Conference 7.286::digital

    >Software consulting, a multi-million dollar business for DEC, has 
    >pretty much been killed.

    I assume you mean by software consulting things like what EDS and
    arthur Anderson do.

    I read somewhere while ago that DEC was a strong 4th or 5th in this 
    business behind companies such as the ones above , where do we stand 
    now? are we still hangining in there or did we drop from that position?

    /Nasser

    .0 is spot on.  My previous group (EIS) was cut in half after being
    told for two years how important services were/are.  I've seen people
    pulled off site at paying projects to be trashed.

    What I'm hearing is that we are trying to focus the services business
    into areas where we really have a competitive edge and away from those
    areas where we still have a lot to learn.  Now, with the ignorance
    about what anything costs and what kinds of expertise we actually have,
    I don't guarantee that senior management's judgement of our
    competitiveness is any good.  That's life in the wide world of
    services.
    
    fwiw,
    
    Dick

    
    re .1, this is deception. To say that you are 4th in a race of
           3,  well you get the point. Besides, even that claim is
           wishful thinking. We are turning away large numbers
           of consulting jobs because of internal confusion.
           It burns me up when I see these advts in MIS magazines.
           "Digitals world class consulting blah blah blah". I've
           been in that business for 6 years with DEC, and the
           plug has been pulled. Just ask any of the managers
           involved. It's dead.
    
    re .3, we used to have a very succesful consulting business. IN
           my office alone, we had dozens of people out on consulting
           assignments all the time.  The business is still there,
           we just dont have the staff to fill them, and when we
           do, internal fighting prevents timely delivery.
    
           It is so bad that Sales people are reluctant to sell 
           consulting. 
    
           And the brilliant idea of subcontracting the consulting
           out to external consultants is a disaster. Every consultant
           that visits tells the customer something else. Most recommend
           non-DEC equipment. Sales can't control them. DEC cant
    	   control them, and yet, because we put them in, we
           have to go in and clean up the mess.
    
           What _will_ happen is that all internal consultants will
           leave, turn independant, and then DEC will have NOTHING.
    
           the assertion that we are trying to focus on areas we know
           or have the edge is nonsense, although it is typical.
    
           we have been doing this business successfully for many 
    	   years. Now someone comes along as says 'lets focus
           on opportunities.' In many cases we have built
           long term relationships with customers to perpetuate
           our consulting business. But someone reads an article
           on consulting and thinks they can run the show.
    
           The result is what we see. Services is dead. It is no
    	   secret, but it is unspoken. The kings new clothes.
    
    I can't encourage you to throw tomatoes, but if you attend a
    speech where some brass talks about the success of the service 
    plan, please laugh out loud. 

    RE: .1 (Nasser)
    
    "Consulting" also means "bodies for hire" to do programming and
    technical work for customers on a contract basis.  DEC charges a
    LOT of money for this and makes a tidy profit.
    
    The Systems Integration consulting a la Anderson, et al, is a newer
    form of the same business and involves more comprehensive services.
    It requires somewhat softer (not as technical) skills as well as the
    techie expertise we're known for, and is the basis for some of our 
    more visible recent wins.  The Hughes contract written up in Digital 
    Toady is a good example.
    
    However, the point of .0, I think, is that the company measures the
    field's business poorly - it looks cost-effective to get rid of 
    employees doing consulting because then the field doesn't have to
    cover DEC's overhead for that person.  On paper, it is cheaper if we
    hire a 3rd party since the cost is exactly the per-hour rate with no
    add-ons.  Employees cost more, since then the field cost center must
    pay internal overhead too.  Note that the field doesn't have the power 
    to actually reduce the internal overhead charges, those are mandated.
    
    The consulting business has always been measured incorrectly - at least 
    ever since they've been measured, as far as I can determine.  If Bob
    Palmer can figure this out and change the measurement, maybe we can
    be a bit more rational in running that business.
    
    Until then, Tom Peters' adage rings true:  You get what you measure.
    If you measure profits a weird way, you'll get management that
    optimizes profits based on the weird picture.  If you want REAL profit,
    you have to measure REAL profit.
    
