Blue Chip Outfits: Clumsy Cheaters?

March 1, 2022

I read that one of the big blue chip accounting / consulting firms revealed the jib of its ethical sails. The information appears in “PwC Fined Over Exam Cheating Involving 1,100 of Its Auditors.” [You will have to pay to read this interesting “real” news report.] I learned from the odd orange newspaper:

PwC Canada has been fined more than $900,000 by Canadian and US  accounting regulators over exam cheating involving 1,100 of its auditors. The watchdogs found that the Big Four firm failed to spot that staff were sharing answers in exams between 2016 and 2020 because of shortcomings in its internal standards and test supervision.

What does this suggest about the notion of “quality,” “oversight,” and “integrity” when these words are applied to a blue chip outfit like PwC? PwC says on its About Us page:

Our values define the expectations we have for working with each other and our clients. Although we come from different backgrounds and cultures across the firm, our values are what we have in common. They capture our shared aspirations and expectations, and guide how we make decisions and treat others—they’re what makes us, us.

Does this mean this is the logic used at PwC: We cheat and obviously are likely to perform just about any action because of “shortcomings” in standards? Is the logic, “Well, McKinsey did the opioid work, so we help 1,100 whiz kids ace an examination.” Is this the lesser of two possible inappropriate blue chip thought processes?

Keep in mind that when PwC “discovered” the cheating, the company “immediately opened an internal investigation.” So it is now 2022 and the question, “How long has PwC been cheating?” remains unanswered.

Stephen E Arnold, March 1, 2022

Stephen E Arnold,

Blue Chip Firm May Have Put Its Finger on the Roulette Wheel

February 18, 2022

The Financial Times, protecting the orange newspaper’s content with a paywall, published an interesting item about McKinsey & Company. The outfit is allegedly the big dog of consulting firms. Its super sharp consultants, however, engineered the firm into a corner, if the orange newspaper’s report is accurate.

US Appeals Court Reinstates Racketeering Claim Against McKinsey” recounts an allegation made by Jay Alix, whose AlixPartners competes with the Blue Chip Big Dog. The article works in references to McKinsey’s advice to purveyors of opioid variants, but McKinsey was betting on bankruptcies to generate revenue.

The Alix matter,

alleged that McKinsey violated the Racketeer Influenced and Corrupt Organizations (Rico) Act, accusing the firm of filing misleading disclosure statements to the bankruptcy court in order to secure consulting appointments worth tens of millions of dollars. AlixPartners lost business as a result, he alleged.

McKinsey, acting in the optimal precepts of agile management, has ousted its managing partner. Kevin Sneader uttered a pithy truism in 2018:

Sorry.

Does this story have legs? Not for those outside the rarified atmosphere of the Blue Chip consulting firms. PR mastery? Money can’t buy love, but it can buy some things. Compare the news coverage of Facebook’s quarterly zuck up or the NSO Group’s software. McKinsey, which may be a far more impactful series of actions, is not of much interest. That’s too bad. Ethical compasses have to be manufactured somewhere.

McKinsey asserts that Alix’s allegations are untrue. Okay.

Stephen E Arnold, February 18, 2022

Want to Be a Consultant? No Problemo

December 2, 2021

Everyone claims to be an expert in a topic these days. People advertise themselves as experts in order to garner a clients, jobs, and a positive reputation. ReadWrite explores how the term “expert” has lost its meaning in: “Expertise Is Dead: How To Stand Out When Everyone’s An Expert.”

Claiming to be an expert is about marketing strategy. It is similar to how Google searches rank higher quality content ahead of lesser content. People need to post quality on top of quality to reach the top of searches. One way to do that is to claim to be an expert. After all, we prefer experts compared to novices. Not everyone can actually be an expert, so it diminishes the meaning of “expert.” It also creates an echo chamber:

“The nature of the internet incentivizes echo chambers and misinformation. The internet contains practically unlimited access to information and connective potential with everyone in the developed world. While this can be a tremendous strength, it also leads people to develop their own echo chambers – and makes it easy to find misinformation. Whatever your opinion is, you’re only one quick search away from finding a so-called “expert” who agrees with you, and a full community of people (along with intelligent bots) who will regurgitate your own opinions back to you.”

With everyone on jumping on the expert track, there are still ways to be noticed and be on top of the pile. To do that it is best to understand your competition, focus on your niche expertise, show and do not tell how you are great, and have the proof I the pudding.

