Table One: Large System Consulting Firms and Transorganizaitonal Development
|Firm||Total 1998 global revenue1($bil)||Biggest division as percentage of revenue2|
|IBM Global Services||$29.03||IT outsourcing (41%)
They continue to focus on TD1- Business Process Reengineering and IT outsourcing.
|EDS||16.9||IT outsourcing (53%)
The primary large system change management initiative is TD1 - Business Process Reengineering and tight coupled supply chain negotiations.
|Andersen Consulting||8.4||IT development and integration (59%)
The approach is Alliance Collaboration among Competing Firms.
|CSC||7.4||IT outsourcing (42%)
Change focus is on IT outsourcing.
|Cap Gemini||4.7||IT development and integration (60%)|
|4.0||IT development and integration (58%)
The approaches include multi-user computer networking, suppler networking to focal organizations and global e-business.
|4.0||IT development and integration (55%)
The main focus on change is KM to tie corporate strategy to the knowledge economy of the next millenium with IT.
|3.04||IT development and integration (69%)
Change approach is environmental consulting including work with Greenpeace and doing something about global hunger. Most TD2.
|McKinsey & Co||2.5||Strategy and management consulting (100%)
I intend to have another look, but given their celebration of Taylorism and structural functionalism, I would say TD1 and have not learned OD is dead (press here)
|Deloitte Consulting||1.8||IT development and integration (53%)
Appears to follow change approaches mentioned in Cap Gemini.
|Booz, Allen & Hamilton||1.55||Strategy and management consulting (60%)
Focus sounds like TQM.
|1Company statistics. 2Dataquest
1997 estimates extrapolated by Forbes for 1998. 330% of revenue
from supporting/maintaining hardware and software products. 4Fiscal
year ending Sept. 30, 1998. 5Fiscal year ending Mar. 31, 1999.
This Table was adapted from Forbes, March 8th, 1999 by D. Boje of TDgameboard.
TD consulting is big business. In 1998, eleven consulting firms exceeded one billion in annual global revenues (Forbes, 1999). We can organize and compare their large systems change strategies in a typology of TD1, mixed TD1 and TD2, and TD2 approaches. For example, the largest revenue-earners IBM Global Services ($29 billion), EDS ($16.9), CSC ($7.4) and Cap Gemini ($4.7) --- engage in what I call TD1 change strategies (Boje, 1999c). These multi billion dollar operations focus in one way or another on outsourcing and new or old variations of business process reengineering. There are also several consulting firms that appear to me to imitate the large TD1 consulting firms, such as Deloitte Consulting ($1.8 billion) and Pricewaterhouse-Coopers ($4 billion). I call these TD1 approaches.
There are billion dollar-consulting firms still applying single-organization strategy and structure change approaches of traditional OD practice. For example, the mono-organization approaches taken by McKinsey & Co ($2.5 billion) and Booz, Allen & Hamilton ($1.5 billion) do not tackle the complex and dynamic transorganizational issues of the 1990s global economic realities. To me (199b) OD consulting is passe since transorganizational concerns with multi-organizational behavior, supply chain organizing, world wide networking, individual identities splitting loyalties across multiple social and business networks, and the global division of labor has rendered OD obsolete (Boje, 1999a).
There are also mid-range consulting strategies
that combine TD1 and perhaps some TD2 worldviews and practices. For
example, Anderson Consulting ($8.4) defies the tradition of cut-throat
competition by promoting alliance collaboration among competing firms in
order to combine R&D and other investments. Ernst & Young ($4 billion)
is experimenting with complexity and chaos consulting as well as Knowledge
Organization approaches. Work by Anderson and Ernst & Young could be
seen as mid-range consulting between TD1 and TD2 networking models.
At the other extreme is a European multi-billion dollar consulting firm, KPMG International ($3 billion) that uses what I would call TD2 approaches. The KPMG focus is on implementing environmental accounting standards, environmentally sustainable business practices, and doing something constructive about world hunger.
What follows is an alphabetical listing of TD consulting strategies I read from the web sites of the billion doallr firms.
Anderson Counsulting is showcasing "Alliance Consulting" (press here). I define Alliance Consulting is defined as interorganizational networking for collaboration among competitors. Transorganization Development (TD) happens where there are multi-party competitor alliances. AC reports in a survey of 323 senior executives, the average large company has 30 competitor alliances than account for 15% of its market value. The research was conducted by Tarun Khana of Harvard and Bhart Anand of Yale. Kalbach and Roussel of AC put the report together. The cross-industry surveys and 11 day roundtable discussions involving 400 executives included companies from North America, Europe, and Asia. AC has noticed an increase over the past five years of multi-partner "corporate alliances" as the playing field transitions from industrial to "electronic economy." AC reports 61% of the alliances in the new electronic economy have been outright failures, some involving well-known multi-billion dollar firms. AC lists five areas that we in TD refer to as MYTH-MAKING or STORYTELLING that lead to alliance failure:
Booz·Allen & Hamilton - a leading management and technology consulting firm focused on business strategy and transformation. We provide services to clients on six continents through two business sectors—the Worldwide Commercial Business and the Worldwide TechnologyBusiness (press here). Taking a restructuration approach that sounds like TQM "clients design and execute programs of strategic and operational change and build their capabilities for continuous improvement" (press here). They focus on operations management, finance, IT and strategy. I will take more of a look here, but thus far it looks like single organization consulting as opposed to TD work.
