The consultancy racket

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I’ve always been suspicious of the big consultancy firms. When I worked on a project in Whitehall some years ago, I watched a team from one of the major outfits at work. An ultra-cautious, ass-covering junior minister was required to make a decision about a project. Rather than ask hard questions himself, he ordered an investigation by a Big Consultancy Firm. The firm sent in a squad of sharp-suited kids who went around asking silly questions for a week and then produced a stupefyingly obvious PowerPoint presentation which told the minister what he wanted to hear. The bill for this hogwash came to £70k. The minister thought it was good value because (a) it wasn’t his money, and (b) it provided him with a document he could wave at the Public Accounts Office if any questions were subsequently raised about the decision. The whole thing was astonishingly cynical, unprofessional and shoddy.

Now comes an interesting report from Information Week about allegations contained in lawsuits filed last week in an Arkansas federal court by the US Department of Justice. The complaints claimed the defendants — companies like Sun, HP and Accenture — paid or received kickbacks from dozens of companies in violation of federal law, while denying that they had such arrangements.

Accenture figures prominently in the government’s complaints.

While Sun and HP allegedly paid millions of dollars each year in kickbacks, Accenture allegedly accepted them in the form of “system integrator compensation,” rebates, and marketing assistance fees. The company earned all three from Sun and HP, according to the complaint.

As a consultant for the government, Accenture was hired as an objective adviser in choosing vendors and purchasing IT equipment, software, and services. The government, however, says Accenture and its purchasing subsidiary, Proquire, were less concerned with their client, and more interested in profits and revenue from partners. “As a result, millions of dollars of kickbacks were sought, received, offered, and paid between and among the defendants with the alliances in violation of the False Claims Act and other federal statutes and regulations,” the complaint said.

Between 1998 and 2006, Accenture earned more than $4 million in cash from system integrator compensation, the complaint said. Between 2001 and 2006, Accenture received such fees from EMC, HP, IBM, Informatica, Mercury Interactive, NCR, PeopleSoft, and Sun. With the exception of Sun and HP, none of the other companies are accused of any wrongdoing.

Accenture also received rebates and marketing assistance fees that were based on a percentage of the revenue in reselling partners’ hardware, software, and services. Under government regulations, such rebates or fees should be pass on to the government.

Accenture, for example, earned more than $32,000 in rebates from HP in July 2002, and more than $2 million in marketing assistance fees between 2003 and 2005 from Sun, according to the complaint.

Without telling the government, Accenture also negotiated steep discounts on hardware, software, and services, and then sold them to the government at higher prices. “Accenture personnel were instructed to constantly look for ways to structure government contract transactions so as to provide for greater opportunities to maximize resale revenue often at the direct expense of its government clients,” the complaint said.

Thanks to Nick Carr and Bill Thompson for alerting me to this particular example of ingenious consultancy ‘services’.

Overcoming writer’s block

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Scott Berkun is an amazingly prolific and intelligent author. His book, The Art of Project Management, is a minor classic. He’s written a fascinating essay listing the tricks he uses when faced with an irritatingly blank page/screen. I particularly like this one:

Whiskey. Yes, alcohol is writing’s seductive little mistress. A well timed shot of whiskey can work wonders for the jittery, neurotic mind. It’s the shock to the system that works for me, so when I can’t start, there are alcholol free alternatives to get things flowing: a cold shower, an underwear clad run up the driveway, a shot of espresso, a peek at my naked wife, the list goes on. Don’t depend on these (as the more you use, the less they work, except for the last one), but occasionally they’re the only way.

The Toyota way

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The Guardian reports that

Toyota became the world’s leading seller of cars in the first quarter of this year, overtaking US rival General Motors for the first time, it said today.

The Japanese group, which began life making weaving looms, said it sold 2.35m vehicles, a 9% jump, compared with the 2.26m sold by GM.

Having owned a Toyota for nearly three years, I can understand why they’re winning.

Morning

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Cambridge on a summer morning with the Cripps Building of St John’s in the distance. The first-floor rooms overlooking the river make up the set where Mervyn King (now Governor of the Bank of England) lived when he was a Research Fellow. Time to start campaigning for a plaque — especially if he manages to keep interest rates down!

Where the webcam wasn’t

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One of my favourite webcams is this one. I’ve often wondered about its precise location.

On Friday afternoon I was walking across the bridge on my way to Trinity when I suddenly remembered it and took this picture from a position roughly diagonally across from where I guessed it must be located.

So where is it? My guess is in a window in the top storey of the dark-red brick building on the corner.

YouTube biggest hits may not be infringers

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Interesting NYT report…

ON YouTube, copyrighted video clips of movies and TV shows are far less popular compared with noncopyrighted material than previously thought, according to a new study.

On their face, the results could have serious implications for YouTube’s owner, Google, and the media companies, most notably Viacom, with which it has been negotiating. But not everyone agrees.

Vidmeter, which tracks the online video business, determined that the clips that were removed for copyright violations — most of them copyrighted by big media companies — comprise just 9 percent of all videos on the site. Even more surprising, the videos that have been removed make up just 6 percent of the total views (vidmeter.com).

The Vidmeter report is here.

Aw shucks. Microsoft is standing up for the little guys

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This morning’s Observer column…

Wearing his best public-spirited citizen look, Bradford Smith, Microsoft’s general counsel, told the New York Times that Google’s proposed acquisition would ‘combine the two largest distributors of online advertising’ and thus ‘substantially reduce competition in the advertising market on the web’. Between them, Citizen Smith continued, Google and Doubleclick deliver ‘over 80 per cent of the adverts delivered to website publishers, so their combination in a single company has big ramifications’.

Call me Panglossian, but this is encouraging news. One looks forward to General Counsel Smith advising his employer that its 92 per cent control of the market for operating systems also has ‘big ramifications’…

Putin News Service

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From Saturday’s Herald Trib…

MOSCOW: At their first meeting with journalists since taking over Russia’s largest independent radio news network, the incoming managers had some startling news of their own: From now on, at least 50 per cent of the reports about Russia must be “positive”.

In addition, opposition leaders cannot be mentioned on the air and the United States is to be portrayed as an enemy, journalists employed by the network, Russian News Service, say they were told.

The report goes on to say that:

Parliament is considering extending state control to Internet sites that report news, reflecting the growing importance of Web news as the country becomes more affluent and growing numbers of middle class Russians acquire computers.

Business as usual in the Kremlin, then.

Billg welcomed with open source as well as open arms in Beijing

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Like most senior executives of western companies, the Microsoft Chairman has been assiduous in sucking up to the Chinese government. Recently he was rewarded with the title of “Honorary Manager” at a ceremony at Beijing Peking University. He also gave a lecture on “China’s Creative Future”. So it was highly fitting that he was greeted by a chap proclaiming the merits of Open Source software. The demonstrator, I need hardly add, was bundled away and is no doubt languishing in gaol.

Thanks to Rex for the link.