A new management model for a consulting firm

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This thesis is the result of my graduation as Master in IT Management and describes the development of an innovative management model for consulting services. This management model is influenced by Gary Hamel\'s "The future of Management" and Maister\'s "Managing a Professional Service Firm"

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A new management model for a consulting firm

  1. 1. Page 1 of 95What management model is best suitedto support Getronics Consulting in itsbusiness strategyAuthor: C.E. RadenborgCompany: Getronics ConsultingDate: September 16, 2010Version: 1.0.1
  2. 2. Page 2 of 95The ConsultantOf all the businesses, by far,Consultancy’s the most bizarre.For, to the penetrating eye,There is no apparent reason why,With no more assets than a pen,This group of personable menCan sell to a client more than twiceThe same ridiculous advice,Or find in such a rich profusionProblems to fit their own solution.(Ramsbottom (1981) cited in (De Jong & Van Eekelen, 1999)“[Consultants] ……have all the materials, methodology, and tools needed to carry out the activity at their disposal.They combine human and material resources with the application of a businessman’s way of looking at theclient’s problem.They are flexible in their ability to assimilate changes in the planning of projects.They have sufficient assets to cover delays in payments which may possibly occur.They are independent, maintain a high level of confidentiality, and are always at the client’s service.Furthermore, consultants are of above-average intelligence and are quick to learn, observe, reason, synthe-sise, and imagine.They understand other people and work well with them.They are good at communicating, persuading and motivating.They can control themselves.They have personal energy and self-initiative, ethics and integrity.They are mentally and physically fit for the strain they are put under in their daily work” (Soriano, 2001)
  3. 3. Page 3 of 95Management SummaryThis master thesis investigates a new management model for a consulting firm. Getronics Consulting is in themiddle of a strategic change, extending the service portfolio with ICT Consulting Services. To meet the strategy,Getronics Consulting must find a way to leverage the consulting capabilities of the current consultants and enablethe potential of the other employees, enabling the employees to follow and support the business strategy. Themain research question of this thesis is:What new management model does support Getronics Consulting in its business strategy?To meet the strategy change, Getronics Consulting needs to overcome the bottlenecks as identified in the inter-views and must perform well on a number of KPIs, also identified in interviews. These KPIs and bottlenecks can befound in paragraph 2.5. Main KPIs are success in the market for client and staff and profitability. Main bottlenecksis a short term focus and the lack of client and market knowledge.A ICT consulting firm is “A firm that provides services to business, public and other undertakings by an independentand qualified person or persons who assist, in an objective and independent manner, the client organization toidentify ICT problems, analyze such problems, recommend solutions to these problems and help when requested inthe implementation of solutions”.To manage a consulting firm we identified the output of the firm, as this is what should be the objective of themanagement model. Output are the results, divided in key results, customer results, people results and societyresults.Key results of a consulting firm are Financial, Human, Intellectual and Social Capital. Together they provide a sus-tainable position for a consulting firm. To earn these forms of capital, a consulting firm needs to deliver value to itsclients and be successful in the market for staff. Perceived value for the client depends on financial results, servicequality and the relationship with the consultant. It is important to notice that the success of a PSF depends on theability to balance long term and short term results.As input of the management model we found that consultants, representing the knowledge and skills they have,are the core asset of an ICT Consulting firm. In order to have success a consultant needs integrity, competence andcapabilities. To develop such staff, Human Resource Management plays a crucial role.Strategy is in its essence about how to be successful. We studied the elements of a strategy in 3 steps: the domainchoice, the market strategy and the organization of resources. Defining the strategy is a practice responsibility thatneeds to be secured at corporate level.The domain choice is about what is to be delivered to whom, where and how. In consulting services there are twotypes of projects, expertise and experience projects. Expertise projects require another organization and type ofstaff than experience projects.The market strategy depends on the type of business. In consulting services customer intimacy and product lead-ership are possible strategies. Consulting services require a certain level of customization, which is in contradictionwith operational excellence. The market strategy also determines the firm culture. Farming is a culture that
  4. 4. Page 4 of 95matches services that depend on high levels of client and market knowledge. Hunting as culture is suitable if theservices depend on a high level of functional knowledge.There is a trend for multidisciplinary practices, organized around client and market knowledge. However, alterna-tives also occur. (Nätti, Halinen, & Hanttu, 2006) find a role for key account management (KAM) systems in facili-tating this process. Both options do have advantages and disadvantages, which need to be acknowledged andmanaged.Last input for the management model is leadership. Leadership differs with the type of PSF. A Managed Profes-sional Business (MPB) is typically led by a corporate hierarchy, while a Professional Partnership (P2) is character-ized by partnerships. The role of the leaders also differs. Senior managers in MPB’s are mainly selling consultants,leaving education, training, recruitment and personal coaching to HR staff.The nature of professionals and the nature of the work require and attract people with a strong need for autono-my. The more a project is experience based, the more it should be managed and firms become less organic andmore mechanic.At the core of the consulting firm are the processes of the Value Creation Process. Service Delivery is important forthree reasons: revenue, recurring business with the customer and knowledge building. Service Delivery should bemanaged to be profitable, contribute to knowledge building and should be performed with the highest quality andservice quality. There is no uniform consulting process, because consulting is a project-based business, every clientand project includes new challenges and unique questions. The Service Delivery process involves steps to solve theproblem and steps to increase acceptation and adoption of the solution.Knowledge Management is about the improvement of the organization by sharing and distributing experiencesand insights. Knowledge Management is of greater importance than any other form of input, like capital, becauseskills and business processes determine the organizations competitiveness. Consulting is all about knowledgetransfer. Knowledge Management is only valuable for companies if it is embedded in and aligned with the compa-ny’s strategy. Main obstacle in organizational learning and innovation is the lack of management support. Consul-tancy firms must stimulate and encourage a culture in which the sharing of new ideas takes place with full supportof management. What is needed is a shift in mindset and culture towards a culture of sharing ideas. Research andDevelopment (R&D) is of key importance in future profitability. Innovation should not be treated as a distractionfor direct revenue-producing work. It is an activity that adds value for clients and is necessary to raise fees.Practice Development is about creating awareness for the quality and capabilities of the practice and professionalsand needs to be done to generate business. Existing clients are the easiest to target and should at least get 70% ofnon-billable hours. The best way to build a relation with the client is to exceed his expectations. Relationship isabout getting a deep understanding of wants and needs of the client. To improve the relationship active participa-tion of the client is needed in Service Delivery.Work Assignment is the single most important managerial task in the firm. It influences the direction of the firm,service quality, costs and the timeliness of delivery. It demands a balance between profitability, quality, short termand long term benefits, client interests and motivation and development of staff. It should be viewed as a con-nected set of decisions, determining the expansion of expertise from individuals to the firm as a whole.Strategic human resource management and the alignment between structure, culture and HRM, are importantfactors in explaining firm performance. HRM should engage in a business partnership role and provide strategicadvice to line managers among others senior managers. Although there are significant differences in HRM be-
  5. 5. Page 5 of 95tween P2 and MPB firms there is no single best approach to HRM. Managers should seek to maximize the coher-ence between different elements of their organization systems. They should grow and apply those HRM approach-es and policies that are consistent with the overall configuration of their organization, including the underlyingbeliefs, values and behavioral norms.Objective of HRM is a competitive advantage through the effective use of people. Elements in this definition arerecruitment, managing and rewarding performance and development of key competencies. Elements of HRM arePromotion, Compensation, Recruitment, Training & Development, Performance Evaluation and Work Assignment.Recruitment is the process to examine and adjust the current organization structure in terms of ratios of junior,middle-level and seniors as soon as the type of projects is determined.Where Knowledge Management is focused on the improvement of the organization, development of key compe-tencies, or training & development, is targeted on the improvement of the individual. Development of key compe-tencies is done through selection, compensation strategies and career systems. These factors influence both thekind of knowledge that is acquired and developed by individual employees and their willingness to share suchknowledge. Work Assignment should account for the zone of proximal development, ‘the next step’, the newknowledge a learner is ready for.Managing and rewarding performance is used as the means to achieve a proper alignment between employee andorganizational goals. Employees should be recognized and rewarded for contributing to this alignment. Great dealof the motivation of professionals is accomplished through the interpersonal interactions between the profession-al and the partner that leads him, the role of recruiting, the system and structure of the firm. Eight aspects for staffmotivation are a fair reward, recognition, challenging work which matches the talents, meaning, insight in targetsand results, autonomy and responsibility.Most of contemporary management is based on management models of the beginning of the last century. Thereare a number of management challenges that differ from last century’s management challenges: - the pace of change accelerates, industry leadership changes hand faster and faster; - deregulation is reducing the barriers to enter a market, long-standing oligopolies are fracturing; - the rise of “value-webs, competitive outcomes are increasingly the result of cooperation and negotiation; - digitization and the world where information and ideas “want to be free”; - internet shifts power from producer to consumer; - strategy lifecycles are shrinking due to plentiful capital, outsourcing and the Web; - minimizing communication costs and globalization open doors for low-cost competitors.These challenges call for new organizational and management capabilities. A management model based on tradi-tional management principles is typically focused on command & control and top-down management is not capa-ble of facing these challenges. Not only operations of Getronics Consulting needs to change due to the strategychange and needs to be managed differently, also the management model itself needs increased adaptability toface contemporary management challenges.In a group design session and afterward on a wiki, we have searched for ideas to overcome the management chal-lenges that contemporary companies are facing. To overcome these challenges a company must: - Design the process so that it continuously renews itself and uses as many viewpoints as possible to stimu- late variation - Use the wisdom of the crowd