This is great advice! It is nothing new however, because it has been repackaged and sold in job advancement books for decades. It still works, though.

Whitney Grace, December 2, 2021

Blue Chip McKinsey Stomped, Criticized, and Misunderstood by Silicon Valley Experts

November 29, 2021

I remember the good, old days. Books like “Other People’s Business: A Primer on Management Consultants” and the interesting newsletter “Consultants News.” The big dogs were McKinsey, Bain, BCG, Booz, Allen & Hamilton, and maybe SRI and Kearney. The world was ordered, secretive, elite, and lucrative. What has happened since the 1970s?

Well, discount consulting has boomed. The sector has many manifestations from the Colemans to the GLG Group, from online dog psychologists to 24×7 psycho-business experts. Because there are no government agencies paying attention to consultants, the sector remains wonderfully unregulated. Anyone can become a consultant. LinkedIn promotions are either free or low cost. Search systems like Google make it possible for anyone to know anything with a single search. Don’t believe me? Just think about how much you know as long as you have a smartphone and an Internet connection.

Enter the new breed of real news. What’s this sort of news like? The easiest way to answer the question is to check out “McKinsey Taught Big Pharma How to Price Gouge.” The “key words” in the article’s url provide some insight into the mindset of this approach to information. Forget the history when the blue chip consultants were untouchable. Forget the overt words in the title. Here’s the lingo of the url:

strikesgiving/#cool-story-pharma-bro

The agenda is a bit more clear because Big Pharma may be a “pharma bro”, or Big Pharma could be McKinsey consultants.

I think there are four points which the article and the alleged actions of McKinsey illustrate:

  1. The idea that firms and individuals conduct themselves in an ethical and appropriate manner when discussing business methods has evolved. Now it is anything goes. Blue chip, overpaid blue chip consultant? Now we have you? Journalistic methods which are more than links? Hey, this recycled information is gold, and it’s solid information gold, right? Both “sides” are guilty.
  2. Blue chip consultants do work for hire. That means that if a client pays and agrees to a proposal, the bright employees will figure out angles. Clever is not confined to the virtual cubes and imaginary Foosball games of Big Tech employees. Clever is king today. In the 1970s, as I recall my experiences at the Boozer, societal norms, common sense, and decorum were important. Today, maybe not so much.
  3. Certain types of information — like confidential client reports and internal memoranda — were tough to get. Today one can download several hundred hot new open source intelligence links and have a go at finding sensitive information. Finding factual dirt is wonderfully easy today. Ease facilitates clever and greases the skids for what I call Silicon Valley journalism or “real” journalism as I term it.
  4. There is a great deal of glee. Now the glee is public and broadcast, pushed, and discovered quickly and possibly globally if one knows where to look. The glee, however, is not the wry observations of a William Penn Adair Rogers; it’s the jokes of a high school science club member who knows how to get a laugh from the people who count in a comparatively small, hermetically sealed room.

Did McKinsey do a bad thing? I don’t know. Smart people do “smart.” Less smart people, who do not understand the context of work in a blue chip consulting firm, may not understand why projects evolve a certain way. That’s what happens when universities foul up in cultivating ethical and socially appropriate behavior. Who believes a professor at MIT who talks about ethics when the institution itself was Jeffrey Epstein’s best bud for years?

Did the “real” journalist do a bad thing? I am not sure. Recycling links and suggesting via a misleading title and a skewed url that there is an agenda at work lights up my suspicion radar. Can “real” Silicon Valley reporting take down McKinsey? I doubt it. But, who knows, maybe some day.

To sum up, it is a very, very short step from McKinsey to another high paying job. And it is almost stupid easy for a “real” Silicon Valley journalist to proclaim oneself an expert, hang out a shingle, and collect money solving problems.

What’s different is that we have one nickel and it has two sides. Both are on display in this write up about Big Pharma, bros, agendas, and incentives.

Stephen E Arnold, November 29, 2021

Enterprise Search: What Is Missing from This List

August 31, 2021

I got a wild and wooly announcement from something called The Market Gossip. The message was that a new report about enterprise search has been published. I never heard of the outfit (Orbis Research) in Dallas.