    The shake-up required for that to happen is remarkably complex.  Every
    system (paper, computerized, organizational) involved in the software
    consulting business will have to change substantially.  Let's hope that
    Palmer can instill the vision and desire for that change, and then hope
    that the company can do it quickly and effectively.  Until then,
    Digital will continue to mismanage a profitable piece of its business.
    
    ~K.

    Re: -.1 and .1
    
    For the record, the latest analyst rankings I've seen (from the spring)
    have moved Digital up a notch.  One of them (can't remember which) ranked 
    Digital 2nd, two or three of the ranked us 3rd, we got one or two 4ths, 
    and a 5th place.
    
    Mary 

    re: last
    
    That was in SI business.

    And guess who is hiring all these TFSO'd EIS people.....our customers!
    I agree with the basenoter......kiss consulting sales goodbye.
    
    BTW, didn't someone else enter a note saying they had to back away
    to 2 opportunities because he knew DEC could no longer deliver the
    consulting services because we has just cut the person/s who would
    have done the delivery?
    
    Karen
    

    .5:
    >"Consulting" also means "bodies for hire" to do programming and
    >technical work for customers on a contract basis.  DEC charges a
    >LOT of money for this and makes a tidy profit.
    
    Who buys this stuff from us, at the 3 or 4x rates that are discussed
    elsewhere?   Is this "Consulting" revenue just rake-off from comfortable
    US government and similar niche contracts where DoD or whoever may be too
    insecure or lazy to look for long-term suppliers, apart from the original
    hardware vendor?
    
    >The Systems Integration consulting a la Anderson, et al, is a newer
    >form of the same business and involves more comprehensive services.
    >It requires somewhat softer (not as technical) skills as well as the
    >techie expertise we're known for, and is the basis for some of our 
    >more visible recent wins.  The Hughes contract written up in Digital 
    >Today is a good example.
    
    While we may get SI wins (and need more), does this contribute much to
    our current revenue?
    
    I'm reminded of the situation where PDP-11 support revenue, which
    was apparently enough to make Digital a Fortune-100 company in its
    own right for a long time after the VAX came out, may have cushioned
    the company too long from competition in the hardware market.
    
    Is "bodies-for-hire" consulting as above, cushioning us from competition
    in the SI consulting market?   With the lack of real information about
    relevant costs and profits, how can managers or employees know?

    
    Hey!  It doesn't matter what the analysts say! We are throwing
    away LOTS of money!!
    
    It doesn't matter what people think about 'who will buy this!'
      
    
          CUSTOMERS ARE ASKING AND WE CAN'T DELIVER IT BECAUSE
    	  WE CAN"T STAFF IT.
    
    
    Customers are asking and we can't staff it. They want to pay!
    Can it be any simpler than that?
    
    Don't tell me about market surveys. We are throwing money away!!
    
    Don't tell me that we are tied to vendor specific (DEC stuff)
    either. We have long term consulting contracts in progress on
    Cisco, Wellfleet, PCs, MACs, WAN design, -- you name it. And
    we have DEC projects too.
    
    We have been doing this stuff profitably for many years.
    
    

    RE: .9's questions

>>"Consulting" also means "bodies for hire" to do programming and
>>technical work for customers on a contract basis.  DEC charges a
>>LOT of money for this and makes a tidy profit.
>
>Who buys this stuff from us, at the 3 or 4x rates that are discussed
>elsewhere?   Is this "Consulting" revenue just rake-off from comfortable
>US government and similar niche contracts where DoD or whoever may be too
>insecure or lazy to look for long-term suppliers, apart from the original
>hardware vendor?

Lots of people buy consulting from us for lots of different reasons.
Some people like knowing that the body they hire has access to the
engineers and source code for a product.  Sometimes DEC is the only 
company with a lot of expertise on the product.  We have tons of
commercial, government, etc, customers for our consulting.  Definitely
it is not rake-off business.  Even the gov't :^) knows how to hire
contractors for less - so they see added value in having DEC in the
picture.

>    While we may get SI wins (and need more), does this contribute much to
>    our current revenue?