  6. 6. Page 6 of 95 - Speed up the allocation of resources - Encourage dissenting voices - Provide higher goals and meaning - Attract creative talent.The developed management model provides management tools to manage the processes of the Value CreationProcess, the input and output and the management ideas to provide the aforementioned principles. The process isdepicted in Figure 0-1. The relations and management innovation ideas are summarized in Table 7-1 to Table 7-12in chapter 7. Figure 0-1 Management modelThis management model was constructed on the findings of a literature study, among which (Maister, 1993) and(Lapierre, 1997). To make the management model ready for contemporary management challenges as identifiedby (Hamel, 2007), we have enriched it with management tools and ideas that were brought up in a group designsession with stakeholders.The management model was validated by a number of stakeholders by comparing it to a list of KPIs and bottle-necks of Getronics Consulting. The conclusion of the validation process is that the management model supportsGetronics Consulting in its business strategy and that a number of bottlenecks must be solved through othermeans. Those bottlenecks are summarized in the follow up.Finally, this thesis makes a recommendation for a change in the organization structure by implementing marketpractices for each market and technology practices for innovation. The distinction should be made based on theprofile of the consultants. Consultants with an experience profile should join the market practices, where consult-ants with an expertise profile should join the innovation practices.
  7. 7. Page 7 of 95Table of ContentsManagement Summary ................................................................................................................................................ 3Table of Contents.......................................................................................................................................................... 7Acknowledgement ...................................................................................................................................................... 101 Introduction and research objectives ................................................................................................................ 11 1.1 Management model .................................................................................................................................. 12 1.2 Management Innovation ........................................................................................................................... 13 1.3 Research motive and objective ................................................................................................................. 14 1.4 Research scope and relevance .................................................................................................................. 15 1.5 Stakeholders .............................................................................................................................................. 16 1.6 Research methodology ............................................................................................................................. 16 1.6.1 Research questions ............................................................................................................................... 16 1.6.2 Research methods ................................................................................................................................ 172 Introducing Getronics Consulting ...................................................................................................................... 19 2.1 Strategy change ......................................................................................................................................... 19 2.2 Clients ........................................................................................................................................................ 20 2.2.1 Ambition ............................................................................................................................................... 20 2.2.2 KPIs........................................................................................................................................................ 21 2.2.3 Strength ................................................................................................................................................ 21 2.2.4 Weaknesses .......................................................................................................................................... 22 2.3 Staff ........................................................................................................................................................... 22 2.3.1 Ambition ............................................................................................................................................... 23 2.3.2 KPIs........................................................................................................................................................ 23 2.3.3 Strength ................................................................................................................................................ 23 2.3.4 Weaknesses .......................................................................................................................................... 23 2.4 Getronics Consulting organization ............................................................................................................ 24 2.4.1 Ambition ............................................................................................................................................... 25 2.4.2 KPIs........................................................................................................................................................ 25 2.4.3 Strength ................................................................................................................................................ 26 2.4.4 Weaknesses .......................................................................................................................................... 26 2.5 Conclusions ............................................................................................................................................... 273 What is an ICT Consulting firm? ......................................................................................................................... 30 3.1 What is an ICT Consulting firm? ................................................................................................................ 30 3.1.1 Defining “ICT Consulting Firm” ............................................................................................................. 30 3.1.2 Three types of consulting firms ............................................................................................................ 31
  8. 8. Page 8 of 95 3.2 Conclusions ............................................................................................................................................... 324 How to manage an ICT Consulting Firm? ........................................................................................................... 33 4.1 Output ....................................................................................................................................................... 34 4.1.1 Key results ............................................................................................................................................. 34 4.1.2 Customer results ................................................................................................................................... 36 4.1.3 People results ....................................................................................................................................... 36 4.1.4 Society results ....................................................................................................................................... 37 4.1.5 Conclusions ........................................................................................................................................... 37 4.2 Input .......................................................................................................................................................... 38 4.2.1 People ................................................................................................................................................... 38 4.2.2 Partnerships and Resources .................................................................................................................. 39 4.2.3 Strategy ................................................................................................................................................. 39 4.2.4 Leadership ............................................................................................................................................. 41 4.2.5 Conclusions ........................................................................................................................................... 43 4.3 Conclusions ............................................................................................................................................... 445 What are the processes that need to be managed? .......................................................................................... 46 5.1 Service Delivery (SD) ................................................................................................................................. 47 5.2 Knowledge Management (KM) ................................................................................................................. 48 5.3 Practice Development (PD) ....................................................................................................................... 49 5.4 Work Assignment (WA) ............................................................................................................................. 50 5.5 Human Resource Management (HRM) ..................................................................................................... 51 5.5.1 Recruitment .......................................................................................................................................... 52 5.5.2 Development of key competencies ...................................................................................................... 53 5.5.3 Managing and rewarding performance ................................................................................................ 