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What is the future for publicsector consulting? A Source report, sponsored by Capgemini Consulting
Sponsored by
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Executive summary The level o consulting in the public sector has allen dramatically since the election but debates about when it will
recover miss the point.
The research summarised in this repor t was based on a survey o more than 100 senior public sector managers across
central and local government, and the NHS, and on in-depth interv iews with 2 0 more during the course o October
2010. It demonstrates that senior public sector managers ully expect the private sector to play a bigger role in
central government in the uture. But it also shows that they want to work with consulting rms in a new way. Joint
ventures are expected to play an important role here, leveraging the skills o public and private sectors perhaps
alongside those in voluntary organisations. Traditional consulting will be combined with “doing” and paid or on the
basis o success. This creates a once-in-a-generation opportuni ty or the consulting industry to reinvent itsel, at
least where public sector work is concerned. But it will also depend on the public sector taking a more sophisticatedapproach, putting together commercial deals instead o simply buying advice.
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ForewordKeith Coleman, Global Head of Public Sector, Capgemini Consulting
Capgemini Consulting is delighted to sponsor this independent research which demonstrates the appetite public sector
managers have or nding new ways to work with the private sector. Its conclusion – that the consulting industry needs
to reinvent itsel or a new post-C SR world, creating joint public-private ventures ocused on results – is something we
wholeheartedly endorse.
We are already at the leading edge o working in new
ways with the public sector to make delivery happen.
For example, Working Links, our joint venture with the
Department or Work and Pensions, Manpower Plc,
and Mission Australia, has been pioneering a more
collaborative approach, oering support to unemployed
and disadvantaged people to get them back to work. Over
the last ew years, Working Links has grown to become
one o the country ’s leading welare to work delivery
organisations, helping more than 150,000 individuals
back to work through matching them with an employer
or helping them to set up their own business. While we
continue to play an active role in this public/private joint
venture it is very much a successul business in its own
right. Today, Working Links employs more than 2000
people in 180 locations spread across England, Scotland
and Wales, and eatured in the Sunday Times 100 Best
Companies to Work For list. The Links Foundation – a
charitable trust set up in 20 04 by the shareholders – has
returned more than £3 million to the communities whereWorking Links delivers, benetting 150 projects.
We are also working in new and innovative ways with local
government as they address the major challenges that they
ace post the Comprehensive Spending Review (CSR ). For
example, or Gloucestershire County Council, we have
been delivering side by side with public servants in vital
areas such as school transport and ront-line customer
contact to make real eciencies, with our experts directly
accountable or perormance improvements.
Traditional consulting has, even at its impressive best,
stopped at the point w hen recommendations have been
made and obstacles to implementation identied. Beyond
that, clients have been on their own. Our experience, in
Working Links and other initiat ives over the last decade,
is that there is an alternative approach, one in which
consultants become involved in delivery, build the skills
o the people they work wi th and are paid by the results
they achieve.
Working in this way creates substantial challenges or both
consulting rms and the public sector, but unprecedented
problems can only be solved by brave and innovative
solutions. Capgemini Consulting is already in the oreront
o making many o these ideas work in practice. With
this report, i t also hopes to acilitate a debate across the
public sector about how best to create a new model o
partnership or the challenging times ahead.
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The speed and severity o the cuts in public sector
consulting have surprised consulting rms.“There’s a complete moratorium on using consultants,”
remarked one senior civil servant interviewed or this
report. “The notion that we might use consultants to
work on some o the changes we’re currently planning just
doesn’t enter into the conversation. It’s literally a taboo
subject.” “The government has the ability to recruit, train
and retain the best people,” said another, “so we should
be making best use o the skills we have rather than
bringing in consultants. The challenge at the moment is
more about the infexibility o government when it comes
to deploying sta .” Some departments, notably DEFRA,
have already been experimenting with replacing traditionalorganisational structures with a project-oriented system
that builds interdisciplinary teams to tackle discrete tasks.
It’s a similar story outside Whitehall: “ There’s very lit tle
consulting going on,” conrmed an NHS manager. “There’s
no budget. It’s not just the economic climate that’s driving
that, but also the ear about the negative publicity which
might result. We can’t use consultants – and we can’t be
seen to use them.”
