Getting It All Done: Cap Gemini Ernst & Young
Michael Wujciak is a vice president and Americas Automotive Leader at Cap Gemini Ernst & Young (CGE&Y). As he talks, one thing is very clear. These people aren't the kind of consultants who create a notebook (or notebooks) and then drop it on an executive's desk (invoice to follow). "One differentiator is that we always link the business to technology," he explains, adding that implementation is often part of the equation.
That is, yes, there is a strategic portion to what they do for OEMs and suppliers (Tiers 1 and 2, mainly). They look at various aspects of strategy for companies, from developing new markets to determining how assets should be handled. "But when we provide strategy as a deliverable," he says, "it is tied to how it is implemented."
A very telling observation that he makes is that because they are so attuned to performing implementation for clients, they are acutely aware of the importance of creating an implementable and a workable solution to a customer's needs. Having to practice what is preached keeps one honest.
There are a variety of functions that the 300-plus people involved in the practice perform. In addition to people who are experts in business functions and organizational design, there are people who have operational expertise, all the way down to plant-floor control systems. There is a large contingent of know-how related to enterprise resource planning (ERP) implementation, but Wujciak hastens to point out, "We firmly believe that the first thing we must do is to solve a business problem; it's not that everything we do is related to an IT solution, so let's find a problem." Information technology (IT) is important. It isn't everything.
When they do perform an implementation, they use what he describes as a "rational, unified process": they utilize an iterative approach rather than the classic waterfall approach. In the CGE&Y method, they get a prototype up and running quickly so that they can demonstrate results; they don't wait until the whole thing is ready to flow.
This whole notion of speed—of getting things going expeditiously—is perhaps captured best in the company's Accelerated Solutions Environment (ASE) and Advanced Development Centers (ADC). This is proprietary know-how—and real estate—in which things can get done... fast. According to Wujciak, the slogan that they use in association with the ADC is: "What it normally takes six months to do can get done in three days."
He describes an actual setup. There is a cadre of CGE&Y experts who have done prework on a project. Then there is a group of 75 executives from a major company. These folks work 12-hour days. Three of them. At the end, they have an operational strategy and an implementation plan. They know what they need to do and how it needs to get done. And it is worth repeating: All of this is done in three days. Sure, it is a big commitment of resources for a company to bring together a far-flung executive staff in one place at one time. But it is something that can provide a framework for results pronto.
Wujciak acknowledges, "In this Internet economy we're in, a company can ill-afford to wait six months." At least it can ill-afford to wait that long if it can be done in three days.
Speaking of "e," Wujciak remarks, "One of our big clients is Covisint. We're going to help make that a big success." He acknowledges that other firms are also working with it; he claims that CGE&Y has more consulting people working on Covisint than any other. His point seems to have less to do with bragging than it does with a point that he thinks is very important to the auto industry, which is build-to-order. He says that automotive needs to work hard at linking order management with physical material and information flow.
In effect, what he is talking about is a collaborative environment wherein customers, manufacturers and suppliers are synchronized. Covisint is certainly one manifestation of this. Which may go a long way in explaining why CGE&Y is so involved with that organization: supply chain, IT, B2B, B2C, CRM, ERP, technology—these are many of the things that they're all about.
The Cross-functional View: Accenture
By now you probably know that Accenture is the company formerly known as Andersen Consulting. John Cunningham, a partner with the firm who specializes in the automotive sphere, explains that given the company's size—it is a $10-billion organization with 70,000 people in 46 countries ("Approximately 50% of our revenues are generated outside of North America," he notes)—it tends to work with OEMs and larger suppliers. "This is partly because we work on strategic programs," he explains, adding, "And the bigger Tier Ones gravitate to us because we are a global firm." (Of course, Accenture works with a broad range of industries; it shouldn't be thought that all of those people and all of the revenue are associated with the auto industry alone.)
Cunningham has been with the organization for more than 20 years, so he has a pretty good perspective on what the company does when working with its clients. Of course, given that there are varying issues that client companies are trying to grapple with, there are different approaches that are taken by the consultants who are working with a particular company. What's more, there is the simple fact that a company may have the same problem as another company but is at a different point in that problem's lifecycle, which means that there would be a different approach taken. However, one of the things that he says Accenture personnel are consistent on is what is called the "business integration methodology." He explains that this is a method by which they assure that "processes, technologies and people are aligned."