53 5.6 Conclusions ............................................................................................................................................... 546 Facing contemporary challenges ....................................................................................................................... 58 6.1 The Future of Management ...................................................................................................................... 58 6.1.1 Contemporary challenges ..................................................................................................................... 59 6.1.2 Design principles ................................................................................................................................... 59 6.1.3 Design method ...................................................................................................................................... 60 6.2 Ideas for Management Innovation ............................................................................................................ 60 6.3 Conclusions ............................................................................................................................................... 637 Defining the management model ...................................................................................................................... 64 7.1 Domain choice ........................................................................................................................................... 64 7.2 Service Delivery ......................................................................................................................................... 65 7.3 Knowledge Management .......................................................................................................................... 68
  9. 9. Page 9 of 95 7.4 Practice Development ............................................................................................................................... 69 7.5 Work Assignment ...................................................................................................................................... 71 7.6 HRM........................................................................................................................................................... 73 7.7 Conclusions ............................................................................................................................................... 758 Validating the new management model ............................................................................................................ 76 8.1 Will it work? .............................................................................................................................................. 76 8.2 Validation .................................................................................................................................................. 77 8.3 Conclusions ............................................................................................................................................... 799 Conclusions, recommendations and reflection ................................................................................................. 80 9.1 Conclusions ............................................................................................................................................... 80 9.2 Recommendations .................................................................................................................................... 81 9.2.1 Organizational structure ....................................................................................................................... 81 9.2.2 Innovation ............................................................................................................................................. 83 9.2.3 Implementation .................................................................................................................................... 83 9.2.4 Follow up............................................................................................................................................... 84 9.3 Reflections ................................................................................................................................................. 85Bibliography ................................................................................................................................................................ 86Abbreviations .............................................................................................................................................................. 88Appendix 1 Table of stakeholders .............................................................................................................................. 89Appendix 2 Most important staff interview results .................................................................................................... 90Appendix 3 Most important client interview results .................................................................................................. 92Appendix 4 Management challenges (Hamel, 2007) .................................................................................................. 94Appendix 5 Design questions ...................................................................................................................................... 95Version Changes1.0.1 Figure 0-1, 7-7 and 9-1 corrected arrow between work assignment and km in bi- directional; paragraph 6.3 Main principle (…) is added;
  10. 10. Page 10 of 95AcknowledgementThis master thesis is the last part of my study Master of IT Management at Delft University of Technology. Thisthesis is the product of 4 months of hard labor and shorts nights and most of all the kind help of some clients andmany of my colleagues at Getronics Consulting. I was warned for the broadness of the subject but also met muchinterest and involvement. I am aware of the fact that I produced a lot of words and it was not always easy to readit all again. It is therefore with much gratitude that I thank all my colleagues for their support and kind help andadvice. First I would like to mention Arnold van Mameren, who as my sponsor, wrestled through my drafts multi-ple times and always made time to listen and give advice. It is my hope that the result is worth it. Very much ap-preciated is also the help of Dr. Ir. G.M. Wijers from the TU Delft, as my supervisor.Next I would like to thank the members of the MT I belong to, Coby Lens, Johan Barnhard, Arjan Vos and WalterMarkus for listening to me, forgiving me when I was a little absent-minded or even forgot something. Especially mymanager Jan Jaap van Leusden, thank you for the support and advice.Then there are many colleagues that were there during the interviews, the design session and validation, or just atthe coffee machine: Bob Maas, Bob van Gils, Bob Geurtsen, Igor van Harskamp, Tom van Sante, Frans van derReep, Jurjen Niezink, Marco Ebbers, Maikel van den Heuvel, Evert Offereins, Angela Woldman, Erik Sluijter, HansRozenberg, Marco van Gelder, Hans Vriends, Dustin Snijders, Helma Nieuwstad, Daan Linden, Paul Leenards, Gun-ther Schraven and Marceline Spaan.I had the privilege to interview three clients and discuss my ideas with them as well, Raimond Zonneveld from AJS,Cees Plug from INHOLLAND and Glenn Lutke Schipholt from the municipality of Den Haag.But the ones who suffered the most from my project are my wife Margreeth and our kids, Noah and Rebecca. Ipromise you: no more studies before 2011, okay?Clements RadenborgAugust 2010
  11. 11. Page 11 of 951 Introduction and research objectivesGetronics Consulting is in the middle of a strategic change, extending the service portfolio with ICT ConsultingServices. Getronics Consulting has a background in IT Management, with system administration, secondment andeducational services as main services. Currently consulting services are only a slight part of the service portfolio.This new strategy should get Getronics Consulting in another position with its clients: from service provider totrusted advisor. (Hildebrandt, 2007) has written about becoming a trusted advisor. He shows that to become atrusted advisor, one first needs to become trustworthy. Trust is not a measure of popularity, it is a measure of our professionalism-about working with others in a way that shows we trust them and that we conduct ourselves in a way that shows that we can be trusted. (Hildebrandt, 2007)In his article, (Hildebrandt, 2007) quotes (May, 2004), who states that, to become a trusted advisor, one needs toembrace the 3 Cs: - “consistency: honoring commitment, facing reality, revealing motives; - competence: Demonstrate confidence, avoiding over-promising, accurately self-assessing oneself; - caring: Exhibiting sincere concern for others.”Trust is difficult to develop, yet vital to ensuring successful client engagements over time (Graham, 2003), (Green,2006), (May, 2004). This requires different skills from employees and management and another mode of opera-tion. At present, a tension between the actual and desired mode of operation is noticeable in discussions withconsultants and middle management. Other complaints are the perceived incapability of sales managers to sell“expensive consultants” and “leveraged sales”. Development programs for middle management and sales, like“het nieuwe competence managen” (translation: The new way of managing competences) and “consultative sell-ing”, are started to improve management and sales skills. Professionals are trained in programs like “drive yourbusiness”.To achieve this trust relationship, a fundamental change in the way that services are delivered is needed. In thisthesis a new management model will be developed for the consultants within Getronics Consulting, to empowermanagement and consultants in executing the new strategy.To meet the strategy, Getronics Consulting must find a way to leverage the consulting capabilities of the currentconsultants and enable the potential of the other employees, enabling the employees to follow and support thebusiness strategy. As we will see in chapter 2, Getronics Consulting does not, or hardly vary in management ofconsultants, system administrators or technical specialists. This inability of management and management systemsconstrains the execution of the strategy. (Minzberg, 1979) argued that services firms, performing routine tasks, asare system administration and secondment, are best structured in a machine bureaucracy, while professional ser-vices like consulting services are best structured in an adhocracy, arguably with some elements of a professionalbureaucracy when the environment is less dynamic. According to (Minzberg, 1979), the machine bureaucracy isvery bureaucratic. Professional organizations rely on highly trained professionals who demand control of their ownwork. Therefore these professionals need to be managed differently.