Cap Gemini - The main change strategy is Enterprise Resource Planning (ERP). CAP Gemini stress networking Intranet for employees, Internet for customers, and Extranet for supplier networking (press here for pdf file). The focus of change is on managing supply chain and customer interfaces with It architecture. The business reality is that the society and global commerce is becoming increasingly networked with sector environments ranging from global to multi-domestic.
CSC - Computer Science Corporation -
CSC has 52,000 employees in more
700 offices worldwide and had revenues of $8 billion for the twelve months ended July 2, 1999. Its headquarters are in El Segundo, California.Computer Sciences Corporation (NYSE: CSC) CSC announced September 30, 1999 an agreement in principal for a ten-year information technology (I/T) outsourcing contract with Computing Devices Canada (CDC), a unit of General Dynamics Corporation (NYSE: GD) (press here).. Like IBM, CSC focus is on outsourcing IT. For example, they have a $400 million contract with DOD over next four years to provide voice, video and data communications capabilities to U.S. military organizations worldwide(press here). CSC change programs reportedly clarify customer strategies, energize and mobilize the workforce and leverage emerging technologies like the Internet to create new business opportunities.
Deloitte Consulting - One of the world's leading management consulting firms, providing services designed to transform enterprises - strategy, processes, information technology, and people. Deloitte Consulting's Telecommunications & Media Practice is one of the fastest growing in the firm and serves clients in wireline, wireless, satellite, broadband, Internet, media, entertainment, equipment, and regulatory businesses (press here). The main activities are Enterprise Resource Planning and e-commerce. Instead of sustainable business practices (see KPMG below), they do "Sustaining Globalization," precipitated a worldwide debate on the impact and implications of the process of globalization which has left no countryuntouched (press here). More TD1 than TD2.
EDS - EDS is a global company with 95,000 people on-site and customers in more than 40 countries. EDS says they are not just telling another technology story when they say go "e" (press here). Definitely a TD1 enterprise since the main strategy continues to be Business Process Reengineering - e.g. (press here). IT is the underpinning that will ensure the success of global airline alliances. Press Release: Tuesday, September 28, 1999 EDS Signs $1.5 Billion Services Extension With Continental Airlines (press here). EDS takes its storytelling to print, TV and INternet media. EDS bought up A. T. Kearney management consulting, which in 1995 was the world's second largest, high-value management consultancy (press here). The change strategy is to negotiate and manage relations with supply chain partners.For example, A.T. Kearney works with clients to define negotiation boundaries and evaluate counterparts — their motivations, strengths and weaknesses (press here). The focus of TD is to tighten relations in the supply chain network through tough negotiations (press here). In sum, EDS Workforce Change Management experts from EDS HumanPerformance Services use reengineering TD1 processes to manage change (press here).
Ernst & Young - One approach taken by E&Y is the "Knowledge-based business" IT approach to single businesses (press here). E&Y says "Knowledge Management" is not a fad (press here). From a TD perspective, E&Y sees KM as a way ot leverage worker knowledge or KW around the globe by linking KW to IT. E&Y describes itself as a leader in "Knowledge Management" consulting as depected in their Life Cycle of Intellectual Capital Chart. E&Y is getting into community of ineterest database networking from a Knowledge Managemenet perspective (press here). E&Y also has a strong focus on IT intratnet-consulting focus on networking multi-organizational client-servers, such as use of ACS software for designing computer and large call-based interfaces (press here). They all their general approach "technology enablement" for distributed networks of computing (press here) and marrying knowledge and technology (press here). E&Y specialists sift through industry knowledge to make it available to clients in several "Knowledge Centers" (TD consulting. E&Y surveyed 431 firms to assess interest in Knowledge Management (press here). Respondents want to speed innovation and manage relations with customers. They report being ready for taxonomies. Besides hardwiring IT multi-user networks, E&Y does supply chain work between focal organizations and their hundreds of supplier firms (press here). John Low reports that in the new e-economy it is speed and security of informational flows that matters (press here). There has been an exponential increase in interconnectivity due to intra and Internet that is transforming how business relates to employees, supplers, and customers - as well as how we interact socially (press here). E&Y observes that building "trust" in e-communities is changing business practices. At a TD level this means processes to co-develop trust, which includes secure network communications. E&Y reading of transorganizational history (or its restorying) is that trust is fundamental to market structures and processes (press here). E&Y is focusing its e-consulting (Center for Trust On-Line) on the models, langauges and frameworks that engender trust. They get their theory from SRI and Kevin Kelley's New Rules for the New Economy: 10 Radical Strategies for a Connected World (1998, Viking). The focus is on finding trust in industries that are facing dramatic restructuring in the new digital economy (press here). According to co-evolution theory, new business practices, social practices, and ecology each co-evolve with changes in business relationship patterns. Best & Kellner (1999) argue tht Kevin Kelley has trivialized the ethical issues involved with this co-evolution. For example, E&Y is grappling with the issue of how to balance network security with increased access to consumers' and employees' private records (monitoring and surveillance) while generating trust in corporate e-commerce (press here). From a postmodern perpective the issue is how to change corporate image-building from "brick and mortar" to the virtual imaging of corporate identity on the web. Customer, supplier, employee, and managerial information privacy and access is the currency of the new e-commerce.
