By Deirdre Mercedes – Opal, Quality Systems Management

Big company executives are finding out, too late, that the large consulting firm that they hired is wasting money, time, and resources as they cause a lot of confusion and tension within the organizations that they are supposed to be helping.  They complete the job but it’s usually past the due date and at a cost above the original agreement.  Here is one example of “Surprise Me” budgeting:

I spoke to an executive who found that his company was paying for his consulting firm’s “most experienced people” to commute to his facility from multiple states and abroad?   During a very expensive SAP implementation, he was paying for airfare, hotels and car rentals.  He never got the real number but his staff reported no less than 25 people commuting from out of state.  He had his administrative assistant analyze the cost and he came up with the following weekly figures:  Airfare/round trip (from shortest reported distance) = approximately $250; Hotel = approximately $150; Car rental, parking fees, gas = approximately $150.  These estimates were conservative.  If just 15 people are commuting from out of state for 50 weeks, these costs add up to $412,500.  The cost rises to almost $700,000 if 25 people are afforded this privilege.

Why did this executive start to question the travel quandary in the first place?  About 8 months into the project, his staff members started complaining about the level of service that the consultants were providing:

  • Key individuals were not available in person, by phone or email on Monday mornings because they were traveling
  • Key individuals were not available in person, by phone or email on Thursday afternoons because they were traveling
  • Key individuals were not available in person all day on Fridays because they were working from home.

To make matters worse, the consultants bragged about their travel exploits while interacting with staff members.   The staff members heard rumors that there wouldn’t be profit sharing checks next year and the consultants were telling stories about traveling to multiple states and abroad.

In Part II of  “Companies Selling Confusion & Waste”, we will explore ways to ensure that you choose the right management consulting partner.  Please stay tuned…