  12. 12. Page 12 of 95 1.1 Management modelThe verb manage comes from the Italian maneggiare (to handle — especially tools), which in turn derives from theLatin manu agere (“to lead by hand”) (Oxford Englis Dictionary). Management is as old as human history. Scientificliterature on management and management theory is plentiful, with famous works as Sun Tzu’s “The art of War th th(6 century BC), Machiavelli’s “The Prince” (1513), Adam Smith’s “The wealth of nations” (1776). The 20 centuryproduced a series of management theories, among which the dominant ones of Frederick Winslow Taylor’s “Scien-tific Management”, Henri Fayol’s “Universalism”, Max Weber’s “Bureaucracy” and Mayo’s “Hawthorne experi-ment”. Peter Drücker introduced “Management by Objectives” (Drücker, 1954). Fundament for this theory is theidea that when employees have been involved in setting the goals and choosing the course of action to be fol-lowed, they are more likely to fulfill their responsibilities.As plentiful as management theories are the definitions of management. Mary Parker Follett (1868–1933), whowrote on the topic in the early twentieth century, defined management as "the art of getting things done throughpeople". Other definitions define management by describing the activities that need to be executed. (Fayol, 1916)describes 5 elements of management: - prevoyance (Forecast & Plan); - to organize; - to command; - to coordinate; - to control.In Professional Service Firms (PSFs) the product is a service, as we’ll see in chapter 3. These services are deliveredthrough staff, which is the main resource of the PSF. Analyzing (EFQM, 2009), we argue that people produce ser-vices through processes, which in turn provide the results for both PSF, client, society and staff. Management thenis the activity to ensure the delivery of services by people, according to the strategy, in order to achieve a certainresult. Definition: Management in a PSF is the activity to ensure the delivery of services by people, according to the strategy, in order to achieve a certain result.Numerous management models have been developed to support managers in executing these activities. Man-agement models have different perspectives and areas of application. (Mulders, 2007) distinguishes: Strategy,Marketing, Sales, Procurement, Planning, Production, Quality, Distribution, R&D, Maintenance, Finance, HumanTalent Management and Logistics. Other perspectives and areas of application might also exist. Definition: A management model is a (limited) representation of the management activities from a certain per- spective and with a certain area of application.(Mulders, 2007) describes 75 management models, among which EFQM, Ansoff’s Growth model, Porter’s Compe-tition strategy and Stanford’s Confrontation Matrix. Many organizations do have their own proprietary manage-
  13. 13. Page 13 of 95ment model, of which some become available in the public domain, like the 360° Feedback system of GeneralElectric.(Nieuwenhuis, 2009) states there are 6 aspects that need to be addressed in a management model: Strategy,Structure, Culture, People, Resources and Results. Omitting one aspect leads to confusion, chaos, resistance, anxi-ety, frustration or meaninglessness. Only if all 6 aspects are addressed in a management model, an organizationwill achieve growth and change.In this thesis we have searched for a management model for Getronics Consulting, with consulting services asperspective and area of application. This management model should address all 6 aspects as (Nieuwenhuis, 2009)identifies. 1.2 Management Innovation(Anthony, Johnson, Sinfield, & Altman, 2008; Tidd, Bessant, & Pavitt, 2005) and many others show that innovationcan have a significant contribution to a company’s success. (Tidd, Bessant, & Pavitt, 2005) define “Innovation” as“change” and distinguish 4 types of innovation: Product innovation, process innovation, position innovation andparadigm innovation. Paradigm innovation means a change in the mental model, for example the switch to low-budget airlines.(Hamel, 2007) distinguishes a fifth type of innovation: management innovation. Management innovation is definedas: “Anything that substantially alters the way in which the work of management is carried out, or significant- ly modifies customary organizational forms, and, by doing so, advances organizational goals.”Management innovation changes the way managers do their work in a way that enhances organizational perfor-mance. (Hamel, 2007) distinguishes three conditions for management innovation of which one or more need to bemet to yield a competitive advantage: - innovation based on a new management principle; - innovation is systemic; - innovation as part of an ongoing program.(Hamel, 2007) states that most of contemporary management is based on management models of the beginningof the last century. He identifies a number of management challenges that differ from last century’s managementchallenges: - the pace of change accelerates, industry leadership changes hand faster and faster; - deregulation is reducing the barriers to enter a market, long-standing oligopolies are fracturing; - the rise of “value-webs, competitive outcomes are increasingly the result of cooperation and negotiation; - digitization and the world where information and ideas “want to be free”; - internet shifts power from producer to consumer; - strategy lifecycles are shrinking due to plentiful capital, outsourcing and the Web; - minimizing communication costs and globalization open doors for low-cost competitors.These challenges call for new organizational and management capabilities. A management model based on tradi-tional management principles is typically focused on command & control and top-down management is not capa-
  14. 14. Page 14 of 95ble of facing these challenges (Hamel, 2007). Not only operations of Getronics Consulting needs to change due tothe strategy change and needs to be managed differently, also the management model itself needs increasedadaptability to face contemporary management challenges. “The goal is to build organizations that are capable of continual, trauma-free renewal.” (Hamel, 2007)(Hamel, 2007) argues that systemic or continuous innovation based on new management principles can help anorganization to face these management challenges. 1.3 Research motive and objectiveWe have seen that a consulting proposition requires a different management model than secondment. We havealso seen that the circumstances have radically changed since the development of traditional management theoryof Weber, Taylor, Fayol and Drücker. This is, according to (Hamel, 2007), reason to look for new managementmodels. The lack of a good management model for the consultants of Getronics Consulting and the rapidly chang-ing environment resulting in aforementioned business challenges are the motives for this research.The change in business strategy of Getronics Consulting to include consulting services and the accompanyingchanges in skills and capabilities of the employees appear to be both a challenge and an opportunity. By anticipat-ing on the contemporary challenges of modern businesses, a management model is created, providing flexibilityand sustainability for Getronics Consulting.As we will see in chapter 2, Getronics Consulting faces many bottlenecks in its transitions to an ICT Consulting firm.This research should result in a new management model for the consultants of Getronics Consulting, which ad-dresses the identified bottlenecks and supports the evolution to a high quality ICT Consulting firm.
  15. 15. Page 15 of 95 1.4 Research scope and relevanceConsulting firms are a particular type of professional Service Firms. In this thesis we have explored scientific litera-ture on the management models that are used in PSFs. What are crucial aspects of such a management model andwhich new insights and trends in business, society and management can be used to adjust the chosen manage-ment model?Getronics Consulting is part of a larger organization, Getronics. This thesis has focused on Getronics Consulting,leaving out the relation with the other business lines. In practice this is not possible, because most of the largerclients work with both Consulting and other business lines. Two central departments, Central Sales (CS) and Inte-grated Client Solutions (ICS), have coordinating roles in those client relationships. The relation of Getronics Con-sulting with CS, ICS and the other business lines is out of scope for this thesis, but must be considered in futureresearch.This research is relevant first and foremost for Getronics Consulting in supporting and executing the businessstrategy. Through this research Getronics Consulting seeks to realize the required change in business strategy.Secondly this research will contribute to science in the application of new management insights to a professionalICT service firm. “Research into consultancy is rare at the present time and the literature appears fragmented and discur- sive at best - most likely because consultancy is at present underconceptualized *…+ Consultancy thus re- mains largely wrapped in a mystery” (Lundberg, 1997).Since (Lundberg, 1997), some more research was done, but still there is no comprehensive management model forPSFs in general, and ICT consulting firms in particular.(Brock, Powell, & Hinings , 2007) state that: “Increasingly, advanced economies are centered around professional service industries both domestically and internationally (Aharoni, 1993, 1999; Greenwood, Hinings, & Cooper, 2006). Further, autonomy is in- creasingly recognized as a crucial structural component for contemporary organizations (Brock, 2003; Young & Tavares, 2004), and thus fundamental aspects of the professional firm are seen as alternatives to bureau- cratic, hierarchical corporate organizational models in order to release innovation, deal with uncertainty and better manage knowledge workers. Also, many organizations that are not PSFs per se, are utilizing more and more professional workers; so an understanding of the contemporary issues in organizing profes- sionals is important in a general sense.”This shows the relevance of this research for IT firms and even for IT departments of large enterprises, since ITorganizations in large enterprises do have the same issues as external IT service providers, regarding their serviceprovisioning to their internal clients.
  16. 16. Page 16 of 95 1.5 StakeholdersThis research considers three different groups of stakeholders that are of importance in achieving the requiredbusiness goals: the board of Getronics Consulting, the clients of Getronics Consulting and the employees ofGetronics Consulting. Stakeholders are:  Alexander van der Hooft: VP of Getronics Consulting;  Arnold van Mameren: director in the board, responsible for the practices;  The business unit directors of the competence centers;  The Practice Leads;  Consultants;  Current and new clients;These stakeholders will be consulted in identifying the bottlenecks, in defining the new management model, and invalidating the model. To obtain an objective opinion in the validation process, other stakeholders will be consultedin the validation process, than in the design process. In “Appendix 1 Table of stakeholders”, the different stake-holders are listed with their contribution. 1.6 Research methodologyTo answer the main research question of this thesis, we must first establish a clear view on Getronics Consulting,the current management model and bottlenecks in becoming an ICT Consulting firm. Next, we must identify whatan ICT Consulting firm is.A management model will be developed, based on the characteristics of ICT consulting firms, which can be used tomanage consultants in a way that the business strategy is supported. This management model will be customizedto stimulate and evoke innovation. This management model should be validated by experts.The objective of this thesis is to design a new management model for the consultants of Getronics Consulting tosupport the business strategy. The main research question of this thesis is formulated as: What new management model does support Getronics Consulting in its business strategy? 1.6.1 Research questionsThe previous paragraph describes steps that should be taken to address the main research question. These stepscan be captured in the next sub-questions:1) What are bottlenecks for Getronics Consulting that need to be solved to support the changed strategy from a client, employee and board perspective?2) What is an ICT Consulting firm?3) How to manage an ICT Consulting Firm? a) What are the output and input of the management model? b) What are the processes that need to be managed?
