Your Ultimate Competitor

Happy Friday,

There are competitors and then there's the ultimate competitor. If you don’t have your eye on the ultimate competitor, you could be valiantly fighting a battle but end up losing the war. Big chess pieces are in play. Let’s look at the board.

You plan and design public infrastructure. Who are your competitors? Other consulting firms? Sure, now. But they're not your ultimate competitor. At least not yet.

Entering the game from a different angle are professional services companies like Accenture, Deloitte, McKinsey, Boston Consulting Group, Cognizant and others. All are poised to expand further into infrastructure planning and design, either directly or through strategic partnerships and investments. They already advise agencies at a high level, and all have moved aggressively into AI, data analytics, and smart infrastructure. Menacing as they are, they’re not your ultimate competitor yet either.

AI? If you extend the trend-line a few years you can easily imagine the emergence of a digital intelligence firm upending the whole human-intelligence-by-the-hour business model, by offering, say, a desktop consulting firm. It’s too soon to panic, but definitely keep your eyes on that too.

Since your firm works in the public sector, your ultimate competitor is the agency you work for. The one mistakenly called our 'client'. Agencies neither own nor pay for infrastructure, they're administrative stewards. The public is the ultimate client. Agencies work for the public (the client), same as consultants. But with no competition to push them, most agencies have become predictably inefficient, costly middlemen (and middle women) awaiting disruption.

There's nothing agencies do for their client that a consulting firm can't do better for less.

The vast majority of agencies are small in number, serving small and medium size communities that have accrued hundreds of millions of installed infrastructure. They lack the resources and expertise to provide good stewardship. A consulting firm could be the public works department for multiple agencies simultaneously, tapping its vast resources, experience and world class expertise, and use overlapping, rotating staff to achieve tremendous economies of scale ($ savings) plus back-up resiliency. Each agency could receive more value for less.

‘But what about consultant’s crazy hourly rates!?’ HA! If you calculate the present worth of public employee retirement, salary, overhead and benefits and throw in the fact that consultants only charge for productive hours, not all hours, you’ll see the magnitude of the labor cost savings the public is currently missing out on. For every ‘whatabout’ there’s a good answer. As the unfunded cost of pensions consumes more of agency budgets, boards and councils will have to react.

Punchline: Market forces dictate that a shift to a more competitive model for infrastructure stewardship is likely, if not inevitable. Consultants are currently in the drivers seat, having an unmatched repository of infrastructure expertise. What's needed is a paradigm shift, i.e., consultants need to stop seeing the current administrators as their ultimate client, and start seeing them as the ultimate competitor or partner they are.

Have a great weekend,

Dave

Feedback and blowback are certainly welcome: dave@goodnewsfriday.com

All 80-some past topics are available at @goodnewsfriday.com

Written by me, not Chat GPT.