Our research suggests that there is litt le prospect o an
immediate resurgence in the use o consultants. Three
quarters o the public sector managers we surveyed said
that expenditure on consultants in their organisations willall urther in the next 12 months, and 40% o them by more
than 20%.
However, one o the undamental reasons why
organisations, in both the public and private sectors, use
consultants is to access specialist skills which are not
available internally and which it doesn’t make economic
sense to have in-house because they’re only needed
occasionally. This hasn’t changed: almost hal the public
sector managers we surveyed said that they expected a
shortage o in-house skills would increase the probability
that consultants are brought in. Here’s a manager in the
NHS talking: “We’ve used consultants a lot in the past and,
i anything, there’s a greater appetite to use them in the
uture. GP surgeries are partnerships which have to make
a prot or their health centre; they’ll undoubtedly look to
other private sector organisations to help them do so.” Help
in restructuring, operational improvement and technology
change top the list o skills expected to be scarce.
Moreover, public sector organisations are also likely to
nd themselves short o good people across the board. As
many a private sector organisation has ound out to its cost,
restructuring and threatened job losses trigger an exodus o
senior people who are condent o nding securer employment
elsewhere. Given how long it can take to replace senior
civil servants (a point the National Audit Oce (NAO) drew
attention to in its 2006 report on central government’s use o
consultants), this will result in increased short-term demand or
general management and policy development skills.
Is public sector consulting dead?This means that some consulting activity will return over the
next year. This is likely to come in two orms.First, there will be some high-prole projects where external
and objective input will be required. Our survey suggests
that public sector managers expect to increase their use o
larger consulting rms relative to other types. Asked what
kinds o rms they would hire in the uture, people working
in central government departments said they would be
twice as likely to use big strategy rms to niche ones, and
big IT rms over smaller ones. They are also roughly three
times more likely to mention Big Four rms (Deloitte, Ernst &
Young, KPMG and PwC) than any other type o rm. This is
to be expected: aced with the severest recession in living
memory, private sector managers reacted in the same way,increasing the proportion o money spent with the biggest
consulting rms. The security and comort oered by a
well-known brand was the primary driver behind this: “I
our budget is limited and we’re only bringing consultants in
to work on high-prole projects, how can I deend a decision
to hire a rm no one has ever heard o?” was how a private
sector manager described the dilemma.
A second but less deensible use o consultants will be to
ll management roles – the sta “substitution” or which
the industry has already incurred criticism, but which some
rms, keen to recoup lost revenue, already appear to be
positioning themselves. “Never mind the idea o imposinga threshold at which ministerial approval has to be sought
or using consultants,” said a senior civil servant we
interviewed, “what the Cabinet Oce should have done is
ban the use o consultants entirely. We may not be able to
buy consulting serv ices, but we’re spending a lot o time in
meetings with consultants who have oered their services
ree, oten to ministers and special advisers.” Distraction
wasn’t the only problem with this: “We also put ourselves
in debt to rms that do this. You worry that there may be a
tacit promise o uture work.”
Both these approaches miss the point. Our research
suggests that public sector managers want a very dierent type o relationship with consulting rms going orward,
something that has the potential to drive a wedge through
the consulting industry, separating those rms that continue
to ocus on selling advice and expertise rom those that are
prepared to become an integral part o the public sector.
The aim o this report is to explore these points in greater
detail:
• Whattypeofpublic-privatesectorrelationshipdo
seniorcivilservantsenvisageinthefuture?
• Whataretheimplicationsofthisfortheconsulting
industry?
• Whatneedstobechangedinthewaypublicsector
managerswork,inordertomakethisaspirationa
reality?
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Figure1:
Do you think the private sector will play a greater role
in central government within the next ve years?
5
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The senior public servants we surveyed are in no doubt that
the changes heralded by the CSR will result in the privatesector playing a greater role in central government.
According to our research, those expecting private sector
involvement to increase outnumbered those that don’t by
a actor o our to one (Figure 1). Moreover, many also
anticipate the private sector’s role widening. That two
thirds believe that the private sector will be involved in
back-oce unctions is perhaps not surprising (Figure 2) :
outsourcing IT is already common and the recent debate
about shared services is oten predicated on at least some
o the service being oered by a third party. However,
just over hal o those we questioned said they also expect
the private sector to be involved in delivering ront-oceservices in the uture, and a quarter think private companies
may take over some areas o policy development.
