BDO Wins Arkansas Supreme Court Appeal to Arbitrate Fraud Allegations
Monadnock Research (Vol V, No 1) - 14 January 2012
BDO Seidman has won an appeal against Straits Steel & Wire, forcing the client's allegations of fraud to be heard by arbitrators and not the courts. The Arkansas Supreme Court decision reverses a ruling of the Sebastian County Circuit Court, which had denied a motion by BDO to compel arbitration against Straits Steel & Wire, Co. and its affiliates. The case involves tax consulting services and allegedly fraudulent tax shelters. BDO successfully argued on appeal that the circuit court erred in denying arbitration because it was the dispute resolution mechanism of choice in agreements signed by the parties. SSW attempted to get around the dispute resolution choice by claiming unconscionability of the alleged fraud. SSW claims breach of fiduciary duty, negligence and professional malpractice, negligent misrepresentation, disgorgement of excessive and illegal fees, fraudulent inducement, fraudulent concealment, fraud, civil conspiracy and breach of contract. Research Note includes Arkansas Supreme Court ruling and MR perspective on the inherent system bias of arbitration clauses in consulting agreements. (1,375 words) . . . More
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KPMG Advisory Practice Grows 2.5 Times Faster than Audit in 2011; $2 Billion Management Consulting Business Up 29%
Monadnock Research (Vol IV, No 44) - 22 Dec 2011
MR - KPMG International's advisory practices grew at 14.76% in fiscal 2011, for the period ended 30 September. That was 256.7% faster than the firm's global audit businesses grew. KPMG says its global management consulting practices had fiscal 2011 revenue growth of 29% in US dollars and 24% in local currency terms. KPMG has built its $2 billion management consulting business in just six years. Its acquisition of EquaTerra in 2011 dramatically increased the firm's outsourcing and shared services advisory practice. Revenues increased across each of KPMG's geographic regions. Asia Pacific growth was 16.6% in US dollars. Americas revenues were up 10.7%. Europe, Middle East and Africa, including India, increased by 7.7%. Much of the geographic expansion occurred in high growth markets. India was up 25% and Brazil 22% in local currency terms. Research Note includes 1 graphic and MR perspective on Big Four divestitures of advisory operations. (815 words) . . . More
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EC Formally Proposes Order Separating Big Four Audit and Consulting Operations
Monadnock Research (Vol IV, No 40) - 2 Dec 2011
MR - The European Commission (EC) has adopted proposals that, if implemented, will dramatically change the way auditors serve public interest entities (PIE), including banks, insurance companies and publicly listed companies. The proposal prohibits firms from providing non-audit services to audit clients. The rules are particularly restrictive for the Big Four, and will obligate them to separate audit activities from non-audit consulting and advisory practices to avoid potential conflicts of interest with clients. According to the EC, "Big firms represent a very large proportion of PIE audits. It is critical that such audits are conducted in an independent manner without any 'pollution' from other commercial interests." Beyond the separation of audit and advisory operations, the change establishes more stringent governance policies for auditors to strengthen their independence and introduces more competition into the highly-concentrated market for PIE audit services. Included among those additional changes are mandatory auditor rotation; transparent bid tendering; audit committee oversight; EC supervision and international coordination of the audit sector; intra-EC auditor professional practice mobility; and less "red tape" for small and mid-sized audit firms. Audit firms will support many of the proposals, but reject separation of the consulting operations as a solution. They also oppose auditor rotation, which the EC has said is fundamental to reform. Research Note includes EC audit reform proposal, impact assessment and firm responses to the proposed regulatory actions. (1,950 words) . . . More
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Lions Gate Sued for Non-Payment Under Terms of Performance-Based Consulting Agreement; Highlights Challenges Small Firms Face in Client Litigation
Monadnock Research (Vol IV, No 41) - 1 Dec 2011
MR - A small consulting firm based in Los Angeles, GBB Consulting, has sued Lions Gate Films over non-payment in a performance-based fee arrangement associated with Nicole Kidman's film, "Rabbit Hole". The suit, filed on 22 November 2011, alleges breach of contract. Kidman was nominated for an Oscar and won a Screen Actors Guild (SAG) award for her performance in the film. GBB claims it wasn't compensated for its services and role in helping to secure Kidman's award and nomination. While the claimed damages are only around $115,000, the case highlights the challenges many small firms face in working with larger organizations with significant resources in high-stakes engagements. Research Note includes a copy of the complaint and MR perspective on the consequences of playing hard-ball and cost-shifting to small and mid-market firms in the current economic environment. (740 words) . . . More
