Don’t gripe, celebrate it! Huge companies getting conned by large consulting firms creates opportunities for startups. If Deloitte and others were actually good at what they do, it’s be much harder to compete. Large companies blowing a hole in their budget so that Deloitte can deliver a garbage product 6 months after the deadline is the kind of thing you want to hear if you’re involved in startups.
Startups have no chance with these clients. It's all about deep industry/government connections and kickbacks. It will be Adobe AEM consultants billing 300$/hour and not GatsbyJS ninjas.
Everyone assumes its about connections and kickbacks, but its actually more to do with procurement policies.
The people who sign off on large contracts need to be able to demonstrate due dilligence, because if they don't then when something goes wrong they will be blamed for hiring cowboys instead of professionals. But this merely creates a series of hoops through which the candidate contractors must jump. Ultimately the process of getting these contracts becomes so cumbersome, expensive and risky that only a few large companies do it. They naturally become experts at hoop-jumping, often to the detriment of actually doing the work.
I once saw the bid evaluation criteria for a large company I worked at. Over half the scoring points could be summed up as "one of the usual suspects" (e.g. big company, has track record in industry, has staff with industry experience, has done similar work in the past). If you weren't one of the usual suspects you had no chance of getting the job.
Absolutely correct. Saw it on the Gov't/Defense side of the house and in the civilian Enterprise sector.
To be blunt, the reason big firms get the contract is because we know where they live, we know they'll deliver something, even if it's utter dogshit, and we know they won't go out of business in 3 years, so if we need to support the build -- or just sue them -- then we know where to find them 36 months from now. The Big 4 may only bat .500 but I can bet against ~50%.
There is also a selection bias: no one has heard of the small-fry shops that fuck up, and when they do they can quietly re-brand, disappear, or dissolve. Anyone here ever get burned by YellowOps? Probably not. But everyone here has heard of KPMG...
> (e.g. big company, has track record in industry, has staff with industry experience, has done similar work in the past)
That's the classic CYA, or the "nobody gets fired for buying IBM" adage. I've dealt with procurements for eye watering amounts both in the private and public sector. But no matter how much you struggle to get the good product eventually some hard requirements (either legal or institutional) will be shoved down your throat and you end up with the Accentures of the world.
They must have comparable revenue to the customer. They must have had similar projects going at least 10 years back. They must be able to deliver the service 24/7 in any corner of the world even if we only have one office. You can't say anything about past performance in projects even if it's objectively measurable because it would put one competitor at a disadvantage. So what if Accenture blew the budget by an order of magnitude and delivered a year+ late on every single project they had with you, that's the past, we're starting with a clean slate every time.
Then the contractual conditions can't be harsh enough that even Accenture says "not for us" because that all but guarantees that you have no bidders.
So now every startup is out the window and all you're left are the big ones. And when the project bombs - and bomb it will one way or another, Accenture will guarantee that because they make money by underbidding and then overcharging you through your nose for CRs and fixing what they failed to deliver under one contractual loophole or another - the people in charge from the customer side always have good cover. They picked the best offer. Nobody could have done it better.
This goes hand in hand with Gartner recommendations, the company that came to me with 2 conflicting reports and let me choose which one I want to present to management depending on what version I wanted to push. I laughed them out the door and when going face to face with the higher ups the first thing that came up was "what does Gartner say?". Try answering "anything I want"... They need plausible deniability so you're there to plausibly shield them from the reality of this farce. So you call Gartner back and ask for that report "we first talked about".
Nobody gets fired for buying Accenture (or the likes). They'll just leave in disgust.
In other words, you could hire Accenture and pay some big cat a lot of money, or you could pay 10 startups that money and let 90% of them fail and let someone to become big again.
Mathematically yes (a la "9 women can deliver a baby in 1 month"). But in practice no because there's almost no way you can write fair requirements in a procurement that will apply to all and somehow exclude only Accenture (&co.). This is their actual power, officially they tick all the boxes and look as qualified as one can be, and they can also underbid almost any startup. Because they have far more qualified lawyers than engineers to help the make up for it later. It's only when they start work do you get the real Accenture experience: hundreds of inexperienced, unqualified, overworked, or underpaid people under the careful eye of someone who's paid to delay and overcharge under any possible interpretation of the contract.
They are better at this game than almost any startup because their game is "winning bids". They are ridiculously connected and able to operate almost exclusively in the grey area, with a lot of detours in dark as hell area. And they are always seen as the "safe choice". If Accenture fails a CEO can say "we did our best, picked the experts". When a startup fails the CEO has no plausible deniability. They went with the risky, unproven option and have to pay the price.