Take a look at this list of vendors covered in this global predictive report:

image

Notice anything interesting? I do. First, Elastic (commercial and open source) is not in the list. Second, the Algolia system (a distant cousin of Dassault Exalead) is not mentioned. Weird, because the company got another infusion of cash.) Three, the name of LucidWorks (an open source search recycler) is misspelled. Fourth, the inclusion of MarkLogic is odd because the company offers an XML data management system. Sure, one can create a search solution but that’s like building a  real Darth Vader out of Lego blocks. Interesting but of limited utility. Fifth, the inclusion of SAP. Does the German outfit still pitch the long-in-the-tooth TREX system? Sixth, Microsoft offers many search systems. Which, I wonder, is the one explored?

Net net: Quite a thorough research report. Too bad it is tangential to where search and retrieval in the enterprise is going. If the report were generated by artificial intelligence, the algorithm should be tweaked. If humans cooked up this confection, I am not sure what to suggest. Maybe starting over?

Stephen E Arnold, August 30, 2021

Yes, IBM Watson in Zoom Type Sessions

August 23, 2021

Zoom type meetings are not my fave. Your mileage may vary, but I miss the whole travel to meeting, small talk over crappy snacks, and watching the humanoids in action or inaction as the case may be.

I read “3 Smart Video Collaboration Features We Still Need.” The royal “we” is a nice touch for a consultant to IBM. The write up suggests that IBM Watson can tag along and monitor Zoom type meetings. When the hapless group of disinterested Zoom type participants needs “strategy” or “policy” information, good, old Watson will provide that input.

Here’s a comment from the write up:

There’s even something like IBM’s Watson Assistant, which could answer policy and strategy questions during a meeting. (Disclosure: IBM is a client of the author.) Many times, questions aren’t answered by the most knowledgeable person at the table, but by either the most obnoxious or most senior leader. Watson could steer the conversation toward the best outcome. We are on the cusp of taking collaboration systems much farther than they have ever gone. It’s time to turn them into the productivity engines they can be.

I like the disclosure at the end of the write up. Plus, the expert concludes with his strongest marketing pitch. The notion that staring at a camera and monitor will become a productivity engine is amusing. Sci fi fans will love the suggestion.

Oh, wait! Facebook has announced its next big thing. Slap on the virtual reality hood and have an almost real meeting. Stir in some Watson and we will have a winner.

A few observations:

  • Smart software can demonstrate bias and incorrect outputs; providing high value strategy and policy outputs not so much
  • IBM Watson is, as far as I know, the only smart software to fail in the cancer and Covid amelioration trial runs. Isn’t that zero for two?
  • Zoom type interactions have not slowed some companies in their attempt to get employees back into a setting in which those very same humanoids can be monitored, involved in meetings, and pulled into a conversation without the all-to-common “I can’t connect.”

Content marketing is interesting. Unfortunately it is too easy to spot the messaging. No Watson needed because that smart software struggles to deliver more than opportunities for cheerleading for an ageing amalgam of open source, home brew code, and acquired technology.

And the other features? A smart moderator for Zoom type meetings? Err. What? A mom? An Adam Carolla? Plus, another Zoom type meeting at the same time? Yikes. Gee whiz, Computerworld.

Stephen E Arnold, August 23, 2021

Gartner: Does Analysis Register?

July 23, 2021

I read “Where on Gartner’s Hype Cycle is Gartner’s Hype Cycle?” This is a very insightful write up which raises some interesting issues about misinformation, disinformation, and fact reformation. The principal interrogatory pivots on the phrase “hype cycle.” If you are not familiar with “hype cycle”, it is a curve that looks like this:

hype smaller

The curve with labels on the x and y axis looks like this from the Matplotlib here just without numbers. Do mid tier consulting firms generating billions each year need numbers? Obviously not.

hype mathlab image

What is the “information payload” of a Garter hype cycle I found from the Yandex Web index:

hype cycle 2020 600 pixels

Notice the x axis is time and the y axis is the subjective “expectations.” Is this consulting “science”? I do like the tag “SmarterWithGartner.” More examples of the Gartner content can be found at  this link to the Yandex image search service.

What does the Register’s opinion column address? Please, read the original. I have identified three points which I found interesting; your mileage may vary, particularly if you are one of the Gartner confederation of whiz bang experts.

Gartner’s business positioning

I quote from the characterization of an information company and consulting services firm:

Gartner is an odd fish.