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Consultancy Marketing Deal Brings down Publisher of the Wall Street Journal Europe
Monadnock Research (Vol IV, No 39) - 3 Nov 2011
MR - Andrew Langhoff, Managing Director of Dow Jones & Co. Europe, Africa and the Middle East, and publisher of the Wall Street Journal Europe, stepped down recently after an internal investigation found that a marketing deal signed with Ann De Jaeger, and the HR strategy firm where she serves as a Partner, cast the editorial integrity of the WSJ Europe into question. Ann De Jaeger's firm, the Executive Learning Partnership, also purchased a large number of newspapers as part of the deal, which had the effect of inflating circulation numbers. The WSJ Europe published two articles on 14 March 2011 and on 14 October 2010 that appeared to be legitimate editorial content, but were associated with the marketing partnership, and for which Dow Jones had been compensated. This Research Note includes details on the Dow Jones case, and our perspective on why it's important for clients to vet the intrinsic value of thought leadership content, and not simply take it at face value. (905 words) . . . More
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Wellogix Prevails in Trade Secret Theft Case Against Accenture
Monadnock Research (Vol IV, No 38) - 2 Nov 2011
MR - Accenture will likely pay around $49 million in compensatory and punitive damages to a former software and services partner, Wellogix, in a trade secret theft and misappropriation case involving SAP and their client, British Petroleum. The court's latest order lowers a $94.38 million jury verdict against Accenture in May 2011. The Texas jury found that Accenture intentionally misappropriated trade secrets from Wellogix, and then knowingly copied, communicated and/or transmitted them without Wellogix's permission. Wellogix has asserted that the associated acts drove it out of the business of providing complex process procure to pay software and services to energy clients. This Monadnock Research Note includes case details; information on additional patent infringement actions involving energy sector clients; copies of complaints against Accenture, BP, and SAP; the Wellogix v. Accenture jury verdict; and various agreements that served as exhibits at trial. (450 words) . . . More
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2011 Strategy Consulting Rates
Monadnock Research (Vol IV, No 37) - 28 Oct 2011
This study presents an analysis of hourly strategy consulting rate structures for global 1000 clients across a number of industries. Rates from 70 firms were analyzed across the strategy consulting category, including a total of 119 firm-rate structures. Each section presents descriptive statistics for each of the Monadnock Research professional areas, including mean, median, range, min, max, and the number of rate structures analyzed. Each labor category is described in full detail, including experience and education requirements, and includes a percentile analysis of hourly rates. Rates from firms that were a subject of this analysis for the strategy consulting rate category included: McKinsey & Co., the Boston Consulting Group (BCG), Bain & Co., Booz&Co, Accenture, Deloitte, LEK, Roland Berger, Oliver Wyman, Capgemini, IBM, and PwC. Research Note includes 6 graphics, 15 tables and 8,230 words. The companion report is more than 80 pages and contains 52 tables and charts. . . . More
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Former McKinsey MD Indicted on Securities Fraud Charges
Monadnock Research (Vol IV, No 36) - 27 October 20
MR - Rajat Gupta, the former global Managing Director of McKinsey & Co., has been indicted on six criminal charges, and has also been charged civilly by the SEC, for allegedly communicating inside information about leading American publicly-traded companies to his friend and business colleague, Raj Rajaratnam. The SEC also filed new charges against Rajaratnam, found guilty on 14 securities fraud and conspiracy charges in May 2011. The charges against Gupta come just a few months after the US found it would likely not prevail in its former strategy to go after Gupta using a controversial SEC administrative action. That proceeding was simultaneously dropped in early August with Gupta's suit against the SEC for treating him differently than other defendants in associated litigation and criminal proceedings. This Research Note includes a copy of the criminal indictment and SEC complaint, as well as numerous previous associated filings and documents. (2,390 words) . . . More
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PricewaterhouseCoopers Regains Largest Professional Services Firm Title, Fueled by 20 Percent Advisory Business Growth
Monadnock Research (Vol IV No 35) - 8 October 2011