Good question.  SI wins tend to be "long sales cycle and big dollars" but
I doubt that there's any honest-to-goodness breakout of residency-vs-SI
consulting in any of our accounting (I am ignorant, so it's just a guess.)
Of course, the REAL question to ask is "Does it contribute much to our PROFIT?"

>    Is "bodies-for-hire" consulting as above, cushioning us from competition
>    in the SI consulting market?   With the lack of real information about
>    relevant costs and profits, how can managers or employees know?

From what I've seen and heard, we are not cushioned from competition in SI
land.  I get the impression that we can win SI contracts when we've got a
good relationship with the customer already and they believe we are capable
of doing the SI work.

Regarding costs and profits, that is the crux of what is wrong with the
current measurement system in the field.  Until the sales team is measured
on profit, DEC is flying blind.  But don't get me started on that...

~K.

Ed, 

	You're right on buddy.  The old slogan used to be "You buy we hire"
Now we do exactly what you said we do.  "You buy, we call XYZ Consulting 
Company."  "But gee Mr. Customer, isn't it great doing one stop shopping with 
Digital."

	And don't let anyone kid you about SI projects.  Number 2, in
SI.  That's worth a good laugh as well.

	We're walking away from these too. (see my note 2110.11).

	Don't worry though, in a couple more months once all the indians 
are gone, the chiefs won't have anyone left to carry out their bad decisions.

Considering the stories one hears about project managers getting sales credited
to their products,  I'm led to wonder just how much advisory consulting and
small projects business is getting stuffed into the SI bucket to make things
look good...

\dave

    re: .13
    
    How much? As much as it takes, of course!
    
    :-/

    But the fact remains that we -ARE-, increasingly, delivering
    consulting and SI services to our customers. In applications which even
    a couple of years ago our customers would not have considered using
    Digital. Like manufacturing shop floor, manufacturing planning, process
    re-engineering, logistics, warehousing, engineering. We are using, in
    many cases, the expertise of digital professionals who are now part of
    services. In other cases, we have talented services people who are
    professional engineers and experts in their field. And, we are being
    told by customers that we are outperforming expectations and the
    competition.
    
    Are things perfect? Far from it. Are we still learning? You bet! Hope
    we never stop. Still have problems, but we are getting better. And, we
    are keeping within Digital the revenues which we formerly never even
    considered pursuing.

    Measuring the impact of services revenue is a difficult task.

    A lot of the revenue is tied to proprietary hardware and software for
    which Digital is basically the only competitive provider of break/fix
    services, telephone support for VMS and ALL-IN-1, etc.

    A lot of the revenue is tied to local entrepreneurs in taking risks
    of supporting non-Digital hardware or software where there is
    competitive alternatives for the customer.
    
    Actual revenue and profit by activity is, I suspect, kept a tightly
    guarded secret, or not known because of poor record keeping.

    
    	I've been with Services for many years now. It used to be a great
    place to work for me but lately it appears that the relationship of the
    SCU with the rest of the company has become less symbiotic and more
    parasitic and adversarial. Everbody seems to be in it for themselves
    these days.
    	When I was actively working in the Field we reported into a labor
    activity system called CHAMP. I left the Field (hardware services)
    when I felt that business practices were changing in directions I
    didn't like. At that time I predicted we would go through the following
    phases: CHAMP --> CHUMP --> CHIMP. It looks as though we may already be
    at the chimp stage in Services; technical prowess from our own people is
    not respected as it once was. 
    
    	Good luck in the Field; I feel hopeful there will be some positive
    changes after the transition.
                            

    
>           And the brilliant idea of subcontracting the consulting
>           out to external consultants is a disaster. Every consultant
>           that visits tells the customer something else. Most recommend
>           non-DEC equipment. Sales can't control them. DEC cant
>    	   control them, and yet, because we put them in, we
>           have to go in and clean up the mess.
 
	What on earth are they doing recommending any specific hardware or 
	software vendor, this is what companies see as being biased.

	The consulting should recommend that things that have to be done,
	the requirements that have to be met, the benefits they'll produce and 
	then companies can tender for that work, whether the work has anything 
	to do with selling boxes or not. 