Validity of the information in the hype cycle

I quote from a passage referencing hype cycles for a five year period:

if search engines or ARM chips or OLEDs are in there anywhere, I missed them. Whatever happened to that Google thing, anyway?

Expertise

I quote from what is a discussion of self-referential marketing and feedback sales:

Gartner absorbs the reportage and opinion about how well corporate portals are doing this year, slaps them in or not, and the result gets reported in the press with more or less reaction. Which is duly noted, and fed back into the next time, all the while carrying the name of Gartner through the media with a strong whiff of broad, deep tech mastery.

Accuracy

I quote from the value of the information arrayed in a hype cycle graph without “numbers” or apparent verifiable data:

Gartner would do well to appoint a proper historian, and perhaps a proper ethicist, in recognition of some of the truths about itself that never appear in a PowerPoint deck. The world is ready for a bit less flannel.

My take is that numbers are helpful. Also, I hope the Register take a look at the number free Gartner Magic Quadrant; for instance, the apparently subject examples at this link on Yandex.

I think that the word “flannel” means:

Collins’ Dictionary of Slang says that the noun “flannel” has been used to mean “rubbish, albeit plausible rubbish” since the 1920s, and the verb “to flannel” has meant “to talk nonsense in a soothing, plausible manner, esp for the purposes of charming a woman one wishes to seduce” since the 1940s.

Has Gartner been called out? PT Barnum allegedly said, “I don’t care what people say about me as long as they say something.”

A perfect complement to self-referential information marketing? Smarter with Gartner is a compelling coda.

Stephen E Arnold, July 23, 2021

MIT Report about Deloitte Omits One Useful Item of Information

February 1, 2021

This is not big deal. Big government software project does not work. Yo, anyone remember DCGS, the Obama era health site, the reinvigoration of the IRS systems, et al? Guess not. The outfit which accepted money from Mr. Epstein and is now explaining how a faculty member could possibly be ensnared in an international intellectual incident is now putting Deloitte in its place.

Yeah, okay. A blue chip outfit takes a job and – surprise – the software does not work. Who is the bad actor? The group which wrote the statement of work, the COTR, the assorted government and Deloitte professionals trying to make government software super duper? Why not toss in the 18F, the Googler involved in government digitization, and the nifty oversight board for the CDC itself?

The write up “What Went Wrong with America’s $44 Million Vaccine Data System?” analyzes this all-too-common standard operating result from big technology projects. I noted:

So early in the pandemic, the CDC outlined the need for a system that could handle a mass vaccination campaign, once shots were approved. It wanted to streamline the whole thing: sign-ups, scheduling, inventory tracking, and immunization reporting. In May, it gave the task to consulting company Deloitte, a huge federal contractor, with a $16 million no-bid contract to manage “Covid-19 vaccine distribution and administration tracking.” In December, Deloitte snagged another $28 million for the project, again with no competition. The contract specifies that the award could go as high as $32 million, leaving taxpayers with a bill between $44 and $48 million. Why was Deloitte awarded the project on a no-bid basis? The contracts claim the company was the only “responsible source” to build the tool.

Yep, the fault was the procurement process. That’s a surprise?

The MIT write up relishes its insights about government procurement; for example:

“Nobody wants to hear about it, because it sounds really complicated and boring, but the more you unpeel the onion of why all government systems suck, the more you realize it’s the procurement process,” says Hana Schank, the director of strategy for public-interest technology at the think tank New America.  The explanation for how Deloitte could be the only approved source for a product like VAMS, despite having no direct experience in the field, comes down to onerous federal contracting requirements, Schank says. They often require a company to have a long history of federal contracts, which blocks smaller or newer companies that might be a better fit for the task.

And the fix? None offered. That’s helpful.

There is one item of information missing from the write up; specifically the answer to this question:

How many graduates of MIT worked on this project?

My hunch is that the culprit begins with the education and expertise of the individuals involved. The US government procurement process is a challenge, but aren’t institutions training the people in consulting firms and working government agencies supposed to recognize a problem and provide an education to remediate the issue. Sure, it takes time, but government procurement has been a tangle for decades, yet outfits like MIT are eager to ignore the responsibility they have to turn out graduates who solve problems, not create them.

Now about that Epstein and Chinese alleged double dipping thing? Oh, right. Not our job?

Consistent, just like government procurement processes it seems to me.