MR - PricewaterhouseCoopers (PwC) has taken back the largest global professional services firm title from Deloitte. Revenues for PwC's Advisory businesses grew by 20% in F-2011, to $7.5 billion. Growth was driven by the consulting, particularly in the US, and inorganic growth through a series of strategic acquisitions that included management consultancy, Diamond. Statutory audit services now represent just 40% of PwC's total revenues. The PwC network reported total gross revenues of $29.2 billion in fiscal 2011, ended 30 June. That's an increase of 10% over fiscal 2010 - 8% in constant currency. The increase was the strongest growth in revenues since 2008. Headcount grew to around 169,000 in the period. PwC had revenue increases in all regions. Asia rose by 14%, Australasia by 38%, and the Middle East and Africa by 20%. The firm returned to growth in the Americas with North American revenues increasing by 10%, and South and Central America doubling last year's growth to 23%. Growth was less in Western Europe at 4%, and Central and Eastern Europe at 7%. Revenue figures are gross and include expenses billed to clients. (880 words) . . . More
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Global First-to-File Patent System Harmonization: Consulting Implications of "America Invents Act"
Monadnock Research (Vol IV, No 34) - 7 October 201
MR - The US "Leahy-Smith America Invents Act", H.R. 1249, was passed by the US Congress and Senate, and became law on 16 September 2011. The legislation harmonizes the first-to-file (FtF) patent systems of the world's largest economies, and at first glance poses little downside for the largest global corporations. It promises to be a revenue windfall for the US government at a time when it has never needed it more, as its US Patent and Trademark Office (USPTO) gears up for the onslaught of new filings. We believe, however, the implications of this shift from First-to-Invent to FtF will be profound. This Research Note discusses the impact on demand for consulting services; practice areas most affected; arguments for and against the legislation; global implications; and organizational sponsors. (2,335 words) . . . More
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Bloomberg Completes Acquisition of Kennedy Information Parent, BNA
Monadnock Research (Vol IV, No 33) - 1 October 201
MR - Bloomberg has completed its acquisition of Kennedy Information parent, the Bureau of National Affairs (BNA) in a cash deal valued at around $990 million. BNA is now a stand-alone wholly-owned subsidiary of Bloomberg and will be part of the Bloomberg Industry Verticals Group. The acquisition was accepted by the BNA employee owners who tendered around 95% of their stock within the 20 business day offering period. Bloomberg received an early termination of the waiting period under Hart-Scott-Rodino on 15 September. It appears clear that BNA Subsidiaries was taken into bankruptcy as a pre-condition to the Bloomberg transaction. The reorganized entity, now re-named Kennedy Information LLC, emerged from bankruptcy with a final decree closing the Chapter 11 bankruptcy case on 25 August, the day of the Bloomberg-BNA deal announcement. Kennedy Information was purchased by BNA out of bankruptcy, and again operates as a BNA subsidiary. Kennedy's coverage areas now include consulting, healthcare, laboratory diagnostics, fertilizer and commodity manufacturing. There is no word on what Bloomberg intends to do with Kennedy Information, but given the lack of continuity with that of Bloomberg it is unlikely to be retained. BNA no longer has an SEC public reporting requirement. Research Note includes various announcements, court filings and orders. (1,100 words) . . . More
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HP Ousts CEO and Chairman Leo Apotheker; Surprising Successor, Former Bain Consultant Meg Whitman
Monadnock Research (Vol IV, No 32) - 24 Sept 2011
MR - The forced departure of Leo Apotheker as Hewlett-Packard's controversial Chairman and CEO was expected. His replacement, however, Meg Whitman, was a surprise. Whitman's background includes holding onto the reigns of a massively successful eBay for 10 years after it had become one of the most successful start-ups in history; executive stints at Disney, FTD, Stride-Right and Hasbro; work as a strategy consultant and firm executive at Bain & Co.; and most recently, in a costly failed bid to become Governor of California. She has been on HP's board for less time than Apotheker was at the helm. That would be 11 months for Apotheker, if you count his first several months in hiding to avoid an Oracle subpoena in the SAP Tomorrow Now case. That litigation cost his former employer $1.3 billion, in the largest copyright infringement damages award in U.S. history by nearly a factor of ten. In this Research Note we discuss why we believe that running HP, a company in the businesses of enterprise servers and storage; desktop and laptop computing; smartphones and tablets; monitors and input devices; network communications; printers, toner and supplies; enterprise applications and infrastructure software; management and IT consulting, and systems integration; customer service and field engineering services; and business process outsourcing, computer infrastructure outsourcing and cloud services, is outside Whitman's depth of experience and capability. It also offers MR perspective on the Whitman and Lane appointments, what that means for HP and its consulting and IT services operations, and what this continued diversion means to tech services clients. (1,200 words) . . . More
