.) that can be drilled into, associated digital files, shipping information, estimate specifications (type:RFQ/Sealed Bid/Auction, due date, expiration date, commitments, etc.), capabilities required, and selected suppliers.

Once the suppliers have responded, the buyer can click into the estimate and see all of the bids by component by supplier with the lowest bid highlighted and preselected. The buyer can select the award as is, or change the award by component, and when the buyer is happy, select it and the requisitions and/or purchase orders (depending on what suppliers were selected, the total cost, existing purchase orders, and approval rules) are automatically created (and, if auto-approved, distributed).

Supplier Side Procurement

The platform is designed to be super easy for suppliers to respond to bid-and-buy requests and orders.

Dashboard

The entry point to the supplier’s P2P application is the Dashboard that summarizes:

  • Bid-and-Buy Estimate Requests awaiting their response
  • Orders
  • Recently Completed Estimates

If you think about how a supplier generally interacts with a buyer platform, it’s to provide quotes, fulfill orders, submit invoices, and request status. The dashboard captures most of this (as the supplier can flip an order to an invoice once they have fulfilled it), and it’s a single click into one of the three main main drop-downs to bring up the invoice (status) screen (although SI feels it would be really useful to have a quick summary of unapproved invoices so a supplier who can’t figure out a menu doesn’t call the buyer asking for a status they can look up themselves).

Menus

The supplier application menu has three primary options:

  • Dashboard: that we just discussed above
  • Create: where they can create change requests and invoices
  • Transactions: where they can access their requests, estimates, orders and invoices

Orders

When a supplier clicks into an order, they see all of the header, client, shipping and line-item information right up front. From here they can accept the order as is and flip it to an invoice, altering the unit quantities to those they can deliver now if they want to, message the buyer for more information, or make a change request, which will be returned as an associated change order if approved by the buyer.

Clicking the ‘Create Invoice’ button takes them to the invoice screen where they can provide more details or alter other information as required (or desired, but changing prices, terms, or delivery dates will prevent a PO match and could delay the buyer’s processing of the invoice). When they are ready, they either accept the PDF generated by the system (as an unalterable historical record) or upload their own (from their AP system), and then it’s one click to submit the invoice (both the application and PDF version) to the buyer.

Centralized Procurement

A lot of LogicSource‘s customers are operations with multiple locations, including brands that own retail chains. These customers need a solution that can help them keep track of spend across their locations, help their locations buy, but do so with corporate policies in place and supplier/distributor minimums in check. The OneMarket solution contains a simplified configuration just for location managers who only need to make orders and manage orders and invoices.

When a location manager logs in, they see a dashboard that summarizes their orders: incomplete, pending receipt – action required, and open; and a search bar where they can begin a search and start a new order. Search brings up all matching results, where they can select a preferred item, enter the quantity they want, and add it to the cart. They can continue until they have everything in the cart, and then go to the cart screen where it groups the items by supplier, shows subtotals by supplier, and indicates, with red highlight, if there are any sub-orders that don’t meet order minimums (or violate any other rules for the supplier). They can then increase the quantity, add more items, or delete all items from that supplier until the entire order meets business rules. When they are happy, it’s one click to check-out and the orders are distributed to the suppliers (as no approvals are needed since their catalogs are limited to pre-approved suppliers and products with commitments and approved prices).

Procurement Analytics

The analytics solution we discussed in our last article on how OneMarket Sources Your Contracts with Insights is also integrated with the P2P solution and, since the data that flows through OneMarket is automatically categorized and clean, OneMarket can pre-configure a lot of meaningful and detailed reports out of the box. These can include change orders, client operations, missed opportunity, order activity, order detail, supplier order, tracking list, inventory, and retail reports in addition to all of the reports described in our last article. Retail reports can include billing status, capital project analysis, commitment status, project costs, freight detail, historical shipment analysis, order history, pre-paid allocation, and tax reports, among others. The existence of detailed PO, invoice, and line-item data allows for very deep analysis on spend and P2P process time. Spend, supplier spend, supplier rating, invoice throughput, and supply chain analysis are preconfigured on all available data and the out-of-the-box cubes are detailed and deep.

LogicSource‘s OneMarket is a great P2P solution for organizations that do a lot of indirect Procurement and need a simple, service-supported, solution or a solution that can be rolled out to multiple locations with limited Procurement expertise and capability. It’s definitely worth checking out if you are that kind of (mid-market) organization.