Stephen E Arnold, February 1, 2021

CFOs and Their Digital Competencies: Ah, Ha, Forget Taxes and Demonstrating Revenue Growth

January 26, 2021

No joke. The title of this write up is serious, or as serious as mid tier consulting firms’ experts can be. “Gartner Details the Five Digital Competencies CFOs Must Wield in 2021” does not mention Excel. I assume that CFOs are pretty good at that software. After all, one cannot catch spreadsheet fever and generate charts showing exponential revenue growth without the child of the long-dead VisiCalc.

What are these digital competencies? In order to avoid allegations that I am carjacking these ideas, I shall mention three and direct you to the original article in CFO Tech. Here we go:

CFOs have to be technologically literate. That’s a noble goal. I am confident that quantum computing cooling technologies, the spectrum result from vector computations, and security technology employed by SolarWinds-type companies are directly germane to the CFO job. But it seems to be a safe generalization, particularly to thumb typing MBAs fresh from their second failed start up.

Digital learning is another gem. I wonder how many CFOs are paying for their kids’ college education which now includes sitting in a dorm or the family basement watching Zoom. How is that for value. With meet and greet conferences struggling in the time of Covid, how else will a CFO learn. Zoom, reading books by Ivy League economists, or talking with their friends in the financial sector? I go with Zoom. So digital learning. Yeah, revelation.

The final digital competency I will highlight is a wonderful consulting jargon word weirdness thing: Digital ambition. No, I don’t know what that means. That’s why one hires consultants from mid tier consulting firms.

For the other digital competencies check out the original write up. There is one which is not part of the Google management play book and one that converts a numbers person into a performer at a TED conference.

Just don’t forget to show revenue growth and cost suppression. That applies to both CFOs and mid tier consultants. Yeah, digital ambition.

Stephen E Arnold, January 26, 2021

KPMG: Ignoring the HR Block Case Example or That Will Not Happen at the Exceptional KPMG

January 19, 2021

Here’s a fact of life at allegedly blue chip consulting and service firms. Miss those billability goal, and you are invited to find your future elsewhere.

I read “KPMG’s Marisa Ferrara Boston embraces Auditing Disruption with Watson.” My immediate reaction was id the capable, dutiful Marisa Ferrara Boston overlook this article in Beyond Search: “Watson and Block: Tax Preparation and Watson.” Probably. Business analysis from rural Kentucky is not on the KPMG list of suggested readings.

The point of my write up was in early 2017:

The idea is that H&R Block paid cash money to IBM to integrate Watson into the H&R Block proprietary tax preparation system.

The problem, based on information available to me, the Block Watson service added complexity to the tax workflow.

Oh, oh.

Here’s what KPMG has in mind:

KPMG has partnered with IBM to integrate Watson Discovery and Watson Machine Learning into the auditing workflow. KPMG uses Watson as a backbone to a question-answering pipeline for auditors and risk analysts, enabling KPMG audit professionals to better review, classify, and search across documents to extract important attribute values.

Interesting idea. Replace billable humans with super smart, reliable, fast IBM software.

What could go wrong?

If the Block IBM deal went nowhere, the resistance came from the tax professionals the system was supposed to help. Block and IBM parted company.

At KPMG, the litmus test will be billability. Unless the smart software generates more billable hours (regardless of how the bean counters fiddle the calculations), the KPMG IBM deal is likely to be found wanting. Nothing creates more waves in a blue chip professional services firm than a partner responsible for a number who misses his/her bonus. Nothing.

This quote from the IBM blog misses the point for a big time consulting firm. IBM writes:

“I feel really lucky to be able to be in a position where I’m still in the fight to be able to help push these things along,” says Marisa. But deployment is only half the battle. When it comes to maintaining innovation in automation over time, “it’s never over,” she says. “These AIs are living. They need to be nurtured in an appropriate environment. They’re not just something that you create and consider the job to be done. If so, you have failed, and probably in a very expensive way.”

Notice that employee revenue is not mentioned. Cost control is not mentioned. The partner bonuses are not mentioned. The ire of an unhappy KPMG client who is “surprised” is not mentioned. What about the managing partner who learns that a baby Enron or Autonomy has been birthed by the energetic Watson? Exciting? Yep. Very.

Perhaps some KPMG wizards who will find themselves working at HR Block will be able to ask their new colleagues, “What did you think of that IBM Watson integration?”

Stephen E Arnold, January 19, 2021

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