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Deloitte Announces Record Fiscal 2011 Revenues; Consulting Proportion of Business Continues to Grow Rapidly
Monadnock Research (Vol IV, No 31) - 23 Sept 2011
MR - Deloitte has announced fiscal 2011 aggregate member firm revenues of $28.8 billion for the year ended 31 May. It was the highest revenue ever recorded by Deloitte's global member firm network. The functional areas leading Deloitte's growth were financial advisory and consulting, which grew 15.1% and 14.9%, respectively. That compares to the audit and enterprise risk services segment that grew by 4.7%, and tax services, which grew at a 5.2% rate. Consulting growth was driven largely by implementation services. Growth areas include integration of regulatory knowledge with strategy, technology, and human capital skills, and post-merger integration, with strong growth in financial services. Financial advisory expansion was fueled by growth in valuation, restructuring, forensic services, analytics, and M&A transaction services driven by investments in emerging markets that included China, India and Brazil. Aggregate revenues grew 8.4% in US dollars and 7.7% in local currency -- the strongest revenue increase since 2008. Compound aggregate growth for 2005-2011 was 8%. Deloitte hired 49,000 professionals and exceeded headcount expectations, adding a net 12,000 jobs globally. Its total professional workforce is now 182,000 globally, and its total workforce is expected to grow to 250,000 professionals by fiscal 2015. Research Note includes MR perspective on the growing proportion of consulting to audit services. (3 charts and tables, 1,280 words) . . . More
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2011 Operations Consulting Rates
Monadnock Research (Vol IV, No 30) - 23 Sept 2011
This study presents an analysis of operations consulting rate structures for clients across a number of industries, including manufacturing, healthcare, pharmaceuticals, biotech, high tech, communications, energy, financial services, public services, and metals and mining. More than 85 percent of the rate structures were from global entities, and all were from organizations that fall within the 1,000 largest global organizations. Rates from 75 firms were analyzed across the operations consulting category, including a total of 126 firm-rate structures. This report presents statistics across 15 professional classifications, including a percentile analysis for each labor class. Rates from firms that were a subject of this analysis for the operations consulting rate category included: Accenture, ADL, A.T. Kearney, Bain, BCG, Booz&Co, Capgemini, Celerant, CSC, Deloitte, Huron, IBM, McKinsey, PA Consulting, PRTM, and PwC. Research Note includes 5 graphics and 15 tables - 8,000 words. . . . More
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Accenture Settles Rille Qui Tam Suit with US DOJ for $63.675 Million
Monadnock Research (Vol IV, No 29) - 18 Sept 2011
MR - Accenture has agreed with the U.S. Department of Justice to settle a whistle-blower suit filed in 2006 for $63.675 million. The Qi Tam lawsuit was originally filed by Rille and Roberts alleging that Accenture submitted false claims for payment under contracts with US federal agencies for IT consulting and services. The Justice Department characterizes the settlement as Accenture agreeing to resolve the claims that it received kickbacks for recommendations of hardware and software to the government, fraudulently inflating prices and rigging bids. Accenture continues to vigorously deny the allegations and says that the firm and the Justice Department have settled only to avoid the additional time, inconvenience and expense that would come with protracted litigation. The Accenture kickback allegations were part of a larger investigation of government technology vendors that has resulted in numerous settlements to date with firms that include IBM, PwC, CSC, Oracle, Hewlett-Packard, EMC, and Cisco. The total of the settlements paid by IBM, PwC, and CSC were around $6.5 million. That aggregated total was just a fraction of that paid by each of the firms that waited to settle. So there was clearly a significant premium charged to Accenture and the other firms that refused to address the risk early. Accenture's settlement, as well as that of Oracle, were in the range predicted by Monadnock Research in a September 2010 publication. This Research Note includes MR analysis and perspective on: the cost to firms of waiting to settle; why clients need to better understand firm partnerships, since acting in the client's best interest is often not in the firm's best interest; related case settlements and supporting documents, including complaints; and recommendations on what clients and firms should do to mitigate associated risk. (2 graphics, 1,950 words) . . . More
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Kennedy Information Owner BNA Subsidiaries Emerges from Bankruptcy; BNA Agrees to be Acquired by Bloomberg