You can either go the fair competition route and Accenture can easily tick the boxes on paper and then win on price, or you can go for direct award (in a private company) but you'll be living at the gates of hell until the project is successfully completed.
This is true. I worked with a communications provider and we were not cheap by any means when it came to sending email/sms, and turnaround time and capability lagged behind any smaller group. The major driver from the clients was in not being blamed for picking the small company when (not if) something goes wrong, along with the usual sales and relationship building games that entrenched vendors play.
Interesting reasoning. Few days ago when there was yet another GH outage I read in a comment here that it seems that larger companies get more slack for mistakes b/c of the idea that a large company must surely provide an as solid as possible product while if a smaller company fails people come around asking "why didn't you go with [large company] instead of this [small company]?".
Also I observe it with Linux vs Windows. If you promote Linux and then something itches people are quick to express "this wouldn't have happened with Windows". While if Windows causes problems people will easily accept it as caused by higher powers.
I wonder if there is a name for this David vs Goliath syndrome.
There are plenty of opportunities in the government for small businesses, mandated by law. Learn how to team to go after contracts and look into the SBIR open topic. It isn't easy and takes patience, humbleness, and work but the payoff is long term reccuring revenue from a customer that always pays.
This isn't really true. Not only are SIBR rewards generally low, but it's very easy for contracts to be pulled out from under you via larger contracting firms and there is a ton of risk involved for the employees.
I would never ever go back to that environment after working in it for a few years. Not knowing whether or not you're going to have a job for over a month every year is not fun. Larger contracting firms can shuffle people around in those cases but for smaller ones it kills an entire team.
We are onboarding a remote team this week for a government contract working with CNCF tooling in AWS. COVID changed what is allowed. Also SBIR phase II for open topic are 750k for the next period.
That's $750k for two years, which is paltry when you consider that your average senior engineer salary is likely to be in the range of 150k+ per year because of how much the major players offer and you also don't get funding for Phase III. A small team of engineers and QA will eat up that award quickly. This is without factoring in other things your company needs to navigate the government labyrinth, healthcare and more if you aim for commercialization.
If you and your team are willing to be underpaid relative to other companies and deal with the risk that working on government contracts entails a smaller contracting company might survive for a few years.
750k for 9 months. You need to write the scope to be profitable, just like any other fixed firm contract. If you execute in a need area phase 3 should be high percentage if you build the right relationships during your phase 2.
> Don’t gripe, celebrate it! Huge companies getting conned by large consulting firms creates opportunities for startups. If Deloitte and others were actually good at what they do, it’s be much harder to compete.
Eh, no. I bet Deloitte and Accenture are actually good at what they do, but that happens to be c-suite sales and other parasitic activities. End-user pain is an untracked externality in these arrangements.
Putting the idealism aside, I also thought startups where pretty much in the opposite business to these billable hour factories.
Some of the best people I've worked with were Deloitte people. I hate this generalization of large consultancy firms. Sure, there are assholes, but a large part of the work force is really doing the best they can.
I worked for a small consultancy company (that you could call a startup) on large projects. We delivered a garbage product, after the deadline and way out of budget. Why? Because large companies are really bad at knowing what they need and sales is really bad at telling them that.
No matter how small or big the company, you will see this happening, because there are always incompetent people promising impossible things. Just look at the hundreds of startups that burn money trying to deliver on their promises and end up dying.
Corollary this comment helped me realize: the successes and failures of any environment that doesn't stick around are forgotten, thus the failures of the commodity startup industry do not disseminate nearly as widely as idle commentary/banter about poor customer service associated with a specific brand.
I once got pretty far into recruitment with Accenture, and got to speak with management pretty high up the chain.
It left me with a very curious thought, namely that there's something very rotten that infects any corporation in that business, cause it was nearly a mantra that every higher-level that was part of the interview repeated - that they need people who can tell customer "No" and keep things in reasonable scope and done right.
As if there was some managerial disease across the sales, engineering and clients that pushed towards certain bad outcomes.
Mind you, some areas actually do have such "disease" that is remarkably well studied for something so ephemeral - for example in aviation, flying around VIPs tends to quickly spiral into bad behaviour, with bad things done on basis like "we couldn't let PM be late", caused among other things by gratitude of the PM and thus crews trying to do a little extra. This required separate review and controls to keep from happening and quick negative feedback applied by safety bureau every time it happened, otherwise it would spiral out.