Cost is the primary driver behind this. The probability o
private sector involvement increases depending on the
money they can save: almost 60% o people surveyed
said that this will be an important actor in using private
companies (Figure 3) . A more commercial outlook among
civil servants and the lack o any realistic alternative or a
cash-strapped public sector will also infuence this decision.
Public acceptance o greater private sector involvement is
not, however, expected to be a actor, implying that public
sector managers recognise that any plans they have orincreasing the role o the private sector are unlikely to have
widespread support.
80%
70%
60%
50%
40%
30%
20%
10%
0%
Yes No Don'tknow
68%
20%
12%
70%
60%
50%
40%
30%
20%
10%
0%
Back-oceunctions
(eg nance,HR and
procurement)
Front-oceunctions
(eg call centres,process benet
applications)
Policydevelopment
Figure2:
In which o the ollowing unctions do you think the
private sector will be involved over the next ve
years?
66%
52%
24%
The coalition economy
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80 %
70%
60 %
50 %
40 %
30 %
20%
10%
0%
Total Centralgovernment
Localgovernment
Other public sector(incl. NHS)
Figure4:
Which o the ollowing orms o private sector input do you think will be most common in the uture?
Complete transer oownership
Outsourcing
Joint venture
Delivery partner
Consulting
Interim management
The extent to which private companiescan demonstrate cost savings
A more commercial outlook amongpublic sector managers
The absence o any realistic alternative
Growing public acceptance o privatesector involvement
0% 20%
Figure3:
To what extent will the ollowing actors increase the probability that private sector companies will be involved?
40% 60% 80% 100%
58%
46%
44%
25%
But what orm will this greater involvement take? What kind o relationship does the public sector expect to have with the
private sector?
While still wanting to access specialist skills, civil servants don’t expect to obtain them via traditional routes. Only 13% on
average expect interim managers will be common in the uture, and only 29% think that consultants will be (Figure 4).
Note: Respondents were able to pick up to three o the ollowing options:
• Complete transer o ownership: Where a unction or organisation becomes a standalone private business or part o another private business.
• Outsourcing: Where a private sector company takes over a specic business process, selling the service back to a public sector body.
• Joint venture: In which public and private sector organisations share ownership, revenue and costs.
• Delivery partner: In which a private company is asked to undertake a specic, tangible task such as implementing a new IT system.
• Consulting: Where a private company provides advice and support to public sector employees.
• Interim management: In which individuals take on line management roles or a dened period o time.
2 2 %
6 4 %
4 5 % 4
7 %
2 9 %
1 3 %
3 1 %
7 2 %
4 1 %
4 1 %
2
6 %
1 3 % 1
6 %
6 9 %
4 7 %
5 9 %
1 3 %
1 9 %
1 8 %
5 2 %
4 8 %
4 2 %
4 8 %
9 %
% o respondents rating this actor 4 or 5 on a scale o 1 to 5, where 1 = least probable and 5 = most probable
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By contrast, 64% believe that outsourcing will be very common; 47% think that private companies will be used as delivery
partners, to under take specic, tangible tasks; and 45 % expect to see more joint ventures in which public and private
organisations share ownership, revenue and costs. Responses varied in dierent parts o the public sector. More people
in central government departments expect outsourcing and complete transers o ownership (in which a public sector
unction or organisation becomes a commercial business). In local government, the expectation is that there will be
greater use o delivery partners and much less use o traditional consulting. Only in other parts o the public sector (in terms o our survey, largely the NHS), is there a belie that consult ing will be common again in the uture.
What stands out is that , while public sector managers expect the private sector to be more involved, they don’t want to
hand over complete control to it, hence the preerence or outsourcing, joint ventures and the use o delivery partners .