KPMG International - KPMG is definitely a TD2 consutling enterprise working on the values and ehtics of TNC behavior in late modern global economy. KPMG has been commissioned by Greenpeace to find out if solar energy can compete with conventional forms of power (press here). KPMG has a niche in environmental consulting: "Companies are under increasing pressure to report on their environmental performance, and 44 percent of the world’s top 250 companies in the non-financial sector already produce an annual environmental report" (October, 1999). KPMG Environmental Consulting, in collaboration with the University of Amsterdam, has published the most comprehensive survey of environmental reports ever conducted, covering top companies in 19 countries. KPMG found that 15 percent of banks, insurance, and securities companies produce an annual environmental report. Furthermore, environmental reporting is now mandatory in several countries and European Union member states will soon be required to register emission data from large companies and report it to the European Commission. Professor George Molenkamp, chairman of the KPMG International Environment Network, disputes this opinion: "Companies can't afford to give an incorrect picture of their policies and operations, especially not towards their shareholders. Besides, an increasing number of companies have their environmental reports verified by independent third parties, often combining the expertise of environmental experts and financial auditors"KPMG aso used e-commerce solutions in a first-of-its-kind global fight against extreme poverty around the world. Leading computer networking company Cisco Systems Inc. plans to invest US$1 billion in KPMG LLP to expand the firm’s global Internet services. KPMG showas an awareness of info privacy issues "As information privacy laws become more widespread, many companies with international operations are still unaware of how this legislation will affect their operations. They have a helpdesk for MNCs in Yugoslavia. In sum, KPMG encourages investment in Green production processes and Green accounting processes. Its consulting is defnitely TD2. For example, KPMG International chairman Colin Sharman said, "In recent years it has become increasingly evident that a wide range of leading international companies recognise financial performance is not the only yardstick by which their sustainability should be measured." KPMG maintains a network of expanding environmental, ethical and social reporting functions in 14 countries. European accounting standards are getting tough on environmental issues. For example, Work is currently underway to determine the need for standards against which environmental reports can be verified.The European Federation of Accountants (FEE) has recently finalised a European survey of verifiers’ reports and researched appropriate standardised wording for verification standards. In a recent survey, Companies in the US and Europe are more likely to supply environmental information in the annual report than companies in the Asia Pacific region.
is a world-wide corporation with roots planted here in Omaha, NE (press
here)- 6 forces model. One of the forces is the Knowledge Economy.
The assumption is the world economy has shifted away from traditional assets
towards intellectual assets (press
here). P-C states three-quarters of the world's corporate market value
resides today in intellectual resources and the other quarter I assume
in IT. The approach is formal Knowledge Management (KM) initiatives, such
as enterprise portals and intranets for sharing knowledge
internally, and extranets for sharing knowledge directly with clients and other external stakeholders. A typical first step: find out where knowledge resides. Second, develop knowledge measures. Third, a corporate KM strategy to tap knowledge economy of the next millennium.
It appears that Anderson, Ernst & Young and especially KPMG are working with new worldviews on transorganizational consulting. KPMG respresents, I believe the future of consulting, a praxis that teks the entropy of the ecosystem and world poverty as a given, then tries to devleop environmental auditing and greener and more humane production and consumption practices with its clients. Anderson focuses on moveing from predatory to trust-building relations. Ernst & Young is experimenting here and there with more grounded understandings of netwrok transactions. The rest of the pack will soon make the transition to optimizing shrot term transaction cost to looking at long term impact and the growing requirements of social and environmental accounting. These requirements are underway with the new international standards of ISO14000 and SA9000, as well as a growing recognition that a new balance is needed between individual-gain-seeking and the local as well as global community limits.
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