Since the previous edition of this book was published in 1996, information technology (IT) has developed dramatically. IT consulting has also grown in scale and in sophistication. Indeed, the need for consulting support in order to realize the promise of information technology has arguably been the engine of growth for the management consulting industry as a whole.

13.1 The developing role of information technology

Walk into almost any business today and you will see a computer on every desk. The senior managers who now start the day by logging-on to their email account are the same people who once proudly declared that they could not operate a keyboard. In part, this change has come about through education and new attitudes to technology, but the main driver of change on the desktop is the increasing standardization, accessibility and power of graphical interfaces and the easy availability of applications for communications, word-processing and other common business tasks. It simply does not make sense for managers to ask a secretary to print out their email when they can read it for themselves on the screen.

Communication within organizations, by email and through the corporate Intranet, is now much richer and often more democratic than in the past. Email has become the communication medium of choice in a world of global business where managers are constantly on the move between different time zones.

Radical change has also occurred behind the scenes in the corporate data centres of large organizations and in the computer rooms of smaller ones. Again the story is one of technology power and standardization. De facto standards created by the leading proprietary technology vendors rest upon more fundamental international standards such as the hypertext transfer protocol that forms the basis for the World Wide Web. With a little encouragement from fears of the so-called “millennium bug”, many organizations abandoned their old

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legacy systems and installed a set of interconnected packaged applications. For the first time this has enabled business to have end-to-end flow of information across their value chain and out to customers and suppliers. Consultants have played a significant role in helping to implement these large-scale information systems, such as electronic point of sale (EPOS) systems, enterprise resource planning (ERP) and customer relationship management (CRM).

All these systems provide access to an ever-increasing volume of data. It is often said that managers today are data rich and information poor. E. Goldratt1 provided a neat definition of the word information: “Information is the answer to the question.” Developments in data warehousing and data mining are helping provide answers to basic questions such as “who is buying our product?” Decision support systems are enabling managers to test their decisions on the computer before they commit themselves and their organizations.

Consultants and IT vendors have recognized that the logical successor to information management is knowledge management. IT systems can help to locate and to share knowledge but there are limitations. As Peter Drucker has said: “Information only becomes knowledge in the hands of someone who knows what to do with it.”

The biggest development that did not happen in the late 1990s was artificial intelligence (AI). This technology has been studied for decades, but the goal of a truly intelligent machine seems to recede as we try to approach it. Successful applications have appeared in restricted specialist areas and a lot of development work has gone into “intelligent agents” to do searches on the Internet, but AI is still not a mainstream application. And yet the need is great: artificial intelligence offers the promise, at last, of helping us to cope with data, information and knowledge.

E-business is covered in detail elsewhere in this book (Chapter 16) but the most fundamental change of all, the commercialization and rapid development of the Internet, cannot be ignored in any discussion of information technology. Bill Gates, the chairman of Microsoft, has said that one of the reasons for his success lay in his being one of the first people to envisage a world in which computing power was so cheap as to be practically free. We are rapidly moving into a world in which international communication through the written and spoken word, and the still and moving image, is so cheap as to be practically free. It is too early to say who has the best vision for this new world.

It would be unwise to be too specific in predicting technology development but some current trends seem set to continue. The trend towards the “extended enterprise”, with information systems that cross organizational boundaries, seems set to continue. Technology will also reach further into the home via the Internet and digital television, putting the majority of consumers on-line.

Another obvious trend is towards mobility. There is a clear need to be able to access the same information in an accustomed manner wherever one is in the world: at work, at home, in a client’s office, in a car or in an aircraft. This can be done now but at the expense of some personal time and trouble to overcome the limitations of the technology. The need for simple transparent

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access to the same information from any location is likely to be satisfied within the next few years.

Increasing bandwidth on the Internet will allow much increased use of multimedia, and this trend will be limited only by the ability to find or generate multimedia content, not the ability to store or disseminate it.