Implementing the plans o the coalition government will require a coalition economy in which private and public sector
organisations, alongside voluntary ones, will have to work together. “We have to save £20 billion,” one public sector
executive summed up the situat ion, “and we are quite prepared to spend money with private sector organisations where
they can show they can help deliver that. But we don’t want – or see any reason – to revert to the kinds o relationships
we had with such organisations prior to the election. Our world is changing beyond recognition, and theirs needs to as
well.” “There’s been a lot o talk by consulting rms about ‘working in partnership’ with the public sector,” said another,
“but it hasn’t always been clear to us what this meant in practice. For some rms, it was just a marketing statement, a
modus operandi which implied a more collaborative style o working ; others took it to mean greater accountability. Either
way, it’s hard to point to a single project where the concept has created measurable value or either side. That doesn’tinvalidate the idea, but it does raise the question o how it might do so in the uture.”
Thus ar, there has been no clear articulation o these issues: ocused on identi ying potential savings in the run-up to
the Comprehensive Spending Review announcement, at tention in the public sector is only now being turned to the detail
o how the proposed changes will be made in practice – and there is still some way to go beore civil servants star t to
consider the role the private sector may play. “In so ar as we’re thinking about this issue at all, it ’s at the very edge
o our radar,” said one senior civil servant. “The serious thinking will s tart now the spending review has happened,
but the conclusions will take time to work out. It’ ll be at least six months beore we’re in a position to start meaningul
discussions. We have to wait or the dust to settle.”
But vacuums are dangerous. Here, because no alternative relationship has been articulated, the risk is that an opportuni ty
is missed to reinvent the way in which public sector managers work with consultant s, and vice versa.
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We asked public sector managers to distinguish the
characteristics they would like to see in private sectororganisations which work with the public sector in the
uture. Although asked in the context o a wider discussion
about the role o consultants, their responses provide
some indication o their more general preerences as well.
Broadly speaking, their views divided into three main areas:
• Structure:thekindofprivatesectororganisations
theywanttoworkwith.
• Relationship:thetypesofcommercialarrangements
theythinkwillbeappropriate.
• “Asset”-related:theextenttowhichjointworkingis
reinforcedbyinvestmentandawillingnesstogive,not take.
Next generation consulting
80%
70%
60%
50%
40%
30%
20%
10%
0%
Totalsample
66%
12%
Figure5:
To what extent will the act an organisation is at least
partly owned by its employees be important?
34%
64%
36%
65%
35%
68%
32%
Centralgovernment
Localgovernment
Other publicsector
(incl. NHS)
Unimportant Important
70%
60%
50%
40%
30%
20%
10%
0%
Totalsample
55%
12%
Figure6:
To what extent will a private sector organisation's
record in employee relations be important?
45%
58%
42%
53%47%
52%48%
Centralgovernment
Localgovernment
Other publicsector
(incl. NHS)
Unimportant Important
Structure:collaboration and opportunity
We asked those we surveyed and interviewed their opinions
on the merits o our organisational models, all o which have
been the subject o recent debate in the media.
Employeeownership: One area o discussion has ocused
on whether some public sector unctions would operate
more eciently as mutuals or other types o employee-
owned organisations. It was a point made by several o our
interviewees: “Rather than transerring sta to a shared
service centre or even to a private sector supplier, we
should be able to oer them the chance to have a stake
in a new orm o business,” commented one. “There is
denitely an appetite or new business models in the public
sector, especially among politicians.” However, our research
suggests that such thinking has so ar had only a limited
impact. Approximately two thirds o those questioned
thought this would not be important in choosing a privatesector organisation, an at titude that was consistent across
all parts o the public sector (Figure 5).
Astrongrecordinemployeerelations: Most people
expect to see a rise in outsourcing across all areas and
unctions o the public sector – something that will inevitably
involve transerring sta to private sector organisations.
Our survey suggests that this is an issue which a signicant
number (45%) o senior civil servants regard as important
(Figure 6). “Clearly, more o what we do will be done by the
private sector in the uture,” commented one, “but in making
that happen, we will have to be able to demonstrate that the
suppliers we choose are going to protect, even create jobs
and that the people transerring across to them will have
opportunities or training and development they wouldn’t
have had in their previous employment.”
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Socialenterprise: A similar proportion (48%) o public
sector managers also believe that it will be important
or a private sector organisation to have links to
social enterprise (Figure 7). People in the NHS were
substantially more likely to think this important. Those
in central and local government, less so, but even here,a signicant minority (4 3%) value such connections.
