Manchester hospital trusts paid 150 million to advisors

07 January 2015 Consultancy.uk

Over the past three years, hospital trusts in Greater Manchester have paid consulting firms nearly £150 million in fees to manage transformation and outsourcing programmes.

Data gathered from freedom of information requests reveals that the more than 80 hospital trusts in the Greater Manchester region have on a large scale hired external consultants to support them with transformation programmes, across a range of areas, from strategy, to organisation, finance and IT. Although not all data has been uncovered, what is known is that the Big Four have been paid at least £109.3 million over the past three years, while Capita has raked in at least £34.9 million over the same timeframe. The true height of spending in practice though likely to be higher.

In the case of six hospital trusts* accurate data has been released, a sample which represents less than 10% of the total known spending. For these six institutions, Consultancy.uk assessed the spending on five firms: Capita, Deloitte, EY, PwC and KPMG. The analysis reveals that the Tameside Hospital NHS Foundation Trust and the Salford Royal NHS Foundation Trust spent the most on the five firms, of which the former spent three-quarters on PwC and the latter half on Capita. The Central Manchester University Hospitals Trust ranks third with £1.8 million and the University Hospital Of South Manchester NHS Foundation Trust fourth with £1.5 million.

Fees paid by six trusts to five consulting firms

At the recipient end, Capita and KPMG were the largest fee earners. Deloitte and EY earned just over £1.2 million, a bit more than half the fees charged by Capita. In total, the five consultancies were paid £8.7 million: the Big Four invoicing £6.6 million, Capita charging £2.1 million.

NHS
Greater Manchester is by no means the only region where healthcare trusts spend millions seeking the advice and support from consulting firms. In a recent story Consultancy.uk reported about the external consulting spending of the NHS, which amounted to £640 million last year, up from £313 million in 2010. According to insiders within the NHS, professional services firms are profiteering from the uncertainty and chaos associated from a large scale and forced top down process. At the other side of the spectrum, spokespersons for the consulting industry, such as the MCA and PR-officers of firms, highlight the value added provided by advisors. 

* Central Manchester University Hospitals Trust, Salford Royal NHS Foundation Trust, Stockport NHS Foundation Trust, Tameside Hospital NHS Foundation Trust, University Hospital Of South Manchester NHS Foundation Trust, Wrightington Wigan and Leigh NHS Foundation Trust.

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Accenture's push into the creative sector is an identity crisis

18 April 2019 Consultancy.uk

In its latest push into the creative sector, Accenture Interactive acquired New York and London-based ad agency Droga5 earlier this month, adding illustrious clients such as HBO, Amazon and The New York Times to its roster of clients. With the latest in a long line of similar purchases, Accenture Interactive further demonstrated its ambition of becoming the globe’s leading trusted advisor to chief marketing officers. Yet according to Ben Langdon, Chairman of Class35, Accenture’s strategy may be heading in the wrong direction.

A press release on Accenture’s website announcing the acquisition sits next to a quote stating that “brands aren’t built through advertising” – a huge contradiction from a consultancy firm hell-bent on becoming the ‘CMO agency of choice’. It’s not alone of course. The entire consulting industry wants a piece of the creative pie right now. In addition to Accenture Interactive, recent acquisitions by PwC Digital, IBM iX, and Deloitte Digital meant that in 2017, for the first time ever, four of the world’s ten largest creative agencies were consultancies.

So just what it is that Accenture wants to achieve from this? For one thing, it’s clearly trying to be a digital transformation business. A one-stop creative shop rivalling more traditional models, it wants to lure CMOs in with the promise of lower ad spend and a “more impactful customer experience”. At the same time, though, it’s still in thrall to those same slinky, shiny branding and advertising agencies it’s attempting to disrupt. The Droga5 acquisition and that of Karmarama a few years before are both testament to this.

There’s a fundamental problem with this, though. Digital transformation businesses don’t sell to CMOs. These people have enough on their plates trying to transform their own marketing skills in order to keep up with an ever-changing market – they just don’t have the time or the energy to concern themselves with digitally transforming a whole business. If Accenture’s purpose is digital transformation, then going after creative agencies is barking up the wrong tree.Is Accenture's push into the creative sector an identity crisis?

Worlds apart

Perhaps more importantly, these two industries are worlds apart in terms of the way they think. Creative agencies are all about ideas, campaigns and consumers. Digital businesses, on the other hand, are customer-driven – they think in terms such as lifetime value, measurement, and efficiency. Customer-led thinking is an entirely different beast to consumer-led thinking.

The reality is that the arrival of digital and an all-encompassing obsession with technology, measurement and social has led to the death of agencies in a reductive, zero-sum, efficiency-focused battle with brands. Indeed, agencies have become so obsessed with the latest tech fads, they’re beginning to forget how brands work. Worse still, they’re beginning to forget how brands are built. And, by forgetting, they’re destroying their own values.

Killing creativity

All things considered, it really feels to me as though Accenture is a chip leader in a game it doesn’t understand. Expensive acquisitions like these show that they’ve got the big money, but they don’t appear to have any idea what they’re doing with it. Take talent, for example. The best talent in the creative industry right now is out in the market; it’s not tied to any one agency. Both agencies might well be at the top of their game, but why would a consulting firm waste so much money on buying them when they could hire high-quality creative talent on a contingent basis instead?

As their presence in the top 10 creative agencies shows, there is a growing trend in which Accenture, like many of the other big players, are buying up agencies as if they were nothing more than keywords. What they’re really buying, though, is a collection of credentials, clients and IP. Unfortunately, the talent that created those credentials aren’t going to stay at the business, the clients that hired the agency in the first place won’t be interested in buying what is basically just another part of Accenture, and the IP never really existed to begin with.

Droga5, for example, was one of the few agencies that did great brand work the old-fashioned way – undoubtedly something that made it attractive to Accenture in the first place. The irony, though, is that by leading it further away from the way of working that made it so special, the consulting giant will kill its creativity.

“Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record…. But, in flashing its cash, it is spending millions on acquiring nothing of any value.”

If pressed, the recently acquired agency staff at Accenture will tell you just how dysfunctional the new arrangement is. They’re largely unfulfilled. Rarely do they feel their work has any sort of meaning or purpose. What’s more, the different disciplines have found little or no common ground, and find it hard to work together as a cohesive whole. It’s not surprising, then, to see talented people leaving in droves.

Beyond the window dressing 

It’s clear, then, that consulting firms and creative agencies are no easy bedfellows. But in his company’s defence, Accenture Interactive’s Senior Managing Director for North America, Glen Hartman, described its culture as being “far, far away from what a stereotypical consulting firm would look like. Our office and studios look a lot like Droga5’s.”

In demonstrating a belief that office design equates to workplace culture, this statement serves as an illustration of how confused Accenture is right now. It wants to justify its new strategy so badly, it’s started dressing like a creative agency. But if you look beyond the window dressing and see that you and your partners are speaking a different language with a different purpose, selling to different people in a different market, there’s no getting away from the fact that you’re different.

Accenture Interactive has been dazzled by its ambitions to become the CMO agency of record, and it wants to dazzle others with its new direction. But, in flashing its cash, it is spending millions on acquiring nothing of any value.

Related: Space between consulting firms and creative agencies is converging.