In-house Management

versus Management
Outsourced
MIA
Module III
Why a Sense of Skepticism and Unease
Towards Management Consultants.
Cost versus Value of Advice
Separating Consulting Success from
Consulting disaster- Some Revealing
Situations.

Contents
Consulting Products
Dates

Product

Consultant

Organisation

1976

Portfolio Analysis

Henderson

BCG

1980

Five Forces

Porter

Monitor / Harvard

1985

Value Chain Analysis

Hamel & Prahalad

Strategos / Harvard

1998

TQM

Peters & Waterman

MIT

1990

Core Competencies

Reichheld

Bain & Co.

1993

BPR

Hammer & Champy

CSC

1993

Economic Added Value

Stewart

Stern Stewart

Products have a name, a methodology, an application and great PR
Consultants are charged with introducing fashions
/ Utilities
Technology
Providers
Software
Providers
Service providers
McKinsey
IBM
A.T. Kearney
Oliver
Wyman
Deloitte
Accenture
PwC
CSC
EDS
Scient
Sapient
Diamond
Strategy
Consultants
A Consulting Typology
Internal versus External consultants
Internal consultants often operate by mandate than choice.
Sell your own departments approach.
Convert an adversary.
A manager angry with you can be career limiting.
Your world is easily referenced. Reputation key.
Status in organization can be limiting.


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Why a Sense of Skepticism and Unease
Towards Management Consultants
5 Pros and Cons
Pros:
1. Specialized - you can get the best
2. Personal attention from a senior practitioner
3. Each campaign treated uniquely
4. Holistic view - consultant is intimately aware of all
aspects of the campaign
5. Relationship - its easier to form a long term
relationship with the owner/operator than an
account rep that may change jobs

Cons:

Specialized - yet another vendor to manage
Has to wear many hats (eat what they kill)
Physical limitations on number of clients that can
be serviced
Can be more expensive per hour
Limited in the number of things that can be done
well

Cost versus Value of Advice: What can big
companies do today? Organize. Hire an in house
search specialist or project manager, who should be
a strong communicator along with a strong
understanding of SEO
Establish an internal team may include
Person from technology

Marketing
Editorial/content production
Product development
Strategic planning
Sales
Then analyze the data and the roles,- the goal is to not
become beholden consultants. Lastly, educate,
and make sure to follow up and stay current.

Cost Vs value of advice
An Ohio company shoots the works on a
whole collection of management
consultants only to find itself collapsing
under the weight of questionable advice
and bad strategy decisions.
McKinsey & Co., the consulting company
with the most influence, one with all the
attributes of a religious order, constructs a
stunning old-boy network, builds on its
own history, and becomes an international
powerhouse, all the time wrestling with its
own demons.
Bain & co., the most secretive of the
management consulting firms, becomes
ensnared in what amounts to an
international thriller that underlines the
dangers of conflicts of interest and ends up
in a mammoth legal battle with the
authorities.
Andersen consulting, a company that has
turned its skill at technology into a fortune,
stumbles over promises it has not been able
to keep, a record proving with
embarrassing clarity that the bottom line of
management consulting in the slash-and-
burn era of downsizing was money.
Consulting moves in the living room.
Boston consulting group, a company that
once focused on boardroom issues, steps
into healthcare in a big way, inventing
strategies that affect millions of Americans
and could ultimately change the way the
nation goes to the doctor.
Gemini consulting, a relative newcomer to
the field, invents an elegant, expensive,
and complicated strategy, a case study in
how ideas are marketed. But can business
transformation work for a huge insurance
company, a small hospital, and Gemini,
too?
Sears, Roebuck & co one of the nations
premier retailers, turns itself around under
the guidance of an executive who believes
that in the world of consulting, less is
definitely more.

Consulting Firm by Industry
Hospitality
IT consulting
Big Data
Cloud-based IT infrastructure
Mobile apps and data services
ODMs consult
Electronics consult
Future trends
The numbers of both in-house and
agency will decline; this drop will be
partially countered by growth in self-
employed consultants.
An interesting uptick in the number of
those "not employed" in Induvidual
advisers(IAs). Considering how this
number had steadily declined, this is
somewhat surprising, but many
respondents indicated that they'd move
into management, broader work, or new
activities altogether. This is supported by
predictions in what portion of our jobs
will be dedicated to IA in the future. IA
ain't the end-all-be all
When to seek outside help?
For a core competency outside your
department. If you do not have the time
and resources, a buy in from the top, it is
not worth the time to bring in a consultant
or imbedded There has to be a strong
commitment from leadership to
perform.

There are 3 options that should
be considered to be the best
model for the company.
All outsourced (what most people do)
Hybrid, and all in house.
People have started to think along the lines of I
can build a great team for the $2 million that I am
spending on Project Management
This is a growing problem for agencies that need
to provide value
Another question to consider: is the current
model working?

