Opinion: Objectivity: Don't Settle for Less

By Bart Perkins

August 9, 2004 12:00 PM ET

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Computerworld - Today, it's very difficult to get objective advice regarding IT direction and strategy. Many of the firms that used to specialize in IT strategy work are now owned by large systems integrators or computer manufacturers. To make matters worse, many IT suppliers now offer referral fees to firms that recommend their products and services. So much for objectivity.
Years ago, there was much more market fragmentation: Strategy firms dispensed advice, systems integrators built systems, outsourcers ran data centers, and manufacturers delivered hardware or software. There was no "one-stop shopping." On the positive side, the customer got objective advice. On the negative side, since the strategy firms didn't have delivery experience, their time and cost estimates were sometimes inaccurate. In addition, poor communication among the companies involved often resulted in misinformation, much like the old game of "telephone." These disconnects could cause expensive mistakes.
All parties believed that tighter linkage would offer benefits:

Customers felt that they were more likely to have new systems delivered on time, on budget and with high quality if the people who built the plan were also responsible for executing it.

Strategy firms wanted to grow. They saw that systems integration companies were getting 10 to 20 times as much revenue for implementing the plan as they were for building the plan.

Systems integration firms felt that if they worked with senior executives to establish the strategy, they would get more implementation work.

Manufacturers viewed systems integration as a new line of business that would help them sell more of their traditional IT products.

End-to-end integration appeared to meet everyone's objectives. Therefore, some of the manufacturers and systems integrators began to acquire strategy firms: CSC acquired Index, EDS picked up A.T. Kearney, and Nolan, Norton & Co. was acquired by KPMG Peat Marwick. Other companies, such as Andersen Consulting, started their own strategy groups. IBM did both.
Large companies that have their own strategy groups often use IT strategy and planning projects as loss leaders. They offer to do the planning work (worth hundreds of thousands of dollars) at minimal cost in order to get millions of dollars of hardware sales or systems integration work. Unfortunately, these plans often specify particular hardware, database software and application packages or services that can be performed only by their own company. So much for objectivity.
As a result of the industry consolidation, there are very few firms that can dispense truly independent advice, but they're out there if you look hard enough. When searching for objectivity, keep these tips in mind:

Look for an independent "boutique." Although sometimes difficult to find, these still exist. They are best found through referrals from people you trust.

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