This suggests that , while some public sector managers
maintain a clear distinction between public, private and
third sectors, others would like to see those boundaries
blurred. At the moment, the “Big Society ” agenda is
litt le more than that, with minimal practical fesh on its
aspirational bones. Asking private sector companies
to deliver services in conjunction with charities and
voluntary organisations may be one attractive and cost-
eecti ve way to make it a reality.
UK-basedoperations: This question received the
strongest response, presumably because it tapped into
well-publicised ears that a shrinking public sector in the
UK will uel growth in emerging, lower-cost economies.
Senior civil servants will always be aware o the political
context when responding to questions such as these
and rame their responses accordingly: 65% o central
government managers considered this to be an important
actor in choosing which private sector companies to
work with, as opposed to 35% who did not (Figure 8). The
reaction was less extreme in local government and other
areas o the public sector.
Overall, this part o our research suggests that a
substantial minority o senior civil servants have decided
views about the type o private sector organisations they
expect to be working with in the uture. Senior Whitehall
managers in particular may expect more o the work
done by them and their teams to be undertaken by private
companies; they would like this to be done by organisations
that treat their sta well and are capable o working
collaboratively with the not-or-prot sector as well; but
they do not want to see jobs moving overseas.
Figure7:
To what extent will a private sector's connections with
social enterprise be important?
70%
60%
50%
40%
30%
20%
10%
0%
Totalsample
45%
12%
Figure8:
To what degree will the extent to which a private
sector organisation's sta are based in the UK, as
opposed to overseas, be important?
55%
35%
65%
47%53 % 57%
43%
Centralgovernment
Localgovernment
Other publicsector
(incl. NHS)
Unimportant Important
70%
60%
50%
40%
30%
20%
10%
0%
Totalsample
52%
12%
48 %
57%
43 %
57%
43 % 42%
58%
Centralgovernment
Localgovernment
Other publicsector
(incl. NHS)
Unimportant Important
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Relationship:Focused on outcomes
The importance o moving the use o consultants to
outcome-based contracts and payment was highlighted
in the National Audit Oce’s October 2010 report,
Central Government’s Use o Consultants and Interims:
“Departments should dene the expected outcome and
benets at the outset and make more use o incentive
based and xed price contracts to deliver these outcomes.
Business cases should be assessed by people that
understand how to use consultants eectively. Using
time and materials contracts, and a ocus on daily rates
alone, can lead to cost overruns and unnecessary work .
Perormance assessments should include a review o the
outcome o the work, and whether benecial changes havebeen achieved.”
Progress has been made here. The 200 6 NAO report on
government’s use o consultants showed that ew public
sector contracts contained any perormance-related
element, but our research shows that this has increased, to
a point where it is now more prevalent than in the private
sector, suggesting that some government departments
have been more sophisticated than their private sector
counterparts when it comes to buying consulting services
(F igure 9 and 10). However, public sector managers are
also substantially more likely to make traditional, time-and-
materials payments , indicating a wide variance in the way
parts o the public sector buy and use consultants: i some
areas are more sophisticated than the private sector, many
remain less so.
41% o the senior public sector managers questioned
by us, and 51% o those working in central government,
recognised this opportunit y (Figure 11 overlea). Given
that a greater proportion o outcomes-based pricing was
recommended in the NAO’s 2006 report, perhaps the
most important question is why, despite the widespread
recognition o the appropriateness o this approach,
it doesn’t happen more in practice. One reason is that
only some consulting services lend themselves to this
approach, but the NAO also pointed an accusing nger
at procurement processes which ocused on the initial
stages o contract management rather than ensuring
eect ive value or money during the course o a project.
“Procurement unctions will oten only have time and
expertise to deal with the initial contracting and have
limited oversight o the progress being made on individual
contracts,” it noted.
Figure9:
Breakdown by type o payment in the public sector.
Time and materials
Risk and reward
Fixed price26%
64%
10%
Figure10:
Breakdown by type o payment in the private sector.
