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Each is unique, whether big or small, niche or mass-market.
Downsizing. Deregulation. Open access. That ought to boost both supply and demand for utility consultants, as unemployed middle managers seek out new careers and utilities struggle to survive in a more competitive and faster-moving environment.
However, since consultants come in many colors, which is right for you and your company?
As the giants of the consulting world, this category includes firms such as McKinsey, Andersen Consulting, The Big Six consultancies, and Booze-Allen. Diversified Monoliths, as their name suggests, consult for a wide variety of industries on a global basis, including the utility industry. These companies typically have a core utility competency group of between 20 to 50 people, who are both knowledgeable and dedicated solely to the utility industry.
• They can share relevant experiences of how businesses in other industries approach the same issue.
• They have some of the best functional experts (e.g., process re-engineering, systems implementation).
• Diversification and higher fees allow these consultants to adopt a more academic and soft-sell approach.
• Since they have a diversified focus, generally, their employees below manager level are generalists. They can require a lot of training before becoming useful on a project.
• Their large overhead costs are reflected in their fees.
• They eschew small projects (i.e., less than $50,000).
• Salary plus bonus is not generally directly related to size of your project.
This group is a fast-growing breed of consultancies. Their growth is fueled by the much-anticipated chaos and uncertainty from electric restructuring, which is expected to reign for at least the next 10 years. This category includes firms such as Metzler & Associates, Rudden and Utilities International. Undiversified Mid-Caps tend to have 40 to 100 consultants who work exclusively for utility clients.
• Utilities are all these companies do. Each of their employees will have a good understanding of the industry.
• Principals and partners of these firms are likely to prove some of the strongest experts on utilities.
• A singular focus on the utility industry can make these companies myopic to new consulting tools and non-utility experiences.
• They may not have the information technology resources to implement recommendations.
• Salary plus bonus, which is generally directly related to size of your project.
Here we enter the ranks of 20-plus-year industry veterans who, with retirement just in sight, are unfortunately displaced from their mid- to senior-level utility management positions by industry restructuring. Some of these brave souls find the entrepreneurial gestalt to dust themselves off and market their knowledge and experience to the highest bidder.
Greatest Strengths (of those who survive):
• These are superstar principals. After all, their product is raw intellectual capital.
• Their cost is low.
• Their small size and niche focus often translate into limited tools.
• They have little systems expertise to implement recommendations.
• Their salary is your project.
David Anthony is a manager of energy consulting at a Diversified Monolith.
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