Siemens ditches consultants
Long walk for men with clipboards
Engineering behemoth Siemens is canning contracts with external management consultants in order to cut costs.
Peter Löscher, chief exec of Siemens, told managers last month to cut contracts with external consultants as quickly as possible. Staff should use internal consultants or seek sign-off from the group's chief finance officer, according to the FT. Any such exceptional projects will need to prove a return on investment within the year.
The German engineering group hopes to save about a “middle three-digit million euro sum”. Contracts with the likes of McKinsey and Accenture are likely to be early targets.
Cutting consultants and contractor staff is often the first step for firms looking to cut costs. For companies which don't have many consultant staff but need to cut costs, the usual procedure is to hire some in at vast expense to tell you who to sack.
Siemens had 425,000 staff around the world on 31 December 2008 - three thousand less than at the end of the previous quarter. ®
Everytime I read "consultant"
Everytime I read the word consultant I have to think of that special Dilbert where Dogbert says "I like to con, I like to insult. That makes me a consultant, doesn´t it?"
This probably means that Siemens will try to offshore even more development to India. I have serious doubts that they will actually stop working with externals. Their announcement to ditch the consultants may seem like they plan to reduce costs by letting internal people do the work but that is not how they work. I have worked as a consultant for Siemens business Solutions for a few years and this is how they do most of their business:
The bid on almost any big project available, often with prices below market value to make sure they win it. They make a big deal about how they are a huge company focused on quality, ISO certified etc etc.
Once they DO get the the project they hired a bunch of external to do the project of pass (part of) the project to a small consultancy firm (like I was working in) who are happy to get a chance to work on a high profile project.
The client charge the customer X euro, keep half for themselves and the other half goes to the sub contractors which results in very slim margins for them.
The put 1 Siemens project manager on it who has at least 50 similar projects. This means that they will do as little as possible, do not expect them to do more than send 2 mails a week.
In the end I was really disgusted with their way of working and I am very happy that I am not working for them anymore. They just pass the buck to their subcontractors, whenever there was an issue or problem with the spec you would just give in to keep the client happy and the subcontractor would have to resolve it so it did not cost them a thing.
I am sure they will start working with externals again once the economy picks up because the make tons of money doing fuck all.
@ Anonymous Coward for a reason
Quote: "as far as I can see, have no evolutionary value at all"
Chilling, sir. Paris because she knows a c### when she sees one.
Makes no sense
How can you hire external consultants (for whatever reason) and then ditch them (rather than anything else in your business) when money's tight? Just don't hire the consultants if you don't need them or don't hire your staff who may not be doing a job you need. Whatever makes sense in your business (I'm thinking that ditching the consultants whose expertise you currently need might not be it). You are capable of running a business aren't you?
consultants there for a reason
I'm currently a consultant in a big international company. Thousands of permanent staff, but nobody with the skills to do a job i don't consider too complicated. I work alongside permies who, as far as I can see, have no evolutionary value at all. They don't seem to be able to do anything, especially anything well. Yet this company's HR is particularly good at shielding the incompetent from being flushed, while good permies walk. The managers hire 'faces that fit' and they aren't exactly burning rocket fuel either, so all I can see from where I sit is a sea of the mediocre, the jobsworth and the grossly incompetent. If they get rid of me, I can get another job, as I am good at what I do, so it's kinder to lose me than one of these others who wouldn't have a hope in hell out there in the cruel world.