You Don't Get Fired for Hiring IBM

Many of you had heard the old adage, "you don't get fired for hiring IBM". If you haven't, I'll explain – it's essentially a phrase that I've heard on occasion in our industry that explains why a prospective client would select the larger, more established option, as opposed to the smaller, niche consultancy. 

Why do big names often win out?

Notice that I didn't say that hiring IBM (or the Big 4) is typically the result of an intensive due diligence process in picking a consulting partner; it is often more likely that a Big 4 is selected due to the fact that the team selecting its partner isn't willing to go against conventional "wisdom" and explain to its board why they are going against "establishment" and choosing the upstart, niche firm. I'm sure it was quite the marketing slogan for the IBM's and Microsoft's of the world once upon a time, as it fed nicely into the F.U.D. factor – Fear, Uncertainty, Doubt. 

Candidly, selecting a partner based on this approach is dangerous, as you're selecting a firm based on what might happen if you don't align yourself with the blue-blood or seemingly established provider, rather than basing your choice on experience, domain-based expertise and cultural fit.

The realities of Big 4 consulting firms

Now that I've dispensed with my definition of this sometimes popular phrase, I'll explain why it rubs me the wrong way. Full disclosure – I've never worked for IBM or the Big 4 (and after I finish this blog, I likely never will…); that said, I've worked alongside Big 4 consulting firms (I won't use IBM any longer in this piece, as they are basically out of the game in our industry) for several years. 

In fact, my first exposure to working with the Big 4 was working on a project in which a small army of PwC consultants were dropped into a joint client to help drive a massive technology and operations strategic transformation. It took the client a while to realize the lack of depth of the team of dozens of consultants that were charging high rates and delivering little value. This was close to 20 years ago, and if I had a nickel, every time I've seen it since……well, you know how that saying goes. My PwC experience was not an anomaly, as I've worked alongside E&Y, Deloitte and the rest of the "Big 4" with similar results.

In consulting, experience is key

What are the hallmarks of bringing in the big name consulting firm? In my experience, it's that you have to take the good with the bad – for every partner or rising star senior manager that is able to guide you through a tough decision, you often have to weed through a dozen junior consultants with little-to-no experience in the asset management space. There is often a lack of transparency on larger projects specific to how many resources are on the ground, the value that is being provided and the rate card/fees that are being invoiced.