IT Consulting Forecast Good, But With Challenges

The next five years hold a lot of opportunity for IT consultants as clients strive to maximize their competitiveness in a “more for less economy,” according to James Champy, chairman of consulting at Perot Systems Corp.

But for clients to maximize the benefits of IT outsourcing and consulting, they must not lose sight of the need to increase value for their customers as well as enabling them to cut costs.

To reach either goal, however, clients must agree to make fundamental changes in their approach to running their operations, and it is up to consultants to advise them through these changes, he said.

“I believe the role and importance of consulting will increase,” he said.

Champy, a 30-year veteran of IT consulting, was the keynote speaker at the Ziff Davis eSeminars IT Consulting Leadership Virtual Symposium on Thursday.

Champy, who has written several books, including “Reengineering the Corporation,” is responsible for providing direction and guidance to Perot Systems’ business and management consultants.

Among the most critical changes consultants will have to guide their clients through is the globalization of their workforces and the standardization of business processes that make both global and domestic businesses more efficient.

Specifically, in projects involving the offshoring of job functions, consultants must help clients select an outsourcer that will respect the way the company does business and make sure the switch to an outsourcer doesn’t involve unwanted changes in process.

Whether outsourced or insourced, business processes such as human resources—which are not unique to any particular organization—must be standardized, Champy said.

Though clients like to believe that much of what their companies do is unique, when you peel back the layers only about 10 percent of the process at any given company truly qualifies, he said.

That small percentage is important to the smooth operation of the company, however, and that component is what IT consultants must help the client protect, Champy said.

As for the rest, the consultant must push standardization of processes and transparency between the client, its customers, suppliers and partners.

Transparency—the ability of both buyer and seller to monitor all parts of the exchange—contributes to the goals of cost-cutting and increased productivity.

Champy cited an example involving Owens & Minor Inc., a supplier of medical equipment, which, after analyzing the cost of sending delivery trucks at the same hospital locations several times in a day, worked with the hospitals to improve efficiency and cut costs.

Cost-cutting efforts that do not include an effort to innovate and add value to the process being revamped will produce disappointing results. Consultants must help clients be innovative, Champy said.

“Our clients think in very limited terms about innovation,” he said.

Click here to read more about Champy and “Reengineering the Corporation.”

He cited airline JetBlue as a company that gets innovation. The airline has built a low-cost business model that still manages to provide a customer experience that is different from that of its competitors, right down to the blue potato chips it serves, Champy said.

For most companies, lack of innovation is an execution problem, not lack of ideas. The ideas exist, but companies by and large don’t know how to go about implementing them.

And even though clients understand the need for technology and cutting costs, they resist change. In the 30 years Champy has spent consulting, he says he has found that companies traditionally resist the types of behavioral changes they must embrace to succeed.

“This is hard work, but this is a great opportunity for all of us as consultants,” he said.