  17. 17. Page 17 of 954) How can management innovation help to face the contemporary management challenges? a) What are contemporary management challenges? b) How can the new management model be used to stimulate and evoke innovation?5) What management model can be used?6) Will this developed management model solve the bottlenecks Getronics Consulting is confronted with? 1.6.2 Research methodsTo address the research questions mentioned in paragraph 1.6.1, the following steps must be taken: - to get a clear picture of the business strategy and expectations of the board, clients and consultants, in- terviews will be held; - to get a clear picture of the bottlenecks in realizing the change in business strategy interviews of the board, clients and consultants will be held; - literature study should lead to a clear definition of an ICT consulting firm; - literature study should provide insight in the components of the needed management models: - activities and criteria that will enable the new management model to face contemporary challenges should be identified: o in his book (Hamel, 2007) challenges the reader to dream of new management models. In this thesis, we will use a design session to create a shared dream for innovative management of the consultants; - the results of the scientific literature study on management models, the analysis of the requirements of board, clients and consultants and the new management principles should result in the definition of a management model; - an expert panel of the stakeholders should validate the developed management model.For the interviews a number of questions will be formulated with a general character. Purpose of the interviews isto get a general understanding of the expectations and to gather bottlenecks as identified by the different stake-holders.Main source for the literature study were the books by (Maister, 1993) and (Dawson, 2005). (Maister, 1993) ap-pears to be one of the oldest sources on professional services and is cited in many of the articles that we will usefor this research. Keywords for my searches for the literature study were: - PSF; - consultancy; - management model; - consultant; - innovation + consultancy; - value + consulting; - lnowledge + consultancy.Of course the bibliography of the different articles and books is a valuable source for additional material, we haveused thankfully for additional sources.Figure 1-1 depicts the research approach:
  18. 18. Page 18 of 95Figure 1-1 Research approach
  19. 19. Page 19 of 952 Introducing Getronics ConsultingFirst step in developing a management model for Getronics Consulting is to get a clear view on the objectives ofthe management model. Getronics Consulting is in the middle of a strategy change as described in chapter 1.This strategy change involves both clients and staff of Getronics Consulting. To assess the current and future situa-tion of Getronics Consulting interviews with consultants and management of Getronics Consulting were held. The-se interviews, together with written material on intranet and internet site of Getronics, form the source for thisanalysis. Other sources are the interviews held with three clients of Getronics Consulting. ”Appendix 2 Most im-portant staff interview results” and “Appendix 3 Most important client interview results” summarize interviewresults and relate the interview questions to the following paragraphs.In the next paragraphs we will zoom in to the Getronics organization to answer research sub question 1: What are bottlenecks for Getronics Consulting that need to be solved to support the changed strategy from a client, employee and board perspective?To answer this question, we must first analyze the strategy change in paragraph 2.1. The next paragraphs give adescription of the expectations of this strategy change and the identified bottlenecks. These paragraphs investi-gate the implications of the strategy change for clients, Staff and Getronics Consulting. 2.1 Strategy change The only sustainable way to escape commoditization is to engage in what I called knowledge- based relationships, in which knowledge exchange is the foundation of the relationship… (Dawson, 2005)Getronics Consulting was launched as a label of Getronics in October 2008. Until then Getronics Consulting wascalled “Professional Services and Consulting”. KPN has acquired Getronics to integrate IT and telecom services forits clients. Getronics does this in a one-to-many delivery strategy, as does KPN. Figure 2-1 depicts the position ofGetronics Consulting within the Getronics organization.Getronics Consulting helps clients to perform better by optimizing ICT: They do that by implementing and support-ing innovative technology, using leading ICT standards. The three pillars of Getronics Consulting Mission statementare: - be quality market leader in applying innovative Information and Communication Technology; - be the opinion leader in leading IT Management standards; - be the most attractive employer for committed employees.In 2007 the board of Getronics Consulting executed a market analysis on the position of Getronics Consulting. Inthis research a distinction was made between commodity services, where price and availability of resources arethe main criteria, services in the middle segment, which is historically the major part of Getronics Consulting’sservices, and services with high added value for the client, the upper segment in ICT services. The results of thismarket analysis were input for the Business Plan 2008 and up (Getronics Consulting, 2009).
  20. 20. Page 20 of 95 Figure 2-1 position of Getronics Consulting within the enterprize (Getronics Consulting, 2009)Part of the analysis of the market research was that ICT services in the middle segment are increasingly out-sourced, to Getronics Workspace Management Services, or to competitors. As a result, Getronics Consulting in-creasingly delivers services to large sourcing companies, often competitors of Getronics, like EDS and T-Systems.This is strategically an undesirable situation. To prevent that Getronics Consulting is pushed down to the commodi-ty segment, the strategic decision was made to move up and deliver higher added value in the services to clients.The strategy of Getronics Consulting is to increase the share of ICT Consulting services in the service portfolio from20% to 70% (calculated in # of assignments). (Mameren, 2010)In the business plan 2010, Getronics Consulting’s ambition is expressed to play a leading role in strategic IT devel-opment as a trusted advisor for its clients (Getronics Consulting, 2009). Three programs have been initiated tosupport the strategy: Client engagement (paragraph 2.2), leveraged sales (paragraph 2.3) and form equals matter.(Getronics Consulting, 2009). 2.2 ClientsThis paragraph describes the impact of the strategy change on the clients of Getronics Consulting. Input for thisparagraph are the business plan (Getronics Consulting, 2009), staff interview question 9, 10, 15 and 18 (Appendix2 Most important staff interview results) and client interviews (Appendix 3 Most important client interview re-sults). The findings are summarized in paragraph 2.5. 2.2.1 AmbitionIt is the ambition of Getronics Consulting to earn 80% of its revenue with the top 25 companies with in each mar-ket segment (Public, Finance, Industries, Health and Education) (Getronics Consulting, 2009). Getronics deliverscustom advice and implementation services in the area of leading ICT standards and advanced technology.Getronics Consulting focuses on scarce expertise and service offerings in the beginning of the lifecycle (GetronicsConsulting, 2009). This requires customer intimacy as market strategy.(Mameren, 2010) describes the strategy as in Figure 2-2, consultants either need extensive market knowledge, orextensive functional knowledge. Getronics Consulting is positioned somewhere in the middle (the dark grey area),with a focus on functional knowledge (Core Excellence) and the ability to execute. It is part of the strategy to
  21. 21. Page 21 of 95move along the orange arrows, to increase understanding the client and trust, by building market/clientknowledge and through client engagement. Figure 2-2 Desired organizational development (Mameren, 2010) 2.2.2 KPIsThe most important Key Performance Indicator concerning clients, as identified by the interviewed managementand staff, is recognition by the market as the quality market leader in ICT. This is measured in customer satisfac-tion.Another KPI is the impact with clients. The rate of impact the services of Getronics Consulting have with clientsindicates the way clients value the level of expertise of Getronics Consulting. Indication for the impact with clientsis the type of projects.Next KPI as identified by the staff of Getronics Consulting is the level of the prime contact within the client organi-zation needs to increase. Currently this is the IT manager or team manager. Being a counterpart for CIO or IT Direc-tor is an indicator for success, according to staff and management.Clients identify client and market knowledge and a proactive attitude as Key Performance Indicators. They expect aConsulting firm to know what is going on in the market and in their company, to make the advice more valuableand the implementation of the advice more successful. Example given is the political playing field in local govern-ment. A proactive attitude is expected in the dialogues and in the services that are offered to the client. 2.2.3 StrengthTo achieve this, each member of the board has responsibility over the development of one client segment. This is aresult of the client engagement program (Mameren, 2010). Client engagement means focus on the client, buildinga sustainable relation on the right strategic level where we cooperate as trusted advisor with strategic decisionmakers. It means knowing the client, analyzing the strategic challenges of the client and being a counterpart on thesame level.
