Do IT suppliers and consultancy mix well?

Wipro's plan to increase its consultancy service resources is an attempt to win more business transformation engagements, which could increase choice and reduce cost for businesses.

Wipro's plan to increase its consultancy service resources is an attempt to win more business transformation engagements, which could increase choice and reduce cost for businesses.

Bigger suppliers such as IBM, Capgemini and EDS have already made this move with major acquisitions to increase capabilities.

More competition could be good for customers who pay high fees for consultancy, but it will be a costly exercise for new entrants to attract and retain the required skills.

Wipro is investing in consultancy services as its customers demand more transformational IT projects driven from board level.

Jeffrey Heenan Jalil, European head at Wipro, says customers are increasingly requesting bigger transformational support from Wipro. "A lot of people do not regard us as being in consulting because people have looked at us as a low-cost option, but that is changing because customers are asking us to do more business transformations because they have been happy with our services in the past."

Building consultancy expertise

Wipro is trying to build its consultancy business by attracting the relevent skills. Part of this evolution involves targeting the staff of the big consultancies. "We have been attracting talent from the big players, such as IBM, Accenture and Deloitte, into our consulting practice. This is thanks to our business model, direction and opportunity to grow with an entrepreneurial Global IT services company," says Jalil.

IBM, EDS and Capgemini, which have already been on this journey, each built up a capability at least partly through acquisition. EDS acquired A. T. Kearny in 1995, Capgemini took over Ernst & Young Consulting in 2000 and IBM bought PwC Consulting in 2002.

Jean-Louis Bravard, a veteran of EDS and current director at sourcing specialist Burnt-Oak Partners, says most IT companies which have attempted to move into business consultancy services have struggled because of the way consultants look at themselves. "[In consultancies] the world is very different to your typical outsourcing firm, and especially pure-play Indian companies."

He says Capgemini probably has the best record of integrating the consultants it acquires, but adds that it took over five years. He says there will be challenges associated with retaining and integrating talent. "Wipro is doing the easy part in buying, or renting, talent, but how it turns individual players into a team and manages value from consulting to its core offerings is a challenge."

He says consulting "is a game of expertise and intimacy driven by expensive individuals", whereas "outsourcing is more about leverage, least cost and teams". He says Wipro will have to be patient.

Building trust

And increased choice does not necessarily mean better services for businesses. Bravard says whether increased choice is good for the customers depends on "the honesty of the clients and the quality of the consulting".

"Too often clients just want consultants to add their logo to a pre-existing idea. Too often consultants repurpose opinions across all clients and create copycat strategies, which by and large drive flock behaviour into an abyss."

Bravard believes this would be different if the consultants' fees were at risk should the advice not work.

Lee Ayling, managing director of Equaterra, says IT suppliers could introduce consultancy in the form of advice for its customers. "They could advise customers how to do things better or use advice to sell more services." But he doubts they can become full service consultancies because their heritage is in the services space.

Dave Pepperell, CTO of Capgemini UK, says it is important that consultancy is not just a way of selling more technology. "Today's market is very different from that of a decade ago, and the biggest challenge facing IT services firms aiming to break into the consultancy market is building trust. Client trust is vital in establishing that consultants are there to provide clear, objective and direct business advice - not to sell more technology.

"Such clarity is important within the team so the technologists know that the business consultants will help them ensure that IT is 'doing the right thing' while they can focus on 'doing things right'."

Wipro's ambition in the consulting space is unsurprising if customers are requesting broader services, but the business model is starkly different to services so suppliers entering this must be prepared to invest heavily for slow returns. For customers, choice is always a good thing, but so is independence between business advisors and IT suppliers.

Read more on IT outsourcing

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

  • How do I size a UPS unit?

    Your data center UPS sizing needs are dependent on a variety of factors. Develop configurations and determine the estimated UPS ...

  • How to enhance FTP server security

    If you still use FTP servers in your organization, use IP address whitelists, login restrictions and data encryption -- and just ...

  • 3 ways to approach cloud bursting

    With different cloud bursting techniques and tools from Amazon, Zerto, VMware and Oracle, admins can bolster cloud connections ...

SearchDataManagement

Close