It is this cross-boundary view that Cunningham thinks is important when it comes to bringing in a consultant. He points out that often the person who calls in the consultant has a "silo" view: one that is essentially based on whatever that person's function is within an organization. The consultant has a wider point of view because he is coming to the problem from outside the organization; the point of view is one that is not only more encompassing, but which is less restricted (i.e., instead of the situation of the proverbial "If you have a hammer, all problems look like nails," here it is a situation where there is greater neutrality.)
"Another thing is implementation capabilities. Most clients were not trained to run projects," Cunningham says, adding, "They were trained to run departments and functions within businesses. The skill sets needed to run complex, multi-sourced programs are different." So one of the things that Accenture does, he says, is to help people get ramped up so that they can run these programs.
"We are not focused," he insists, "on writing a bunch of reports, dropping them on a desk, and then saying, 'Go do it.' We want to make sure that what we propose can be done," he says. So they work after the front-end procedure of report-writing.
Asked what he finds to be a difficulty in working with people who have not worked with consultants before, Cunningham responds that sometimes there is an "ego battle." Some people are concerned with outsiders coming in and telling them how to do things. Cunningham says, "Our goal is to make the people we work with—and we work peer-to-peer,shoulder-to-shoulder—successful." It is not a them-and-us scenario.
"We work hard to build long-term relationships," Cunningham says.
After all, what's more effective with regard to getting the next job than a referral?
Small But Swift: Michael Paris Associates
Speaking of Michael Paris Associates Ltd. (MPA; Oak Brook, IL), Michael Paris is nothing if not candid—which ought to earn that consultancy a second look. "We're dinky." They're not fielding a far-flung staff of consultants. Three partners run the firm. At any one time there may be six to eight people working on jobs. Does size really matter?
They aren't all things to all people. Paris, who has been working at it since 1983, says that they concentrate on helping companies with operational strategy—engineering, manufacturing and distribution issues. It may be that there is a business strategy that's created by someone else. Or another consultancy, one with the Big Picture view. "This is classic Wickham Skinner. ‘What market do you want to compete in?' Then we develop the operations strategy to supportthe business strategy," he observes.
"A lot of our recent business has been based on issues of physical resources." As in: How many plants do you need to do the job? Where should they be located? What about suppliers? How big? Where? "We've developed a series of templates for Lotus and Excel spreadsheets that allow us to go into a company and quickly provide a multitude of alternatives."
Speed and efficiency (and comparative economy) are some of the apparent hallmarks of MPA. Paris and his colleagues are all alums of A.T. Kearney, so they know how the bigger firms work. Theirs is (obviously) smaller. And different. (One suspects that they can get moving on a project while the other guys are still assembling a team.)
The clients that they tend to work with are tier-one and tier-two suppliers. He admits that they haven't worked for any OEMs. "They'd think we're too small," he says. Generally, the companies are over $100-million and less than $1.5-billion in size.
One area that they haven't done a whole lot of work in is that of supply chain. Why? Well, Paris admits that without having offices in places like Malaysia and Taipei, effectively working the supply chain is somewhat difficult. He does acknowledge that they are talking with a French consultancy that does have operations in such places, so perhaps there may be a change on the horizon.
In terms of methodology, Paris says that it depends largely on the conditions of the company with which they are working. "We use the Toyota Production System and a number of other things," he says. "One of our arguments against"—and here he names a brand name consultancy (and not A.T. Kearney)—"is that they have a solution looking for a problem. We listen to what the client is trying to do with the business. Then we take several problem solution elements and apply that."
Paris notes, for example, that Eli Goldratt, father of the Theory of Constraints (TOC), asks him why they just don't use that method all of the time. Paris points out that TOC is particularly useful when companies want to get better from where they are, but "some companies need a quantum change." Different strokes for different folks.
Paris says if there is one thing that they do adhere to, it is the idea that if you pick a part up, you should do something with it before you put it down. Or don't pick it up. They look at flow. They look at time. They, well, look at what's involved in operations. In getting stuff done. In making things.