Monadnock Research (Vol IV, No 28) - 25 Aug 2011
MR - Bloomberg has agreed to acquire Kennedy Information parent, the Bureau of National Affairs (BNA), for $39.50 per share in a cash deal valued at around $990 million. The transaction is expected to be completed before the end of the year. BNA appears to have taken BNA Subsidiaries into bankruptcy as a pre-condition to the Bloomberg transaction. The reorganized company, now re-named Kennedy Information LLC, emerged from bankruptcy with a final decree closing the Chapter 11 case on 25 August, the day the Bloomberg-BNA deal was announced. Bloomberg says it will make BNA a stand-alone subsidiary run by its current management. No layoffs at either company are anticipated in the short-term, but they expect reductions through attrition over time. BNA Subs had been facing a class action lawsuit asserting an estimated $15 million in claims. That case was dismissed with prejudice in a federal case related to the Bankruptcy on 15 July. Research Note includes various court filings and orders. (825 words) . . . More
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A Future Retrospective: The Silent Tectonic Shift in IT Services
Monadnock Research (Vol IV, No 27) - 15 July 2011
MR - The business models of large consulting and technology product and service providers are in the early stages of a tectonic shift. Changes like this are infrequent in any marketplace, but technology products and services are utilized by clients in all sectors. So the implications are not only significant for consultancies and technology product and service firms, but for the client organizations they serve. The shift is driven primarily by a combination of three factors: (1) ever-spiraling IT system costs; (2) protracted implementation timeframes; and (3) application functional capabilities that don't meet client expectations. What we refer-to as the "Oracle Factor" is fueled by dramatic discontinuities between it and the current offerings of alternatives other than Oracle, and the traction Oracle is getting from clients today offers proof. Ironically, it is fueled by an architectural change that is more reminiscent of environments of the past than any new innovation. This Research Note presents the Monadnock Research perspective on the emerging vendor business models that clients will choose between for technology products and services that will carry them through the next generation of business system expenditures. We preview the emerging models, and review many implications for clients, and for services associated with IT strategy and operations consulting, IT services, and outsourcing of IT infrastructure and enterprise applications. We also make predictions for the shifting technological landscape and offer 5 key recommendations for consulting client organizations. (5,625 words) . . . More
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CSC Completes iSoft Transaction
Monadnock Research (Vol IV, No 26) - 5 August 2011
MR - CSC has closed its acquisition of iSOFT Group Limited, a leading global provider of healthcare enterprise applications and implementation services. CSC paid around $502 million for the company. CSC Australia was the entity that executed the transaction, and iSoft will operate as a wholly-owned subsidiary of CSC Australia. More than 200 million patients across five continents are served by iSoft applications in over 8,000 hospitals and clinics. The firm's 3,000 staff provide applications and services in the areas of patient management, clinical management, medication management, departmental operations, scheduling, primary care, business intelligence, and incident management. Research Note includes transaction details and MR perspective on strategic implications. (835 words) . . . More
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SEC Dismisses Proceedings Against Former McKinsey Managing Director
Monadnock Research (Vol IV, No 25) - 4 August 2011
MR - The US Securities and Exchange Commission (SEC) has dismissed all of its proceedings against former McKinsey & Co. Managing Director, Rajat K. Gupta. Gupta had been global Managing Director of McKinsey for close to 10 years, retiring in 2007. The SEC instituted public administrative and cease-and-desist proceedings against Gupta on 1 March 2011. A few weeks later, Gupta filed a civil action against the SEC in New York challenging its institution of the proceedings. Gupta had been seeking a declaratory judgment in his suit. The primary issue claimed in it was that the SEC chose an Administrative action, rather than a civil suit, as it did against the 28 other defendants associated with Galleon. Gupta also alleged the SEC violated his statutory and due process rights, and denied his right to a jury trial. The SEC said that it was in the public interest to dismiss. Gupta has agreed to drop his suit as well. Research Note includes information on potential future charges and copies of associated documents. (825 words) . . . More
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Accenture to Acquire Niche Insurance Software and Services Firm, Duck Creek