The Public Sector is Giving Procurement Integrity A Bad Name … Can the Private Sector Fix It?

A recent article over on Global Government Forum on Procurement Integrity: A Big Problem That’s Worse Than Most Organizations Think, pointed out that errors, fraud and abuse in procurement cost governments and organizations millions of dollars every year, and even though recent headlines in the US (TriMark, Booz Allen Hamilton), UK (NHS, Royal Mail), and Canada (ArriveCan) are starting to shine the light on the extent of (public sector) procurement fraud, the problem is still bigger than you think. Much bigger.

Current estimates are that organizations, across the public and private sectors, lose 5% per year due to procurement errors, abuse, and fraud. Given that Global GDP is about 85 Trillion dollars, at 5%, that’s 4 TRILLION dollars estimated to be lost annually to errors, abuse, and fraud. And that’s probably a low-ball estimate due to the fact that we just calculated that Over One TRILLION dollars will be wasted on IT software and services due, primarily, to lack of knowledge and/or outright stupidity (and not malicious intent, but if it’s easy for consultancies and third parties to considerably over bill for legitimate goods and services that you need, imagine how much they are fleecing you for goods and services that you don’t need and may not even receive).

It’s highly likely that the true cost of errors, abuse, and fraud (internal, collusion, and external) is closer to 10% of total GDP, or close to EIGHT TRILLION. That’s at least twice the GDP of every country on the planet except China and the United States. That’s a BIG PROBLEM, which is definitely not being helped by the 100M to Multi Billion Procurement Frauds being reported almost monthly across major western economies — and multi-million dollar fines don’t repair the damage. (They don’t even come close.)

This is damage which Procurement needs to repair — because Procurement is the only department that has any hope of putting proper procedures, processes, and platforms in place to minimize the errors; training the organizational employees on proper procedures and monitoring the implementations to prevent abuse; and putting in place proper detection systems to detect, and prevent, potential fraud and quickly identify and track it when it happens.

Unless all the bucks go through, and stop at, a modern Procurement department run by a CPO who puts in place proper people, processes, and platforms, loss is going to continue to run rampant. Which means that while the public sector is failing us daily, the Private sector has to step up and restore the integrity of Procurement. It can start by utilizing some of the the techniques in the linked article, and continue by continually learning and implementing the best technology and processes it finds to not only uncover significant savings in inflationary times, but return integrity and trust into big business, and give governments who have lost their way a model to follow.

And for more details on Bad Buying to avoid, and how to achieve Procurement with Purpose, the doctor suggests you start by following the great public procurement defender, Peter Smith.

Commenting on The Prophet‘s 2024 Procurement / Supply Chain HR Advice

Don’t be Afraid of Going “In-House” If you Have Tech Expertise

In this recent LinkedIn article, The Prophet notes that, in the past, he’s always recommended a stint in consulting given the presentation and analytical skills it builds where consulting can also imply “outsourcing” or “managed services”. But for 2024 he think[s] the time is right to consider going “in-house” if you’re debating a career change in procurement or supply chain and you have technology skills.

the doctor fully agrees, with a mild caveat. Specifically, “in-house” must also be capable of being interpreted to include new-age niche service providers that, as The Prophet himself pointed out in his 9th Prediction that “SaaS Management Solutions Start to Eat Services Procurement Tech“, we’re going to see new categories of blended consulting/service providers that offer not only consulting but power engagements with in house (SaaS) tech that blends tech, data, and automation in new ways to provide enhanced service packages to clients based on service fees, data fees, platform fees, and consulting fees, depending on the engagement. These plays will need the above above average talent to bring it all together, and could prove to be the most fruitful jobs this talent can get both in terms of compensation (especially if they get a small piece of the company) and job satisfaction (solving problems in less time with more value than any Big X did before).

The Prophet also notes that many consulting orgs are still on hiring freezes or cutbacks and a bunch I know aren’t raising salaries this year and that if you are an expert “grinder” versus someone with deep commercial/sales or product knowledge, you might be better valued in a company in 2024. the doctor agrees.