One thing that they have learned is that although there may be a technically elegant solution to a company's problem, it may not work. He admits that several years ago they came up with what appeared to be brilliant. "But from an implementation standpoint, it was a disaster. We tried to bring a bunch of people who were kicking and screaming too far." Now they ask, "Can our clients absorb the change?" Being pretty is one thing. Something that works—and makes economic sense—is another thing entirely.
So far as the deliverable goes, Paris says they'll go from providing a plan (here's where you are; here's what you need to do; here's how you do it; here's what you'll look like at the midpoint; here's the endpoint; here are the financials; etc.) to doing a complete turnkey (they worked with one company for which they setup an entire factory).
When we ask, "Why are you usually called into a company?" Paris laughs, and answers, "We're not called in very often. Usually, we're calling them."
More Than Just Herding Cats: EDS-Applied Engineering Solutions
The Applied Engineering Solutions division of EDS focuses on integrating a company's information technology and engineering functions. "The increase in both the number of products with embedded technology and data-enabled factory renovations, plus the growing gap between IT and engineering, proved to us there was a need to create a single organization," says Tom Brady, vice president and division manager for EDS-AES. "That's why EDS combined its integration capability and 15 year-old engineering services group almost two years ago to create Applied Engineering Solutions.
"This gave us two things," he continues. "It provided a brand for the external marketplace, so customers and potential customers could see that we had these abilities. It also provided an internal marketplace where our people could develop their abilities and careers." Yet, despite growth in other areas, a good portion of the group's time is still spent working with suppliers to integrate their processes and procedures with those of their customers. So what does this mean?
"A Tier 1 automotive supplier asked us for help in prototyping one of their products," says Chuck Wintz, marketing director for EDS-AES. "We combined IT and simulation technologies to create an effective decision making process that allowed them to reduce the cost of prototyping their product by 80%." Not a bad return, but what can they do for OEMs?
"We did a global project in Dutton, England," says Mike Olds, the division's business development manager, "where we sent our people over to meet with the client, gather their requirements, and bring the environment back to us. At the testing phase, we brought our product over to test it with them at their site, and stayed until it provided exactly what they had asked for upfront." Is that it?
Nope. The company also has jumped into testing and validation, taking non-core operations from product companies, and selling the services back. In one instance, this mutated into providing all of the software and hardware development, as well as the engineering and testing, for a biomedical company. "This allowed them to focus on creating more products that would meet the needs of their customers, without getting bogged down in the details of producing them," says Wintz.
"Our specialty is integrating technology into a business to improve functionality in order to cut costs, or streamline the process," says Olds. And he and his colleagues expect to be busy for quite some time, judging from the results of a recent survey conducted by EDS and Epic/MRA. Their survey showed that 96% of engineering managers in automotive expect their companies to have full integration of IT and engineering by 2004, which makes the convergence of IT and engineering critical to their success.
To meet these needs, EDS-AES divides its menu into four basic courses: embedded systems development, factory integration, wireless integration, and virtual engineering. A method common to each is determining how technology should be integrated both with the client's processes and the people who use it everyday.
The process usually begins by targeting the people in an organization who have been given a specific objective, like a director of engineering or a plant manager. "A lot of what we are finding," says Olds, "is that everybody wants to get wireless data in and out of their product, which creates multiple initiatives to make this happen. Because nobody has captured this market, and we have a client base that can be referenced, it has created a large ‘white space' we can play in." And that space appears to be growing.
"The interesting thing is that IT is important for the automotive supply chain, but it's not product specific," says Wintz. "And all of their ‘masters' have different IT solutions. So there is an advantage if a supplier has a very well-integrated solution. This will drive change into their processes, and transform how their people behave in that environment." Even so, it's still not the ideal situation as far as EDS-AES is concerned.
"It's true that we can herd all of those different IT cats together," says Brady, "but there is a collapse happening in the IT area as the OEMs realize that there isn't any specific value to having a unique platform. Eventually there will be one basic platform. But until that happens, there are multiple platforms out there, and multiple interfaces that need to be built and integrated."