  22. 22. Page 22 of 95Clients recognize the broadness of the Getronics Portfolio as strength. This provides a one-stop-shop and distin-guishes Getronics and Getronics Consulting from many competitors. 2.2.4 WeaknessesWeaknesses of Getronics Consulting concerning clients are in the area of client engagement. Clients expectGetronics Consulting to be proactive, which is currently seldom the case. Example given is that Getronics Consult-ing does not tell the client what services are needed in the future. Regularly, Getronics Consulting waits for theclient to request for a service. Another weakness is the lack of interest in long term investments. One client saysthat Getronics and Getronics Consulting are not willing to invest in more uncertain opportunities.Both consultants and clients state that market or client knowledge is increasingly necessary for consulting services,but depending on the level of advice. Workspace ICT is very generic and less market dependent. However, for ICTarchitects and senior consultants, market knowledge is crucial. Besides market knowledge also organizationawareness is necessary. A consultant must be able to analyze a client organization and understand how ICT cansupport the processes of the client. Getronics Consulting will not give advice on business process redesign.One client tells that Getronics Consulting is not able of advising on particular business topics, in which niche con-sulting firms are specialized, but Getronics Consulting is more capable in covering the broadness of a client busi-ness and translating that into an ICT architecture. To gain more client knowledge, Getronics Consulting shouldchoose some focus areas and develop in that matter. 2.3 StaffIn this paragraph in impact of the strategy change on the staff of Getronics Consulting is studied. Input for thisparagraph are the business plan (Getronics Consulting, 2009) and interview question 1, 2, 3, 4, 7, 9, 10, 11, 12, 13,14, 17 (Appendix 2 Most important staff interview results). The findings are summarized in paragraph 2.5.Remarkable is that there is no clear definition of the terms “consulting” and “consultant” within the organization.In interviews two types of consultants were distinguished: in a small definition, a consultant is someone advisingthe client on a specific topic, after analyzing the situation. The benefit of the client organization is more importantthan the benefit of the principal. In a broader definition, everyone from outside the company, delivering a resultfor the client, is a consultant.In the family job system, the term consultant is connected to the job family “technology consulting”, starting withTechnology Consultant 1 on function level 10 and going up to Principal Consultant on level 14. In comparison, asenior business unit manager is also level 14 and the business line board is level 16 to 18. Besides the family jobsystems, all staff has a “function profile”. This function profile is: ADV (advice), PM (project management), MT(Management), BOE (Management, maintenance and exploitation) and OOB (Design, development and realiza-tion). Among PM and MT profiles there are also employees that fit the description for consultantOf the 1150 direct billable employees, approximately 200-250 are qualified as consultant. Others are young pro-fessionals or (technical) specialists, system administrators, project managers or process managers.
  23. 23. Page 23 of 95Leveraging is one of the programs in the transition to consulting: this involves teaming young professionals andmore senior consultants in client projects. Knowledge building for the young professionals is accelerated and thesenior consultant can divide his or her scarce time on multiple client projects. (Getronics Consulting, 2009) 2.3.1 AmbitionGetronics Consulting considers being an appealing employer for committed employees as vital to the strategy(Getronics Consulting, 2009). This is necessary to attract and preserve the best consultants in the market and isemphasized in the Mission Statement. 2.3.2 KPIsRecognition by consultants as the quality market leader in ICT is the most important Key Performance Indicators asidentified by the interviewed management and staff. This is measured in and the number and quality of applica-tions for consulting jobs.A consultant should, according to the interviewees, be an expert in his functional domain but also have soft skills.The most important soft skills are: professionalism (do what you promise and manage expectations), listening,convincing, analyzing through understanding, commercial skills (determine the value of an advice and know whento charge).To be successful in the staff market team spirit and collaboration, career perspective, great projects and pride areimportant KPIs according to the interviewees. 2.3.3 StrengthGetronics Consulting has a number of activities in place to accelerate the career of is employees. Accelerationtracks provide a possibility for the most eager young professionals to gain knowledge and experience in a relativelyshort period combined with coaching from an experienced consultant. Leverage is increasingly used as vessel forcareer development. 2.3.4 WeaknessesGetronics Consulting does not succeed in demonstrating a sense of choice and meaningfulness. Consultants expe-rience little involvement in the logistic process and have little influence in the tasks they are assigned to, especiallyunder tough market circumstances. Bottlenecks identified in the interviews concern Directions, Delivery and Com-pensation.DirectionsIn interviews it appeared that there is no clear view on the role of consultant. Getronics Consulting should decideon a definition and communicate this. Potential consultants are uncertain of their task and responsibility. Issuesare discussions on tariffs, client engagement activities and entrepreneurship. Furthermore, no precise data isavailable on the exact character of assignments. Therefore, no analysis can be made on the percentage of consult-ing assignments and trends.
  24. 24. Page 24 of 95DeliveryThere is little influence of (most junior) consultants in the assignment to tasks. As a result, the work assignmentprocess is very mechanical. Main driver is availability and reduction of unproductivity. Young professionals aremanaged for billable hours. Leveraged sales often involves part-time occupation. As a result, business units are notkeen on selling leveraged deals because the P&L is within the market unit. So when a consultant needs a juniorconsultant to perform a certain task, both the junior consultant could profit in an increase of knowledge, the sen-ior consultant could benefits in sparing his valuable time for the most beneficial activities, but the business unitmight still prevent the deal for a loss of revenue due to non-billable hours. Last bottleneck is the lack of a compul-sory approach in assignments. This leads to inefficiencies in delivery and a loss of profitability.CompensationWith regard to compensation there are two bottlenecks. There is no good financial system to measure and assigngenerated revenue to consultants. As a result it is more beneficial for a consultant to fill his own “order book” withan average-paid job over a longer period of time than in finding more rewarding shorter jobs and using junior con-sultants to execute lower-valued tasks.The second bottleneck involves the incentive arrangement, which does not stimulate for knowledge sharing, inno-vation and leveraging. The focus is on revenue and the Q-bonus is too uncertain to count on. As a result,knowledge sharing is only rewarding after the targets are met. 2.4 Getronics Consulting organizationIn this paragraph we will look at the implications of the strategy change for the Getronics Consulting organization.Input for this paragraph are PIM, the resource allocation management system of Getronics Consulting, interviewquestion 5, 6, 8, 9, 10, 15, 16, 17, 18, 19 and 20. (Appendix 2 Most important staff interview results) and the clientinterviews (Appendix 3 Most important client interview results). The findings are summarized in paragraph 2.5.Getronics Consulting is organized in five market-oriented business units: three business units with a market focus(Public Markets, Financial Markets and Industrial markets) and two business units with a regional character (North-East and South-West) and four competence centers with an expertise focus (Consulting, Educational Services,Innovative Technology and Management Services). The market-oriented units have their own sales force, accountmanagers. The competence centers do not have account manager. Employees of the competence centers arealways assigned to assignments through market-oriented business units.In the last two years Getronics Consulting made a start with the use of practices as a structure to support and ena-ble the business strategy. Consulting practices are inspired on the medieval guilds, providing master – apprenticerelations to build competences and skills. The approach towards practices differed between competence centersand the results are diverse as well. In the interviews the practices were discussed.Practices within the Business Unit Innovative Technology (BUIT) were: Portals & Collaboration, Web Services, Vir-tualization, Networking, Storage, Architecture, System Center, with one domain of the IT Infrastructure as focus.The practices within BUIT have focused on knowledge sharing and building a community. Knowledge sessions weresuccessful in number of visitors and evaluation. In 2010, the practices were merged into three pillars, the practiceWeb Services & Consulting, the practice Infrastructure Optimization and the practice Workspace Optimization.Focus within practices currently is more on vision building, integration of technology and development of serviceofferings.