Time and materials
Risk and reward
Fixed price37%
55%
8%
Source: ‘Quarterly Buying Trends in Consulting report’, September 2010,
sourceorconsulting.com
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The people we interviewed go urther: many, especially
those not based in the procurement unction, criticised
government rameworks or “orcing” them to buy skills on
a time-and-materials basis. “I think there’s been conusion
here between the need to ensure we’re using our own sta
to their ull ability and the way we hire consultant s,” said
one. “Clearly, we should star t rom the position o using
our existing ski lls where we have them, but that leads
quickly and almost unavoidably into a discussion about
the additional skills and, thereore, indiv iduals we need to
plug the gap. It’s hard to stand back and say, ‘how can the
private sector help us achieve our objectives? ’” “We can
see, even now, that we may want private companies to put
together commercially viable propositions or taking over
some o the work we do,” said another, “but I can’t see any
way in which we could do this using the rameworks that
have been developed or buying in external support.”
That sense o rustration is widespread: even the NAO’s
recommendations are thought to miss the point. “What ’s
the point o telling us how to buy consulting bet ter, i we’re
not buying consulting anymore?” asked a senior local
government manager.
60%
50%
40 %
30%
20%
10%
0%
Totalsample
41%
12%
Figure11:
Will payment by results increase the use o consultants?
51%
41%
30 %
Centralgovernment
Localgovernment
Other publicsector
(incl. NHS)
% r e
s p o n d e n t s a g r e e i n g
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90%
80%
70%
60%
50%
40%
30%
20%
10%
0%Total
sample
29%
12%
35%
23%29%
Centralgovernment
Localgovernment
Other publicsector
(incl. NHS)
Unimportant Important
12
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Assets:
Building, not abandoning
Outcome-based contracts and payments aren’t just
important in their own right: our survey suggests that they
are also a means to a more undamental and important end.
Back in the 1990s, sometimes consulting could be seen as
a hit-and-run aair, with little attention apparently paid
to the sensitiv ities o a client’s sta. Aware that they
were stoking resentment or the uture, the consulting
industry has spent the last decade building and promoting
its ability to work alongside clients. However, at its heart,
traditional, advisory-style consulting revolves around a
relationship in which one side tells the other what to do in
return or payment.
It’s clear rom our research that civil servants, aced with
the challenge o making unprecedented cuts in public
spending, want to move beyond this. Asked whether
they thought a better understanding o the public sector
by private sector companies would be important in the
uture, more than three quarters agreed (Figure 12).
We suspect this mirrors a reaction we noted in private
companies during the recession. Then, companies which
had been through traumatic periods o restructuring chose
consulting rms which understood, and were prepared to
adapt to, a new set o constraints.
The reaction was equally strong when we asked about the
extent to which a private company’s willingness to use the
knowledge o civil servants would be an important actor.
71% o respondents agreed with this (Figure 13) . The
public sector is not a green-eld site on which suppliers
can erect buildings o their own design; it has existing
assets – tacit knowledge, skills and strengths not ound in
private sector organisations – that need to be incorporated
into whatever joint ventures and other initiatives will be
created in the uture. The point relates to structure (each
participating organisation has a distinct role in creating
value) and opportunity (public sector managers have
skills that should be leveraged), but also to culture (theacknowledgement that private and public sector skills are
complementary).
Figure12:
To what extent will a better understanding o the
public sector on the part o private sector companies,
be important?
Figure13:
To what extent will the willingness to recognise and
use the knowledge o civil servants, be important?
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Totalsample
23 %
12%
29%
71%
17%
83%
21%
79%
Centralgovernment
Localgovernment
Other publicsector
(incl. NHS)
Unimportant Important
77%
65%
77%71%71%
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A once-in-a-generation opportunity
13
What is the uture or public sector consulting? | November 2010
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These perceptions among public sector managers create a
compelling agenda or change in a consulting industry thathas been largely built on selling expertise, not delivering
measurable outcomes.
But what will a public sector consulting rm look
like in the uture? Certainly, it won’t look much like
a traditional advisory rm, but nor will it resemble a
conventional outsourcing rm. Extrapolating rom the
research summarised in this report, we think it will take
responsibility or delivering work that has traditionally
been done in the public sector. “Advising” will be replaced
by “doing”. This may be in a back- or ront-o ce unction,
policy development, or a combination o all three.