Moreover, the doctor believes that this will be the year that Big X Consultancies will, hopefully, in tech, finally be hit with the triple whammy of:

  1. a market unable to afford their ridiculously high rates
    especially relative to the average service they provide (as the market has to accept what we’ve known since The Limits to Growth was published in 1972)
  2. an exacerbated brain drain
    as the companies who let talent slip in favour of DEI quotas recruit good talent back in house (which is easy when talent who went to consultancies sees their salaries freeze & their careers stall)
  3. a dose of reality as the smarter companies see what some of us analysts* have seen for years
    that when it comes to modern tech or industry leading service offerings, you have one group leader who is stellar (and worth whatever the firm charges), two or three handpicked recruits that are above average (and worth double or triple their market value because you can’t get that talent easy), and then thirty to forty below average bench warmers who aren’t capable of doing anything but following the playbook written years ago by the group leader and only updated sparingly as the handpicked recruits have time.

If you don’t believe the doctor when he says that the big consultancies are much shorter on the above average tech talent they claim to provide you, then ask yourself this:

How are Big X consultancies supposed to hire talent during tech booms when some tech companies will pay 250K+ for an intermediate developer (which is twice the average average salary in some well educated markets, and at least 2/3 more than the average salary#)?

When the VC and PE money flows, startups, which are cool and an opportunity to get rich if you ride the next unicorn, are more attractive than starting at the bottom rung of a consultancy. Thus, in these times, especially when the consultancies need bodies for all the implementation projects (because when the economy is pumped up by tech, a lot of companies buy tech), they hire what they can get — which is not the above average talent (of which there isn’t even enough for all the tech companies when you look at the paltry number of STEM graduates each year, the number of those who are actually qualified [which is less and less every year, not only do you have the double whammy of severe grade inflation and below par DEI-agenda admissions that The Prophet pointed out, but also overworked Professors who are forced to grade on a curve] and then calculate the number above average). Some of the “talent” graduating is so bad that you’re lucky if they understand the concept of a boundary condition when coding or calibrating when installing a piece of hardware. (Remember, the doctor used to be a Professor, keeps in contact with Professors, and the situation gets worse and worse each year. It’s all about maximizing dollars — from out-of-province/state students who’ll pay more, international students who’ll pay way more, and then hitting those quotes for massive DEI-based subsidies. It’s not about admitting, training, and turning out the best and the brightest. Only the rich and the rainbow.)

Now, the doctor should again point out that he’s not totally bashing the Big X — in traditional (management/operational/finance/strategy) consulting domains, many of them are great — and way better than an average company. But in tech, you’re lucky if they’re average. And when it comes to advanced tech, if you’re trying to find a true leader to take on your project, your odds are about equal to snake eyes when you roll the bones. (the doctor was serious when he said that if you want to get analytics and AI right, don’t hire a F6ckW@d from a Big X! Your cost will be too high and your odds of generating a real return too low.)

* even if many analysts can’t speak the truth because their firm’s success hinges on the success of the vendors who pay for their research, which in turn hinges on the success of the consulting partners they use for implementations …
# even though these same vendors will then wonder why they go bankrupt or have to do massive layoffs in two years

Roughly Half a Trillion Dollars Will Be Wasted on SaaS Spend This Year and up to One Trillion Dollars on IT Services. How Much Will You Waste?

Before we continue, yes, that is TRILLION, numerically represented as 1,000,000,000,000, repeated twice in the title and yes we mean US (as in United States of America) dollars!

Gartner projects that IT spend will surpass 5 Trillion this year. When you consider that 30% of IT spend is usually for software, and that one third (or more) of software spend is wasted (for unused licenses, which is why we have a whole category of IT and SaaS specialists that analyze your out-of-control SaaS and software spend and typically find 30% to 40% overspend in a few days), that means that roughly half a trillion dollars will be wasted on software this year.

Even worse, Gartner projects that spending on IT Services will reach 1.5 Trillion. And the waste here could be two thirds! Now, we all know that you need IT services to implement, integrate, and maintain those IT systems you buy. But how much do you need? And how much should you pay? Consider that an intermediate software developer should be making 150K a year (or 75/hour), that says that an intermediate implementation specialist shouldn’t be making any more than that, and not billed at more than 3 times that (or 225/hour). But how much are you being billed for relatively inexperienced implementation consultant, with maybe a few years of overall experience and maybe six months on the system that you are installing? the doctor knows that rates of $300 to $500 are not uncommon for these resources that are oversold and overcharged for.