EDS-AES employs nearly 500 engineers, and–though it doesn't report division-specific revenue figures–its parent company reported revenues of $19.2 billion in 2000.
Loads of Resources: PricewaterhouseCoopers
Ask the folks at PricewaterhouseCoopers (PwC) how long they've been in the automotive consulting business, and you will get a long pause. The company has had a dedicated automotive practice for at least 15 years, and worked with OEMs for quite some time before that. And four years ago the merger with Coopers and Lybrand took place, throwing the whole question into even greater turmoil. "It's tough to say exactly when we started consulting in automotive," says Rob Burt, head partner of the company's automotive practice.
PwC had revenues of $21.5 billion last year, and employs 2,200 "resources" (people to you and me) in its automotive group. A lot of the current activity revolves around e-market initiatives, like Covisint. "We've been spending a lot of time within the OEMs themselves implementing this type of technology," says Burt. "We have 70 e-market jobs around the world in various industries, and that competency is being shared across those industries to create the best possible solutions for each company and industry."
"Ascendant" is a toolkit of templates PwC employees use to guide them through a project. Each person is fully trained on its use before they ever meet a client, and the methodology contains elements that can be applied to each account. It covers everything from discovering what the problem is, to establishing a matrix to measure what has been done. "Unless we go to a client who has a methodology they strongly prefer," says Burt, "we follow Ascendant, and employ the pieces that apply to the situation."
Best practices are shared throughout the company, and within centers of excellence. This allows PwC to bring all of its automotive practitioners, for example, together to learn about what is happening in the industry. "They share what is going on with different projects around the world," says Burt. "The point people are there to see if we have worked with a particular client, or had similar challenges, and to learn from the experiences we have gained in our global practice."
An example of how "knowledge management" can benefit more than one client, says Burt, is the comparison of the high-tech and auto industries. "The high-tech sector hit the problems the auto industry is now facing about five to seven years ago," says Burt. "First there was the retail channel conflict, where the manufacturers moved from a reliance on retailers like Best Buy to a multiple level system. Then came the move to a configured-order model. What had been build-to-stock suddenly became build-to-order. And this has morphed into configuring the computer to the user. Some of these same trends are now hitting the automotive industry."
The driving force behind this change, says Burt, is the same as it was for the high-tech sector, the desire to move from a demand-push to a demand-pull model. "This puts much greater pressure on the relationships you have with the retail channels because the information they provide is critical to balancing production," he says. "If you don't have any idea of what's coming, you can't plan for it." And life is no fun when everyday is a surprise. In a typical OEM situation, PwC's assigned teams are large enough that its members take a very OEM-specific point of view. "We ramp-up on the capabilities of their platforms," says Burt, "then provide services around them. Conversely, the nature of the assignment from the supplier's side is to enable them to support all of the OEMs that are their customers. It is a fundamental difference, and one that has OEMs taking a self-centered view of their business, while suppliers are left to perform a balancing act to have technology in place flexible enough to handle all of the platforms."
The lifecycle of a project usually encompasses a number of services. "It includes some up-front strategy, and–depending upon the size of thestrategy–keeping a subset of the team in place throughout the entire implementation," says Burt. "We don't pigeonhole our people into a particular task, or step, along the life of the project. They are full lifecycle, from information gathering to system design, and through construction and implementation."
PwC uses its AutoFacts group to perform industry analyses and forecast future light vehicle and powertrain assembly and capacity. In addition, strategic consultants within its automotive practice study where the industry as a whole might be headed.
"We see a trend toward owning the consumer," says Burt, "owning the brand and image of the company, while moving away from actually building vehicles. This outsource model puts the power in the hands of the supply base, and moves the automaker from being an OEM to a VBO–a Vehicle Brand Owner."
Yet the "big thing" for PwC has been the e-market, especially deciding if it should be a public or private marketplace. "The answer to this question will determine the impact on the organizations that operate there," says Burt, "and that applies to both suppliers and OEMs. We have been engaged to take what had been a fairly simple procurement process and run it through into the plants, getting all of these maintenance and repair automated links to feed into these exchanges. It's pretty trick."
Trick enough, in fact, to ensure that, "on a pure revenue basis, the bulk of our business comes from actually building and implementing systems," according to Burt.