A rm’s business case or participating in such deals will bebased on its ability and willingness to oer better training
to, and increase the innovation and improve productivity
o those currently doing the work, rather than cutting jobs.
It will thereore be able to demonstrate an exceptional
record, not only in developing its own sta , but in taking
in teams rom other organisations and oering them new
opportunities and in using its experts to train in-coming
sta rom the public sector, not to replace them. It will be
prepared to invest in the local communities where it works,
building skills there rather than sending work overseas.
Rather than delivering the work as a conventional service,
it will create joint ventures and other structures in which the distinction between public and private sectors becomes
meaningless. It will already have experience o work done in
conjunction with not-or-prot and voluntary organisations
– and will be willing to incorporate the skills and resources
o the third sector in new ventures in the uture.
In commercial terms, these initiatives will be structured to
ensure that everyone, irrespective o whether they came
rom the public, private or third sectors, is incentivised
to ensure delivery, and shares equally in the risks and
rewards o success. They will be managed on simple
commercial principles, not pulled in a multitude o dieren t
directions as a purely public sector organisation would be
nor built around utilisation and time-and-materials as a
conventional consulting rm would be. Participants will
be paid based on the perormance o the venture, perhaps
even rom the surplus it generates. Much as people
starting a business would be, they will be paid when the
venture can aord to pay them. Their ocus will not be
to complete a project on time, or to add some entirely
intangible value, but to create an “asset” (anything rom a
new process to a ully-fedged, sustainable organisation)
which all the participants in the venture have contributed
to and which they all jointly own.
Not every consulting rm will embrace this opportunity:
some – perhaps the majority – will preer to cont inue toprovide skills as they have always done, and be paid largely
on the basis o time they put in. Demand will continue to
exist or this modus operandi, although at ar lower levels
than seen in recent years. Other rms, however, those
brave enough to plan and invest, will seize the initiat ive
and articulate now how they plan to do things very
dierently in the uture.
“I I was a consulting rm I’d be modelling my proposit ion
on this approach,” commented an NHS manager.
“Consulting rms need to reinvent themselves.” There is
a huge opportunit y here or the industry: “With details
o the CSR announced, attention is not so much on whatis to be done as how it is to be done,” said a civil servant .
“That ’s what’s needed now. And i this isn’t the wake-up
call that the consulting industr y needs then I don’t know
what is.”
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Breaking down the internal barriersAnd it’s not just the consult ing industry that needs to change.
In interviewing public sector managers across a wide range o government departments, local authorities and ot herinstitu tions, it is clear that the level o thinking about the issues outlined in this report varies dramatically. Our survey
also suggests that civil ser vants wit h less experience o using consultants are less likely to consider using outcomes to
measure perormance and as a basis or payment; are more likely to think in terms o the skills and people they would
require; and have lower expectations when it comes to the consulting indus try taking t he initiative to change their ways
o working.
In Whitehall, people rom policy-driven departments tend to see consult ing rms much more as upmarket body-shops than
those who worked in departments which have large-scale ront-line and/or operational responsibilities . Comments varied
rom “We should be putting more eort into breaking down our requirements rom consulting rms to a more detailed
level so that we ensure we’re get ting a round peg or a round hole”, to “In the uture i t will be critical to break down the
boundaries between areas such as consulting and outsourcing. This is a sign o intelligent buying, seeing that there are
connections between ser vices which the public sector can take advantage o.”
A more sophisticated approach rom the consulting industry will need to be met by greater sophistication among public
sector managers, particularly when it comes to procurement. Private companies, when setting up joint ventures, don’t
ask their procurement teams to invite bids rom a range o suppliers. Rather, the venture is the outcome o months
o discussion between t wo parties, as each eels its way towards a commercial structure best able to deliver their
objectives. There isn’t a buyer and supplier, in the conventional sense. As the non-executive director o one government
agency put it: “We shouldn’t be putting up walls between ourselves and the private sector, but tearing them down.”
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What is the uture or public sector consulting? | November 2010
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AboutCapgemini
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Capgemini Consulting is the Global Strategy and Transormation Consulting brand o the Capgemini Group, specialising
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