	The Digital sales people will have an edge that the consultancy has 
	done well, and has proven the quality of our delivery. They can also 
	use the fact that if consulting and delivery are done by the same 
	company theres no hole for any problems/finger-pointing to fall through
	any gaps.

	If you think the consultants are activley recommending other vendors
	h'ware/s'ware, I'd haul them out PDQ.

	But don't think because Digital does the consultancy, then its Digitals
 	right to get the delivery contract.
	All business has to be worked for, and to be quality.

	Heather

    re: .-1
    
    >  ... haul them out PDQ.
    
    This is one of the major problems with Digital's current method of 
    using independent contractors.  We don't have very many managers
    trained on how to deal with contractors effectively, and we end up
    with the short end of the stick.  Some situations I've seen:
    
    Recruitment.  Somebody high up in Digital thinks that top-notch
    contractors are just hanging around waiting for Digital to come
    and "permit" them to sub-contract from Digital.  The real situation
    is that top-notch technical people are tough to find, contractor or
    not.  *And*, they cost big bucks.  But there are plenty of contractors
    out there who will quick to tell you that they are expert in whatever
    you want to here.  I've had resumes cross my desk that were inflated
    with so much hot air that they should have floated.
    
    Failure to check references/qualifications.  Digital ends up re-hiring
    contractors who get bounced from other Digital sites.  There are a few
    contractors out there who are getting rich just circulating from site
    to site.
    
    Failure to properly set goals for contractors.  We end up acting as
    simple employment agents, finding a contractor and sending them to a
    customer site with vague instructions of "do what the customer wants".
    The contractor operates under the impression that they work for the
    customer, instead of Digital, and Digital's interests are ignored.
    
    Failure to enforce contract clauses.  I've seen two situations in the
    past six months where Digital management has simply let a contractor
    slide until their term ran out, and spent additional resources to make
    up the work.
    
    Digital management seems to forget a crucial fact:  Contractors are
    on the lookout for themselves, not for Digital.  They are contracted
    to do a specific job; Digital has no loyalty to them and they have
    none towards Digital.  Managers forget this fact at their own peril.
    
    Geoff Unland in Austin

RE:                     <<< Note 2127.19 by DPDMAI::UNLAND >>>
    
�    Digital management seems to forget a crucial fact:  Contractors are
�    on the lookout for themselves, not for Digital.  They are contracted
�    to do a specific job; Digital has no loyalty to them and they have
�    none towards Digital.  Managers forget this fact at their own peril.
    
    Speaking as a contractor with close on six years inside Digital, in
    three European countries, and seven sites, I find that remark extremely
    offensive. My management chain has plenty of loyalty to me, and I
    return in kind.
    
    Laurie in Brussels, Belgium.

Re: .19

>    Digital management seems to forget a crucial fact:  Contractors are
>    on the lookout for themselves, not for Digital.  They are contracted
>    to do a specific job; Digital has no loyalty to them and they have
>    none towards Digital.                                    ^^^^^^^^^
     ^^^^^^^^^^^^^^^^^^^^

As a longterm contractor I rather resent this assertion. I, and many of my
collegues, have an intense loyalty to Digital, cultivated over a long and 
fruitful association for *both* parties. Many of the contractors I know,
and myself, could get more money elsewhere but we prefer working for Digital.
If we were purely out for ourselves, we'd be elsewhere.

Maybe this is yet another of those things that is different in the US?

Gavin

    I think the author of .19 was talking about a completely different
    situation.  I've shared his experiences.  He's talking about short term
    consulting at a customer site in a situation that really needed a DEC
    person involved.  At my current residency, a manager sent in three
    consultants in succession.  None of them performed effectively if they
    performed at all.  None of them were up to their resume.  We finally
    resolved the situation when a DEC software specialist freed up from
    another project.
    
    tom_p

    I'm afraid that the managers who don't negotiate a tough contract with
    deliverables are the same managers who can never tell an employee what
    work they want the employee to do.  In my 16+ years in Digital, 30% of
    the time, I've had managers who chickened out from trying to think
    about the work to be done and what part of it I should do.  I will be
    very happy to get into my consulting business, but I wouldn't sign a
    contract with a company that can't describe its deliverables.  Nobody
    wins at that game.
    
