Fancier computers call for human equation. Companies arrayed with gear turn to consultants to refine best applications
When personal computer sales slumped this year, many computermakers and hardware wizards were surprised. Yet months before the slump, many American executives were sitting up late, wondering long and hard what to do with all their expensive computer gear.
One of management's best friends this year has not been a fancier personal computer, but rather a human being -- the information management consultant -- who can tell a company how best to use its proliferating number crunchers.
``The costs are there, the computers are there, but a lot of them are switched off,'' says Victor Millar, managing partner for practice at Arthur Andersen & Co., a Chicago-based accounting and consulting firm. ``Well over half our business this year involved executive-level computing, which is up significantly from five years ago.''
Despite the slump in personal computer sales, businesses in the United States this year will spend about $150 billion on computer-based equipment, says William H. Gruber, president of Research and Planning Inc., a Cambridge, Mass., consultant.
Mr. Gruber believes the huge amount of capital at stake has created enormous demand for consultants to help make the investment pay off. ``I just added seven major new clients in October and November,'' he says.
The rapid growth in numbers of employees at consulting companies is also evidence of the increased demand -- and of the impact of the personal computer. PA Consulting Services Inc., for example, a British management consulting firm, started its US operations in Princeton, N.J., in 1981 with 25 people. Today it employs 250.
The vast majority of those seeking information management consulting services simply want their computer systems to work well with other operations and to pay for themselves with boosted productivity and efficiency, says Mr. Millar.
A relatively new development, however, is that some company chief executives are seeking consultants to help hammer corporate computing into a competitive edge.
Though still just a trickle, an increasing number of companies are learning that the data they've been trapping and creating in their personal, mini, and mainframe computers can be massaged into useful information and forecasts to outmaneuver the competition.
American Hospital Supply, with its on-line terminals to customers, and American Airlines, with its reservation system, are legendary examples of companies that took the lead to harness computer information systems to beat out the competition. For many companies, however, the problem is still how to do it.
``People have suddenly realized the difference between raw data and information,'' says Steve Epner, founder of the 1,700-member Independent Computer Consultants Association and a St. Louis consultant.
``There has been an absolute explosion in information management consulting,'' Mr. Epner says. Businesses are realizing ``they have a gold mine . . . . I get more and more requests for information plans -- clients looking for a way to get their arms around this mass of data in order to compete effectively.''
Part of the reason consultants are needed is to ease the transition from an older generation of business executives to a new, computer-knowledgeable group. ``There are still an awful lot of executives uncomfortable with computers,'' Millar says. ``I think it will be another generation before we see wholesale changes.''
Still, many top business schools require graduates to understand how to use PC accounting programs such as Lotus 1-2-3 and other basic business applications.
``We are now turning out MBAs that are technologically savvy -- a brand of manager that can handle this,'' says Benjamin Mittman, professor of information management at Northwestern University's Kellogg Graduate School of Business Management. ``But in the future, I still expect consultants will be needed for planning strategic uses for information and carrying on the larger challenges'' of integrating technology into business.
Indeed, Professor Mittman believes the next big wave to hit the office workplace -- creating a network of integrated PCs and minicomputers that can exchange information -- may bring as much change as the original PC. Advances in artificial intelligence, expert systems, videodisc, and laser technology will keep consultants busy supplying industry with expertise on how to use the new volumes of information those applications produce.
A sticky problem, however, is knowing which management consultant is the right one. ``I see people paying a lot of money for not too many results,'' Epner says. Consultants' references should be checked with an eye to finding out whether projects were done on time -- and whether there was a transfer of knowledge to company personnel, or ``did they build a little empire so they're there forever and ever,'' Epner says.