It seems inevitable that the amount of information available to us will continue to increase. Data-warehousing, data-mining, decision-support and knowledge-management technologies are available but are not easy to apply and are still very expensive. Technology has in a sense created the problem of information overload: there is a great need for technology to provide a solution.

13.2 Scope and special features of IT consulting

In order to exploit the promise of information technology, a company must purchase, develop and integrate a vast range of hardware, software and trained people. A reliable and flexible network infrastructure must be built. Databases must be constructed, populated and protected from loss or malicious damage. Individual software applications must be written or purchased and installed. Information systems users must be trained. The goal today is integrated information systems that stretch end to end, from suppliers, through the company itself, and out to customers and consumers. Specialist suppliers exist for all of the components of the company information system: hardware suppliers, network specialists, software houses and application service providers (ASPs). However, few if any companies find it economical to maintain a permanent workforce with the vast range of skills needed to install, develop and integrate these complex systems. The traditional role of IT consultants has been to bridge the gap between a company’s in-house IT capability and the range of IT suppliers that it must deal with.

This symbiotic relationship of consultants and hardware and software providers has led to a complex web of business relationships. For instance, the installation of an enterprise resource planning (ERP) system is a large project that can take up to three years to complete. The suppliers of the software will usually have partnerships with consultants who are skilled in helping clients through this difficult and often frustrating process. Close relationships between suppliers and consultants can be beneficial for all parties but can lead to ethical dilemmas when it comes to giving advice on selection of suppliers. Consultants are faced with a range of strategic options, from maintaining strict independence at one extreme to becoming almost an in-house consultancy for a software house or network supplier at the other extreme. Each point on this spectrum brings different costs, different market opportunities and different risks. Consultants should be clear with themselves and with their clients as to where they stand.

The role of IT consultants and the skills needed are evolving rapidly as it becomes increasingly obvious that technology cannot be left to the technologists.

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The nature of the experience that customers, suppliers, employees, investors and the general public have of a company is now largely determined by technology. A company database that gives a slow response on the World Wide Web is just as annoying as a sales assistant who offers a slow response in a shop. A badly designed Web site will have the same effect on sales as a confusing store layout. There is an increasing need for a rare breed of people with hybrid technical and business skills. Consultants can help meet this need, both by making the best use of rare multitalented individuals and also by assembling effective multidisciplinary teams.

Is IT really so different?

The ever-closer relationship of IT with other aspects of business implies that IT consulting and management consulting should also be converging. This is certainly true but there are additional barriers to exploiting information technology that are not so acute in other fields of business.

Information technology is inherently complex and obscure to most nonspecialists and the scope of the technology is so great that even the information technologists cannot hope to understand all of it. Selection of suppliers is not an easy process and no technology supplier today can offer a “one-stop shop” for all the software and hardware that a company needs. Consultants can help to bridge the gap between those who understand the technology and those who understand the business need.

IT projects deliver an intangible product that is difficult to envisage before it is built. When a new factory is being built, everyone can see the building rising from its foundations and the machinery being installed. Mistakes become obvious before they become irrevocable. When a new software system is being built, future users may see nothing at all for a long time until the system is implemented, when they may suddenly be faced with a dramatic change in the way they work. Experienced IT consultants can help their clients design the system to meet the business need, bridge the gap between developers and users, and anticipate problems before they become obvious when the system goes live.

Technology capabilities are changing rapidly and it can be argued without undue cynicism that technology fashions change more rapidly still. It is almost impossible for any manager to keep up to date with developments in IT. The larger consulting firms are able to draw on a wide range of specialists. Smaller consultancies either restrict the range of their work or rely on a network of consultants to increase their flexibility.

Who are the IT consultants?

It is obvious from what has been said so far that individuals with the skills to be good IT consultants are not easy to find. Consultant firms will often recruit people who have already spent some years in the IT industry. The typical career progression in the industry is from routine operating jobs, through technical

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