But this isn’t the worst of it. As per our upcoming article Fraud And Waste Are Not The Same Thing, many implementation “partners” will try to get all they can get and make sure that when you go in for a penny, you go in for a pound and they will push for:

  • frequent change orders during implementation, usually billed at excessively high day rates as they have to “divert resources” or “work overtime”
  • unnecessary customizations or real-time integrations that are an extensive amount of work (and cost) when out-of-the-box or daily flat-file synchs are more than sufficient
  • extensive “process evaluation” or “process transformation” processes that are well beyond what you need to eat up consulting hours
  • extensive “best practice” education when your practices are good enough for now and/or those best practices are already encoded in the system you just bought and paid a pretty penny for and just following the default process gives you the same education

That will often double to triple the cost. But that’s not the worst of it. As per comments the doctor has made on LinkedIn, he regularly hears stories of niche providers losing 200K deals because customers said their quote was too low because all the Big X companies quoted over 1,000K for 100K worth of work. Literally. This is because, as the doctor has noted in previous posts and comments on LinkedIn:

  • they don’t have the talent in advanced tech (and even The Prophet has noted their lack of talent in areas of advanced tech in multiple LinkedIn posts, though he has been much more diplomatic than the doctor in discussing their lack thereof; but he did note in a 2024 advice post that consultancies are going to have a hard time attracting talent this year) — for every area, they’ll have a team leader who’s a superstar, two or three handpicked lieutenants who are above average, and then 20 to 40 benchwarmers who are junior and not worth the rate they are charging)
  • they have an incredible overhead — posh offices to house the partners making more than top lawyers who have a lifestyle to maintain
  • they don’t have the knowledge of, or experience in, modern tools — some of which are ten times more powerful than last generation tools; this, of course, means the Big X benchwarmers are using last generation tools which take ten times the manual labour to extract value from
  • etc.

There’s a reason the doctor said that if you want to get analytics and AI right, DON’T HIRE A F6CKW@D FROM A BIG X! and stands by it! Unless you want to pay 1K an hour, you’re not getting that one superstar resource trying to be the front end to two dozen projects that his three lieutenants are trying to manage, all of which are staffed by junior to intermediate individuals who can barely follow the three to five year old playbook.

There’s a reason that The Prophet predicted in his 9th prediction that SaaS Management Solutions [will] Start to Eat Services Procurement Tech and that many companies will go in house if they have tech expertise. Because he realizes that these consultancies will have a hard time not only hiring, but retaining, tech talent when they have hiring freezes, salary freezes, and reduced engagements as more and more companies can’t afford the ridiculous rates they’ve been charging recently. (Companies may not have had a choice during COVID where it was implement on-line collaboration and B2B tech or perish, but now they do.)

But there are still many companies who will, when they encounter a (perceived) tech need, immediately pick up the phone and call Accenture, CapGemini, Deloitte, McKinsey, etc. and bring them in to help them understand who to bring in for an engagement, instead of widening the net to niche providers who are 3 to 5 times cheaper, and who will deliver results at least as good, if not better.

Now, again, the doctor would like to stress that, despite how much he insists they are usually not the right solution for advanced tech implementation, that Big X are not all bad, and sometimes worth more than the high fees they charge. Most of these companies started off as management/operational/finance/strategy consultants and grew big because they were one of the best, and in certain domains, each of these companies still are. But being good at a few things doesn’t mean they are good at everything, and that’s very important to remember.

And while there will be exceptions to the rule (as every one of these companies has some tech geniuses), the reality is that when you need more bodies than there are talented bodies in an entire industry, you’re not going to get them and, because consultancies are not cool when you want to be a tech superstar (and join a startup that becomes a unicorn), the ratio of superstar to above average to average to below average talent in these organizations is much worse than in multinational tech companies (like Alphabet, Apple, Meta, Microsoft, etc.) where you know the majority of their employees are not the best of the best. (Because if they were the best of the best, there’s no way they’d lay off 10,000 employees at a time every time the market jitters.)

In short, manage that IT services spend carefully, or you’ll be double paying, triple paying, or worse and providing a big chunk of the roughly ONE TRILLION DOLLARS in IT services overspend that the doctor predicts will happen (again) this year. (Unless, of course, you agree with Doctor Evil who says, why make trillions when we could make … billions. Because that’s exactly what happens when you overpay for software and services. Don’t expect the Big X to say anything as they get the majority that overspend, and that’s how they stay so [insanely] profitable.)