    Dick

RE: .19
> Contractors are on the lookout for themselves, not for Digital.  They 
> are contracted to do a specific job; Digital has no loyalty to them and 
> they have none towards Digital.

If I'm to believe what many people in this conference have advocated, how
is a contractor then any different from a "permanent" employee?  It's been 
stated many times by several noters that Digital owes us nothing more than
our last paycheck, and we in turn should look out for ourselves.

I don't agree that this is how it should be, but those who say that Digital
and its employees owe each other nothing have never been seriously challenged.

    Certainly there are no personal insults intended, but ...
    
    The business reasons of using contractors (in the US, at least) are
    clear:  procure a technical resource without committing the company
    to a long-term relationship or the indirect costs associated with a
    permanent employee.  Every contractor who walks in the door here is
    made plainly aware of the fact that, if there's no work to be done,
    there's no guarantees of further contracts.  There's no paid training,
    vacations, or pension plan.  Contractors who do professional work will
    certainly be considered when any new assignments come along, but if
    not, then so long and farewell.
    
    With permanent employees, the scenario is (theoretically) different.
    When I came to Digital ten years ago, it was not unusual for managers
    to send employees who were idled between projects to in-depth training,
    or to allow the employee to work on internal ("pet") projects for some
    period of time.  I don't recall of any case where an employee was fired
    because there wasn't something for them to do *that minute*.  Of course
    that was the old days, when DEC made investments in its employees, but
    that's another story ...  The bottom line is that, as an employee, you
    got certain intangibles from the company in return for your long-term
    committment to stay.  Loyalty was one of those intangibles.  Management
    may now devalue the loyalty factor, but amazingly, you find certain
    companies out there who have reaped great benefits from having a loyal
    and satisfied workforce.
    
    In the US, it has not usually been considered good form to hire the
    same contractor continuously over extended periods of time.  From the
    company standpoint, it usually means that the company is not only
    paying an inflated salary, but that it still ends up incurring many
    of the same indirect costs as it would a direct employee (idle time,
    retraining/ramp-up costs, etc.).  On the legal side, the IRS and the
    Labor Department take a dim view of the practice, as it allows the
    company and the contractor to avoid certain tax and labor regulations.
    And it permits management to avoid internal accountability checks in
    payroll, EEO, and other human resource areas.
    
    Do contractors make business sense?  Certainly, under the right
    conditions.  Can the system work well?  Yes.  Can it be abused?
    Yes, I see it happen all too frequently.
    
    Geoff Unland in Austin
    

      <<< Note 2127.25 by AUSTIN::UNLAND "Sic Biscuitus Disintegratum" >>>
        -< Loyalty is valuable, and it has to be earned on both sides >-

>    In the US, it has not usually been considered good form to hire the
>    same contractor continuously over extended periods of time.  From the
>    company standpoint, it usually means that the company is not only
>    paying an inflated salary, but that it still ends up incurring many
>    of the same indirect costs as it would a direct employee (idle time,
>    retraining/ramp-up costs, etc.).  On the legal side, the IRS and the
>    Labor Department take a dim view of the practice, as it allows the
>    company and the contractor to avoid certain tax and labor regulations.
>    And it permits management to avoid internal accountability checks in
>    payroll, EEO, and other human resource areas.
    
The question that I have is two-fold:

	1) How do we deal with skill sets that Digital chooses not have,
	but may be required over the long term in one or two organizations?

	2) When we recognize this issue, how do we get Digital to hire
	a person with a fairly unique long-term skill set?

    re .26
    
    I think the problem lies in determining up front what skill sets are
    required.  Given the practical difficulties we have with determining
    what skill sets we actually have on board, how would we convince
    someone that we know what we will need in the future?  It seems to me
    that we need to be shown that "skill sets" is a sufficiently well
    defined term to be used in business planning.  I'm not convinced 'cause
    I've never seen it happen.
    
    Dick