Tan Kin Lian's Blog: Consultants and Government

Friday, March 19, 2010

Consultants and Government

Consultants earn a lot of revenue by providing service to governments. Read this article.

Quote:
Over the decades, all government administrations, in all jurisdictions, have been spending public money on consultants without managing the value delivery side of the equation. Consulting firms know that once they get through the procedurally intensive selection process they essentially have an open-ended license to generate revenue.
Unquote

Does this also happen in Singapore? I have heard of large sums of money being paid by the government agencies to management consultants. Share your views.

Tan Kin Lian

5 comments:

consultant said...: Hi Mr Tan

Like what the article said, the money spent is only one part of the equation. The ministry / branch of government using the consultant must get value out of the consultants' delivery and must make sure that they manage these people properly.

I do some consulting work for the government, for specific industry related issues. My job is it identify these issues, put them into something that these govt people can understand, and use to have a sensible discussion with people from the industry to resolve them. Its something they will not be able to get a handle on, or take a very long time to fully comprehend. You can say that I provide external expertise, but nothing unique in the sense if they hire people with the same background with 15 years experience they can have the same in-house view / expertise.

I think I do add value in some respect, in the sense that my work do get used in actual life. I see white elephant projects in cases where money is spent but the deliverable is lousy, or does not make an impact at all in many ways.; March 19, 2010 6:27 AM
C H Yak said...: I work in the construction industry for many years. All my projects (private and public) involve consultants employed by the Govt or private developers as the Client. i.e. we are the contractor.

Consultants also submit competitive bids in tenders to be offered a project. For public projects, usually the lowest bid wins. In private projects, it depends and can be negotiated.

The problem with the "equation" is management consultants do not actually implement the "solutions" i.e. the actual "value delivery side of the equation" as mentioned.

Consultants only give an overall view of the problem and try to state the exact requirements. The solution providers are involved in a different tender to implement the actual solutions.

Hence, the Consultants' "paper" solutions in abstract form have the following limitations:-
(1) It is too abstract or does not clearly define the actual problems faced and the exact criteria (specifications)required from the contractor' solutions.

or
(2) It is clear enough, but not practical for implementation, lack of field knowledge.

The "delivery" process and actual value adding is from the solution providers or contractors.

Whether you need a good consultant or a good contractor, I believe is not mutually exclusive in decision.

In implementation, the project team culture and also the internal organisational culture is a key factor. Next good leadership from the Client is essential; and also from the management consultant & contractor.

In the construction industry, there are different approaches in contract management - Design & Build, Turnkey, etc. But the industry is "technical" in nature and therefore easier to have a certain degree of good success.

But in other industries, when "change" solutions or "business process re-enginerring" is involved, the actual "value delivery" is questionable. It often means the "change" consultant is engaged, but they are working with the internal setup of the Client...the success is highly dependent on how well the change consultant manage the "CHANGE" culturally within the Client's organisation, beside his understanding of the "structural and business process change" required. And good leadership is important from the Client.

It is well researched that 50~70% of such "CHANGE" process or BPR would failed because of poor leadership and internal cultural issues.

Finally the success rate is also hinged to costs.
(a) Change Consultants's fees
In Singapore, consultants have a bad habit of trying to help the Client saves or simply shift costs to the "contractors".

So if they are squeezed in their own fees, and solutions provided are not "total " but only "partial" solutions on paper; and if implementation costs are shifted and added onto the contractors' burden, then the project is more or less 'doomed" from the start. Good leadership from the Client must recognised responsibility for additional costs which are payable to the contractor during implementation. If it involves only the internal setup, they must justify such additional internal spending and budget.

If not, failure is a common outcome and it is easy to put the blame on the Client's own setup due to cultural issues.; March 19, 2010 9:49 AM
symmetrix said...: I remember 2 instances of govt engaging consultants to find suitable names for prominent public places. Their deliverables were not worth any salt.

1. To find a good name for new low-cost terminal. Consultants came up with "Budget Terminal". What a letdown.

2. To find a nice name for new development in Marina Bay. Again, consultants came up with "Marina Bay". How sad.

And the govt accepted both these names! Who knows how much the consultants were paid. What a waste of resources, but I guess the govt can afford it. These are consultants we do not need.; March 19, 2010 7:37 PM
sgcynic said...: The latest name fiasco is "Your Singapore".; March 19, 2010 7:58 PM
Anonymous said...: All the consultants out there are trying to "con" your money. I haven't come across one that gives more that what he/she is being paid. Can't people learn from their mistake and use some common sense?; March 20, 2010 3:55 AM