  25. 25. Page 25 of 95Within the Business Unit Consulting (BUCO) three practices were started: Service Strategy & Transition, Govern-ance & Compliance and Architecture. These practices focused on proposition development and leveraged sales.Practices can involve both consultants from the competence centers and junior consultants from market focusedbusiness units. Leveraged sales appeared to be hard to achieve, for the current management model focuses verystrict on productivity, especially in though market circumstances, preventing junior consultants being assigned topart-time assignments. This is enforced by the fact that most junior consultants are members of the market units,who have their own P&L. In 2010 the practices within BUCO were merged into one practice. Practice meetings aresuccessful in knowledge sharing, both functional as market knowledge and proposition development.The market analysis (Getronics Consulting, 2009) has convinced the board of Getronics Consulting that a change inorganization of senior consultants is necessary (Mameren, 2010): most consulting firms organize their practices tomarkets to increase the client knowledge of the consultants. Therefore, the plafond of function level 11 no longerexists for the market-oriented business units, enabling them to acquire more senior employees and consultantswith specific market knowledge. This should enable the market units to attract and train senior consultants, in-creasing the market and client knowledge with senior consultants.Interviewees differ in their opinion on the future of the practices. Some expect that in the future, the practices willbe communities for the technical skills, while senior consultants need more market knowledge and therefore aretransferred to the market units. This is also the opinion of (Mameren, 2010). Other interviewees note that mostsenior consultants have market knowledge on multiple markets. Besides, market knowledge is not always neces-sary, in workspace services less market knowledge is needed than in architecture. 2.4.1 AmbitionGetronics Consulting actually has four different business propositions: - secondment: Getronics Consulting employees that are seconded to a client to work as system administra- tor, team manager, process manager etc. under direction of the client. The client is billed on a time- ma- terial basis; - projects: A team of Getronics Consulting employees are assigned to a project for a client. The assignment can be on a fixed-price basis or time-material basis; - educational Services: Getronics Consulting sells educational services to clients; - consulting: One or more employees of Getronics Consulting are contracted by a client to deliver advice, assist management in achieving their objectives. The assignment can be on a fixed-price basis or time- material basis.Currently, on average 10-15 % of the assignments is registered as an “ADV” job (advice), indicating there is a con-sulting component in it. When PM and MT assignments are included, this percentage increases, but currently nodata is available to identify the exact character of an assignment. The desired percentage of consulting assign-ments according to (Mameren, 2010) is 70%. 2.4.2 KPIsIn the interviews with staff and management profitability is identified as most important KPIs for the success of acompany. To increase profitability, leveraged sales and hourly rates are seen as important drives and thereforeKPIs. Next KPI is the percentage of consulting assignments. Third KPI is market/ client knowledge for senior con-sultants and directors. Last KPI is the intensity of contact senior consultants have with the client.
  26. 26. Page 26 of 95 2.4.3 StrengthTwo main Unique Selling Points (USPs) of Getronics Consulting are the fact that the service portfolio stretches fromICT consulting to implementation and system administration services and the “human factor”. The unique com-bined proposition of IT and connectivity (ICT) is considered the most important distinction of Getronics Consulting,as the world is rapidly changing and collaboration between individuals, networks and organizations is becomingever more important. This observation is in line with observations of (Hamel, 2007), (Reep F. v., 2009), (Sheehan,2005) and (Ambos & Schlegelmilch, 2009).The “human factor” is recognized both in the skills of the staff of Getronics Consulting and in the vision on ICT: ICTis supportive to the people, and can only be successful if the people know how to use it. Training and processes areimportant aspects of the delivered services. 2.4.4 WeaknessesIn the interviews with the staff, multiple bottlenecks were identified:GovernanceIn interviews with clients, a common remark was that Getronics/KPN fails to align the different business lines in itsinteraction with clients. It occurs that different business lines are not aware of each other’s activities or evenworse, are competitors for the same client. Clients expect Getronics Consulting to coordinate activities of differentbusiness lines with the client. It should be noted that these clients are relatively small and do not have a contactwith Centrals Sales (CS), where this coordination takes place for larger clients. Another issue is that ICS has rela-tionships and arrangements with vendors that sometimes compromise the independence of Getronics Consulting.Advising one solution could be in conflict with corporate agreements.In practice it is hard for Getronics Consulting to maintain an autonomous position, where it involves services ofGetronics. Two clients mention that Getronics Consulting is asked to audit services of Getronics and gives an inde-pendent, sometimes negative feedback on the services of other business lines. This leads to internal tensions andarguments within Getronics Consulting.Getronics has positioned itself as a partner with one of the interviewed clients, but in practice this is not the case,as the focus for Operational Excellence is pushing Getronics into a cost-saving modus, which is contrary to theinvestments and shared risk taking of partners.In interviews with staff and management we found that within Getronics Consulting, the organizational structure isexperienced as inefficient in gaining client and market knowledge. The senior consultants are situated in the com-petence centers and are less focused on a client or client segment. Neither is there a good knowledge sharingculture or system to share and develop client and market knowledge.Notwithstanding the four business propositions, there is only a slight differentiation in management model for theinvolved employees within Getronics Consulting. Consultants are mainly concentrated in practices within the com-petence centers and there is an incentive for consultants for revenue and quality, the “OK regeling”. Consultantshave a target, based on their age, function and salary. Of all revenue exceeding the target 40% is paid to the con-sultant as incentive. Furthermore, there is a quality bonus, with a maximum of € 5000 if the business unit meetsthe Return on Sales (RoS) target within 3%. This Q-bonus is a compensation for lost revenue for activities that addvalue to the business unit, like lectures, publications etc.
  27. 27. Page 27 of 95A change in the rewarding system is needed to stimulate a long term focus in consulting services, where second-ment is much more short term focused. Main objective for consultants is still billability. For example, BUIT hasnever paid the Q-bonus, because the RoS target was never met. Interviewees identify the lack of differentiation inmanagement as a bottleneck in executing the strategy. The reward system should reward long term activities likeknowledge building, publishing, presenting to clients and presales.Another bottleneck is the separation of sales and delivery. There is a tension between those, for example whenshort term success hinders knowledge building and long term profitability. In consulting services, sales (acquisi-tion) should be part of the consultant’s activities.Next bottleneck mentioned is the lack of project management expertise and risk management. Consulting servicesoften include fixed price offerings. Getronics Consulting has a history of unsuccessful fixed price projects.AqcuisitionTwo bottlenecks as identified by interviewees concern the incapability of sales to “sell services instead of hours”and to “sell leveraged deals”. One reason for this could be the fact that service requests are received only after theconsulting part is done. This is in line with the observation of clients that Getronics Consulting is not proactive in itsinteraction with clients. Consultants do not have the network to acquire new assignments. To improve this, con-sultants should have more intensive contact with clients, also after a project is ended. This would also address thelast bottleneck that service requests are received too late (after consulting part is done).Clients state that they don’t mind a leveraged delivery of a service, as long as the senior consultant remains re-sponsible. 2.5 ConclusionsIn this chapter Getronics Consulting was introduced to answer research question 1; “What are bottlenecks forGetronics Consulting that need to be solved to support the changed strategy from a client, employee and boardperspective?”To answer this question, we interviewed management, staff and clients of Getronics Consulting. Furthermore, ananalysis of the business plan 2010 was made. The management model that should be the result of this researchmust address the KPIs and bottlenecks as appeared in the previous paragraphs.The results of the different interviews are very consistent where it concerns the weaknesses and KPIs. Both man-agement, staff and clients recognize the lack of market and client knowledge, although there are differences inopinion on the required level that is necessary. Another result of the interviews is that both clients as staff andmanagement would like to be involved in an earlier stage. Important bottleneck is the lack of steering on long termresults. Here the difference between secondment and is felt.Another issue that needs to be clarified is the relation between Getronics and Getronics Consulting. The differencein strategy and the relation of Getronics with its vendors sometimes compromises the independence of GetronicsConsulting.Both clients, staff and management are optimistic about the ambition and the position of Getronics Consulting isgood, but these bottlenecks need to be addressed in the management model.The following tables summarize the findings of paragraph 2.2 to 2.3:
  28. 28. Page 28 of 95 Clients (paragraph 2.2) Strategy KPIs Strengths Weaknesses Customer 80% of revenue with top 25 clients Client engagement Client Engagement: More proactivity is ex- intimacy, of chosen markets. within board and pected in identifying client issues and opportu- farming market units nities Being recognized by the market as Broadness of Port- Client Engagement: Getronics and Getronics the quality market leader in ICT folio Consulting are not eager to invest in long term consulting. This is measured in opportunities customer satisfaction. Impact with clients. Measured in Client Engagement: No good market and cli- the type of projects ent knowledge The level of the prime contact Client Engagement: Lack of focus on specific within the client organization. areas for client and market knowledge Client and market knowledge in particular areas and focus on those areas Proactive attitude both in offering services and in investing in oppor- tunities Table 2-1 Interview findings concerning clients Staff (paragraph 2.3)Strategy KPIs Strengths WeaknessesAttractive Being recognized by consultants as Acceleration Directions: Unclear definition of consultant: just de-employership the quality market leader in ICT tracks cide and communicate! consulting. This is measured in the number and quality of applications for consulting jobs. Softskills Coaching of Directions: No data is available on the exact character juniors of assignments. Market and client knowledge Leverage is Delivery: Little influence of (most junior) consultants vessel for accel- in the assignment to tasks Team spirit and collaboration erated career Delivery: Young professionals are managed for billable development hours. Leveraged sales often involves part-time occu- pation; Career perspectives Delivery: P&L is within the market unit, constraining leveraging; Great projects Delivery: There is no compulsory approach in assign- ments; Pride! Delivery: The gap between the consultants and the employees who are no consultant is very big. Compensation: No good financial system to measure and assign generated revenue to consultants. Compensation: The incentive arrangement does not stimulate for knowledge sharing, innovation and lev- eraging. Table 2-2 Interview findings concerning Staff
  29. 29. Page 29 of 95 Getronics Consulting (paragraph 2.4)Strategy KPIs Strengths Weaknesses4 different Profitability Broadness of Governance: No coordination between differentbusiness propo- portfolio business linessitionsBroad portfolio Leveraged deals Combination of Governance: Compromised independency throughfrom advice to IT and Telecom connection with different business linesimplementation Hourly rates The human Governance: Tension between Operational Excellence factor and Customer Intimacy % of consulting assignments Governance: Separate the four different business propositions. They need to be governed differently; Market/ client knowledge for Governance: Focus on short term billability, prevent- senior consultants and direc- ing investments; tors More intensive contact of Governance: The consultants incentive is not stimulat- consultants with the client ing long term investments in knowledge sharing and coaching; Governance: The separation of sales and delivery, who is in charge? Governance: Project management and Risk manage- ment are insufficient; Acquisition: Sales is not fully capable of “selling the consultant”; Acquisition: Account managers do have trouble “sell- ing” a leveraged deal; Acquisition: Consultants do not have the network to acquire new assignments; Acquisition: Service requests are received too late (after consulting part is done). Organizational structure: Organizational structure constrains the development of extensive market knowledge with senior consultants Table 2-3 Interview findings concerning Getronics Consulting The results of this chapter will be input for the validation as described in chapter 8. In the next chapter we will further investigate the ambition of Getronics Consulting from a theoretical perspective to answer research ques- tion 2: What is an ICT Consulting Firm?
  30. 30. Page 30 of 953 What is an ICT Consulting firm?In the previous chapters we have seen that Getronics Consulting is in the process of a strategy change, to ex-tend the service portfolio with consulting services, thus becoming an ICT Consulting Firm. In this chapter subquestion 2 will be answered: What is an ICT consulting firm? 3.1 What is an ICT Consulting firm?First, the term “ICT Consulting firm” will be defined from a linguistic perspective. Then, scientific literature willbe examined for definitions on consulting. Next we will research the characteristics of ICT consulting firms. 3.1.1 Defining “ICT Consulting Firm”An ICT or IT firm provides services in Information and Communication Technology, which is, according to Cam-bridge Advanced Learner’s Dictionary, the science and activity of using computers and other electronic equip-ment to store and send information. It may not come as a surprise that it can be concluded that an ICT Consult-ing firm is a firm that advises clients on ICT matters, in order to make money.In scientific literature, consulting, or consultancy is often combined with an adjective like business consulting,management consulting or strategy consulting. The Institute of Management Consultants provides the follow-ing list of areas which can be the subject of consultancy work, currently in use: corporate policy and corporatedevelopment, financial management, administration, marketing and selling, production, distribution andtransport, information technology, economic planning, human resource management, management sciencesand technology management. (Institute of Management Consultants, n.d.)The Institute of Management Consultants as cited by (McLarty & Robinson, 1998) defines Management Con-sulting as follows: “Management consultancy is the service provided to business, public and other undertakings by an in- dependent and qualified person or persons in identifying and investigating problems concerned with policy, organisation, procedures and methods, recommending appropriate action and helping to im- plement those recommendations.”(Greiner & Metzger, 1983) help in understanding what business consultancy is about. They define businessconsultancy as: “an advisory service contracted for and provided to organisations by specially trained and qualified persons who assist, in an objective and independent manner, the client organisation to identify man- agement problems, analyse such problems, recommend solutions to these problems and help when re- quested in the implementation of solutions”. (Greiner & Metzger, 1983)This definition emphasizes two aspects:
  31. 31. Page 31 of 95 - In consultancy, the client contracts a service, not necessarily a person. - In consultancy the consultant assists the client in performing a task. This involves a knowledge trans- fer. Consulting is a planned intervention in a firm whose aim is to identify existing problems and to introduce the most suitable ways of resolving them (Fischer, 1993).This definition describes in generic terms the activities of consulting. The definitions of of (McLarty & Robinson,1998) and (Greiner & Metzger, 1983) are very similar. (Greiner & Metzger, 1983) adds objectivity as a quality ofthe consultant and emphasizes the fact that consulting is about assisting the client. We therefore choose(Greiner & Metzger, 1983)’s definition and change this to ICT Consulting. An ICT Consulting Firm is: “A firm that provides services to business, public and other undertakings by an independent and qualified person or persons who assist, in an objective and independent manner, the client organization to identify ICT problems, analyze such problems, recommend solutions to these problems and help when requested in the implementation of solutions”. 3.1.2 Three types of consulting firms(Richter, Dickmann, & Graubner, 2008) describe two archetypes of PSFs, based on the basic types of organiza-tion configuration as identified in the Institutional Theory. The Professional Partnership (P2) is characterized bythe partnership as predominant ownership and governance model. The professional ideal is the underlyingvalue orientation for the organization. Professionals belong to an identifiable “body that enforces an ethicalcode and insists that its values and standards supersede those of employers”. (Richter, Dickmann, & Graubner,2008)The second archetype is the managed professional business (MPB) and origins from the third wave of consult-ing firms, when firms from adjacent industries such as accounting, auditing and IT entered into the consultingmarket. These firms are characterized by service offerings, organizational and economic models that differfrom the classical P2-model. Many MPB-type consultancies grew large relatively quickly. Because of the capitalrequirements associated with size, partnership structures were often replaced by external ownership. Themanagement function is executed by dedicated administrators with little active involvement in consulting workbecause of the larger size and internal differentiation between service lines. This requires the development ofmore explicit administrative structure and rigorous control systems.Values for MPB-type firms, mostly managed in a more business-like fashion, are explicit objectives such asmarket share, revenue, and profitability targets. “In sum, the interpretive scheme underlying MPB-type consultancies exhibits “corporate” features in that it could well be found in other large-scale companies, in particular in those providing project- based services”. (Richter, Dickmann, & Graubner, 2008)(Brock, Powell, & Hinings , 2007) distinguish a third archetype: The star. The star is a relatively specialized, smallPSF, focused on excellence and leadership in a niche. The star focuses on the highest professional quality andpersonal excellence. The traditional partnership typically persists in the Star.

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