Note the Sourcing Innovation Editorial Disclaimers and note this is a very opinionated rant! Your mileage will vary! (And not about any firm in particular.)
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, in tech, finally be hit with the triple whammy of:
- a market unable to afford their (sometimes 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) - 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) - 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, at consultancies that have under-invested in tech, 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 average bench warmers fresh out of school who aren’t capable of doing anything original due to lack of real world experience and can only follow the playbook written years ago by the group leader and only updated sparingly as the handpicked recruits have time.
Why? Because the best consultancies, mid-market and Big X alike, will do something about it (and already are — either acquiring companies to get pools of talent, focusing more on training the talent they have, or forcing team leaders to do more mentorship of the junior staff to raise them up), and bring the same value to tech that they bring to other areas. (See when should you use Big X?)
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 and Mid-Sized 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#) and 500K+ for a superstar?
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 [but fortunately they don’t end up, or stay in, tech very long — it’s easy to weed these individuals better suited for other careers out fast]. (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 and Mid-Sized consultancies — in traditional (management/operational/finance/strategy) consulting domains, many of them are great — and way better than an average company In fact, he has a whole article on when should you use Big X?. But in tech, you’re often lucky if they’re average. (Some are way above average, having recently acquired specialist vendors and consultancies in tech, analytics, and/or AI that instantly gave them a pool of world leading experts, while others have more or less ignored modern areas of tech until the AI hype reached full steam and are playing catch up.) And when it comes to advanced tech, if you’re trying to find a true leader to take on your project, and you don’t know what you’re looking for, your odds are about equal to snake eyes when you roll the bones. (Your cost will be too high and your odds of generating a real return too low unless you first do your homework. You can’t throw an incomplete project request over the wall and hope for a good return from anyone! This means identifying your needs in detail, reviewing the proposals in detail, and vetting the talent that is proposed.)
* 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