What is the culture? Will vendors fit in, and how
are they managed? For the execution, ask what
is the labor resource required? What are
customized toolsdo we need something
custom?
For cost efficiency, What is the total cost of each
program? What are the barriers to
implementation and what will the costs be to
overcome them? In measuring/predicting time
and success,, he feels that in the end some form
of hybrid marketing will rule.

You can do well completely in house, especially
for the low-hanging fruit


Then there are more advanced things that may
require help such as architectural issues and more
advanced coding problems.
So, if you are going with completely in house:
spend time at conferences, understand you
market share. What are you getting versus what
your competitors are getting.
Completely outsourced: It is nice to have
someone to assign the work to, but you still
need to remain educated, in order to not go
in the wrong directions. Remember that you
will also have to guide the consultant,
especially for keyword selection and
copywriting, as well as link building.

The larger the company the more complex
the politics, usually.
What are the questions to figure out before hiring
someone? What is the staff t- client ratio?
What is the employee turnover rate?
What is the level of customization? What is
the standard deliverable, and what will cost
extra? How does process, training, and on
boarding work? Lastly: Meet your team. At
the end of the day it is about the people who
are working with your business.

Share data. It may take longer to
become comfortable with sharing
sensitive data, but when you can, it will
improve performance. Invest in
learning, and plan for long term gains.
Reward success structure something
in the contract to give agency extra
based on performance. Push for
innovation and exceptional results.

In-house Outsourced
Item Cost Item Cost
Employee wages & benefits $3,450
500 inbound responses ($3.50
each)
$1,750
Employee technology costs
(computer lease)
$20
Telecommunications costs $175
2 days backup coverage
1 vacation day / 1 sick day
$304
Total Monthly Cost $3,949 Total Monthly Cost $1,750
Summary of the pros and cons
of being in-house:
Pros: Strong connection to the product / service
offering and in depth understanding of the industry
and top competitors.
Concentrated focus on servicing just one client instead
of balancing the needs of multiple clients.
It may be less expensive to maintain internal
resources, depending on the size and experience of the
team.
Timely and complete access to forecasts, sales data,
inventory, etc.
Better integration and coordination with other
internal departments, including: marketing,
merchandising, IT, and finance.
Cons to being in house:
Many of the best consultants are extremely
competitive individuals, yet internal positions do
not usually foster this competitive spirit.
There is often a sense of boredom and eventual
lack of motivation that comes with continually
working on the same site as opposed to new
challenges and opportunities.
As part of a small internal team there is often a
lack of informal learning opportunities which
inhibits professional growth and the ability to
deliver in a rapidly changing environment.
With a single in house resource, you will be
constrained to a single set of strategies, as
opposed to best of breed solutions that result
from an integrated team approach.
Professionals are rarely equally trained or
experienced in both organic optimization
and paid search marketing
You may be sacrificing by relying on one
resource or investing in a larger team. It is
often difficult to drive organizational
change from within.
External resources are needed to justify
priorities, directional change, and budgets.
At the moment across the ecosystem
there does not seem to be a single
model that is totally dominant. We have
some web analytics teams in
companies that are all in-house. We
have a whole bunch that are sort of a
hybrid, some work done in-house but
most of the work done by individual
outside Consultants or via one of the
larger web analytics consulting
Companies. There are fewer
completely out-sourced models for
some reason.

So here is a framework to think through stages
of the journey and some characteristics of each
stage.


What does it look like?

You have nothing, no web analytics
implementation or a really new one.
You are just getting started but have
some support from management.
What do you need?
1) Web analytics tools implementation.
2) Show promise from data and
convert the masses.

What is your role?
1) Find the most senior person who
owns your company policies and
assign them the accountability for
deliverables.
2) Dont expect perfection and dont
pick the most expensive tool and dont
pay the consultant lots and lots of
money upfront (youll do that later).
3) Ask to speak to a client that the
consultant has recently lost.


What is the consultants expected role?
1) Talk to the client owner a lot and
some data consumers.
2) Help you find and implement the
best fit first tool fast. (Suggested
vendor selection process.)
3) Teach you not to make mistakes all
their other clients make.
4) Do lots of training sessions and dog
and pony shows around your company
(makes you look good and shows
promise of whats possible).

What should you be careful about?
Most of what will be done in this stage will be
thrown away later, and it is ok. Make sure
you set that expectation with your internal
company customers / partners. As your first
phase targets choose people who have data
affinity and your friends (so theyll stick with
you through the birthing pains), most
definitely dont over-stretch and give 500
people login accounts to your new web
analytics application.
What do you pay consultants?
Small dollars, more frequently.