Like the other commenter said, it's logical. It's not a managerial disease, it's just inherent to big projects that details are never clear at the start of the project, but clients do want a clear cost projection.
What happens is that a scope is agreed upon and so is a price. If the scope increases, so should both the price and the deadline. The client never wants this to happen, because it's their money. The contractor can then do either of three things:
- Don't build the feature or remove another feature
- Make the client pay for the feature
- Lose money on the feature
Having a developer or a sales manager or whatever, that can't say no always tends to lead to the third option, which is the one that isn't desirable. Therefore, you need someone to say no, followed by 'unless...'.
The big issue with Agile (for a consulting firm) is that this is inherent to the way of work, because in Agile the end result shouldn't be clearly defined, which means endless discussions on scope. Because of this, it's even more important to have developers and project managers who can say no (unless...).
This is mostly important for project work. Many consultancy firms also do hourly work, where most of this risk is with the client anyway. Even then, however, you still need to be able to say no sometimes.
That makes sense. Scope creep is the main thing that's killing large software project. The client doesn't know what they want yet every middle manager and department is constantly requesting new features. If a software contractor wants to deliver anything within some time and budget, they have to manage the scope tightly.
The generalization is not about the employees of the large consulting firms, but about the business practices in these companies and it is quite accurate.
A 'company' can't actually do anything, only its employees can. Anything said about a company is therefore also said about their employees, since they are what forms the company and perform the actions in the name of the company.
Except, no. As a startup you are absolutely not going to get the contract to create a new unemployment web site for a government. Even aside from the bidding process that is deliberately set up to exclude small players any responsible government wouldn't go with you anyway: what happens in five years time when your startup has shut down (or complete it's Wonderful Journey with an acquisition) and the site stops working?
You could, but would require extensive involvement before the bid, making sure you understand the organization and structures (e.g. https://www.naswa.org/ and http://www.itsc.org/Pages/default.aspx ) perhaps hiring someone who worked there, plus experience in dealing with legacy tech.
The RFPs are public, and many states are willing to take a look at new approaches.
This isn’t a rhetorical question as programs like FedRamp exist to help startups have those good answers for responsible governments. While a brand new startup will not meet criteria, relatively new companies are able to meet requirements and earn business.
At the high level (ten figure contracts) startups have no chance vs Amazon and Microsoft, but there are many agencies and purchasing available to pursue.
I am not talking about startups competing for the same contracts, I am talking about startups competing with a large company in their line of business. Blockbuster couldn’t hire Accenture to create Netflix, for instance.
Consulting is really a relationship business. Typically, a strong relationship is built on the back of successful projects but not always. Just because a project fails doesn't mean the relationship is at serious risk. At the top of consulting firms you'll find that what everyone cares about is client and industry relationships.
A startup is going to have to start building that relationship from scratch where the firm with a freshly failed project may still be a decade ahead.
> Huge companies getting conned by large consulting firms creates opportunities for startups.
Huge companies can go bankrupt. I can tolerate "creative destruction".
Governments will go very far out of their way to spread the pain before they go bankrupt. The Flint, Michigan "lead in the water supply" problem was downstream of the city's (and region's) economic collapse and bankruptcy. Detroit's current residents are very much overpaying for their utilities and other city services because of their existing long-term obligations.
I would much prefer we change government to be much more iterative and create contracts which ensure quality outcomes (not optimized for "butts in seats"), even if that means there is more total cost.
Isn't that a broken window fallacy? Once the time and money has been wasted what are the actual odds the customer will just turn around and go "Let's try the same thing with someone else. It's bound to work someday!"? Most likely the opportunity is gone, and the only winner is the shoddy consultancy.
If the customer went all in on the broken first solution that would be the sunk cost fallacy, but that's not what GP said. Maybe it's not the broken window fallacy, but GP saying that terrible customer service from big consultancies creates opportunities for startups doesn't follow at all, because customers don't have infinite amounts of time and money to get a working solution.
Their continued existence developing failing government systems is indicator #1 of the criminal nature of the US Lobbying system that awards government contracts. Say what you want, it does not alter the fact that what they deliver does not fulfill the contract to the degree it is criminal theft of taxpayers' money.
My thoughts exactly when my girlfriend had to apply for benefits. The UX is awful, it’s difficult to tell where you are on the page or what you should be looking at. On and on...