Stage Two: Toddler to Early
Teens
What does it look like?
You have won over a few converts, the
consultants are pumping in reports that
people are using and you are drowning in
questions, some people have started to
complain about the fact that they dont know
what action to take, the VP of Marketing is
wondering why we keep changing the site
but the analytics tool is not telling them why
conversion rate is tanking.

What do you need?
1) Consider hiring a Web Analyst to be the
in-house resident expert, someone wholl
collect tribal knowledge and be on the beck
and call of the VP.
2) Customized solutions for your business
(because you have realized you are unique
and standardized KPIs from books dont
apply to you).
3) You will find lots of data is missing and
the tags are not right so you will need a
massive effort to update your tags and
collect new data (say site structure, site
outcome details, new cookies/parameters,
campaign meta data etc).


What is your role?
1) Help fill the Analyst position as soon
as you can (look for acumen, curiosity
and simple web smarts).
2) Have the consultant spend a lot of
time on the problem talking to the
people who run your businesses.
3) Find out what the financial goals are
for the project or problem, look for
benchmarks, find out how the success
of others channels is being measured .
What is the consultants expected role?
1) Really understand your business
and your business success criteria and
bring their business acumen to the
table (vs. tool expertise in Stage 1).
2) Create those aforementioned
customized solutions that incorporate
core financial or other goals for key
metrics to show real success.

3) Help you put standards in place to
capture meta-data that you need to do
optimal analysis (meta data round
campaigns, products, website
customers etc). The consultant has to
help you nail all the data problems
(either missing data or bad data) in this
stage.
4) Teach you how to do reporting for
yourself.

What should you be careful about?
This is a very painful stage for you, the
client. There is more data than you can
digest and yet it means little. Be patient,
practice zen. You very deliberately want to
bring reporting in-house now mostly because
it will be cheaper for you to do (and a great
way to train your Analyst) and you really
want to focus the consultant on doing true
and powerful analysis (and teaching you that
as you move from toddler to a teen).
What do you pay consultants?
Medium sized dollars, less frequently.




What does it look like?
Problems and analysis rule the roost.
Your conversion rate (or Problem
Resolution Rate for support sites) has
doubled from 1% to 2%. Your decision
makers have realized that Path
Analysis is a waste of time.
You have extracted all you can from
your data Analytics tool.
What do you need?
1) Experimentation and Testing
expertise, to realize you are wrong
about what your customers want.
2) You need to start moving into
collecting Qualitative data (for example
surveys).
3) Help creating a strategy that would
integrate all the new pieces of data you
will capture.

What is your role?
1) Expand your team in the company to
get other bright people involved on
problem and solution analysis.
2) Identify decision makers who get
Customer Centric Decision Making and
cozy up to them (youll need their
sponsorship / air cover / money).

What is the consultants expected role?
1) Bring tools and expertise to the table
for these new things you know nothing
about.
2) Knowledge transfer (because soon
the general ideas wont bear huge
fruits and youll have to bring business
expertise to the table) and
implementing best practices.

3) Help you integrate your various data
sources so that you can do analysis for
survey responses or figure our multi-channel
impact of your experiments/tests.
What should you be careful about?
Start with modest goals and dont
underestimate the immense resistance youll
get from your company culture. It is very
hard for companies to truly have a customer
centric mindset and at very step you should
be prepared to massage egos and re-frame
things so that they let you bring customer
voice to the table and not just kill it because
of their opinions.
Create case studies when you do a
great test or find out a huge nugget of
information via the Research work.(it
will pay you back big).
What do you pay consultants?
Big sized dollars, a bit initially and then
only periodically.


What does it look like?
You have truly implemented something
akin to the Trinity. You dont have
enough people to do the analysis work.
What do you need?
1) New and different ways to capture data.
2) More people.
3) Create self sustaining processes that feed
active decision making.
4) Maybe another challenge! : )
What is your role?
1) Chief Cheerleader.
2) Find the right talent.
3) Find Insights from Six Sigma and Process
Excellence (books maybe).
4) Truly consultants who really dont do
much work except come talk to you and give
you ideas.

What is the consultants expected role?
1) For the new technologies you are trying
you will need help in understanding
them and instrumenting new ways of
capturing data.
2) Bring truly radical outside perspectives
(that a select few consultants in the world
have) that will both energize you but also
help influence strategy (vs. KPIs or page
design).
What should you be careful about?
You are going to be in very rarefied air,
make sure your organization has the
appetite for risk and they back you. You will
make more mistakes here (but you will also
win big), be prepared for it and make sure
that that is ok. Ensure that you dont go so
process crazy that people have meetings
and do graphs just for the sake of process
meetings (this happens all the time). Your
personal job is to motivate your team
(analytics/research/web/whatever) and keep
the organization on the right track time and
people evolve.


What do you pay consultants?
Huge sized dollars, infrequently.
Its that simple.
There are many great consultants /
consulting companies.Some of them
have different sizes and specialties but
they all know what they are doing


Thank you