Monadnock Research (Vol IV, No 24) - 24 July 2011
MR - Accenture has entered into an agreement to acquire Duck Creek Technologies, a privately held niche provider of software, consulting, and IT services to the property and casualty (P&C) insurance industry. The acquisition will strengthen Accenture's capabilities to support P&C insurers of all sizes, particularly within the mid-market. The companies say the combination would enhance Accenture's ability to help carriers adapt to market changes, more quickly launch products that match consumers' evolving needs, reduce operating costs, and improve customer satisfaction. We believe the acquisition also signals an early strategic shift of Accenture's focus to include the mid-market to fuel future growth. Research Note includes details on the players and our reasoning. (890 words) . . . More
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2011 HR Consulting Rates
Monadnock Research (Vol IV, N 23) - 23 July 2011
This Research Note includes the findings a client study of Human Resource (HR) consulting rate structures across a number of industries. More than 85 percent of the rates analyzed were from global entities, including a total of 45 firm-rate structures. All were from organizations that fall within the 1,000 largest global organizations. This report presents statistics across 15 professional classifications, including a percentile analysis for each labor class and detailed descriptive statistics. Rates from firms that were a subject of this analysis include Accenture, ACS, AON Hewitt, Booz&Co, Capgemini, Deloitte, Hay, IBM, Mercer, North Highland, Plus Delta, PA, Point B, PwC, and Towers-Watson. (1 graphic, 16 tables, 6,980 words) . . . More
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2011 IT Strategy Consulting Rates
Monadnock Research (Vol IV, N22) - 7 July 2011
This is the Strategy Consulting companion Note to the IT Consulting Research Note published in June. This study analyzes comprehensive IT strategy consulting rate structures of clients across a number of industries, including manufacturing, healthcare, pharmaceuticals, biotech, high tech, communications, energy, financial services, public services, and metals and mining. More than 80 percent of the rate structures were from global entities, and all were from organizations that fall within the 1,000 largest global organizations. Rates from 63 firms were analyzed across the IT Consulting and IT Strategy Consulting service categories, with 110 rate structures. Rates from firms that were a subject of this analysis include: Accenture, Atos Origin, AT Kearney, Bain, BCG, Booz, McKinsey, Capgemini, CSC, Deloitte, IBM, KPMG, Oliver Wyman, PA Consulting, PRTM, PwC, TCS, and Wipro. This Research Note presents statistics across 14 professional categories, including detailed descriptive statistics, a percentile analysis for each labor category, and strategy rate differential premiums for each labor category. (2 graphics, 14 tables, 6,350 words) . . . More
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EC Commissioner Barnier Considers Prohibiting Auditors from Offering Consulting
Monadnock Research (Vol IV, N 21) - 1 July 2011
MR The EC Commissioner for Internal Market and Services, Michel Barnier, addressed a conference of the Federation of European Accountants on 30 June, and advocated for a number of auditor regulatory changes that could include a total ban on audit firms providing consulting services and mandated rotation of auditors. Barnier is the EC official responsible for the Internal Market and Services Directorate General and Office for Harmonization in the Internal Market. Speaking before the federation of European CPA's Barnier intimated that he believes the regulatory environment for auditors in Europe is deeply flawed and in need of reform. He proposes the EC focus on: auditor independence issues; opening of the audit services market; and a more integrated European auditor regulatory and certification environment. The issue of auditors offering consulting and advisory services was addressed in his remarks. He believes that a key factor that fuels excessive familiarity between auditors and their clients lies in providing too many consulting and non-audit advisory services. Barnier asks, "How can we view an auditor as independent when the firm also advises the client in the area of strategy?" Research Note includes translation and interpretation of key points from speech associated with consulting. (865 words) . . . More
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SAIC Subcontractors Indicted in $40+ million Alleged Fraud; SAIC Consultant Pleads Guilty in Scheme
Monadnock Research (Vol IV, N 20) - 1 July 2011
MR - Nine defendants have been indicted in connection with an elaborate scheme to defraud the City of New York on its CityTime project. The people named in the indictment are Mark Mazer, Gerard Denault, Padma Allen, Reddy Allen, Dimitriy Aronshtein, Svetlana Mazer, Larisa Medzon, and Anna Makovetskaya. The SAIC subcontractors allegedly complicit in the scheme, along with 2 SAIC employees and a New York Office of Payroll Administration staffer, are Technodyne LLC, D.A. Solutions, Inc. and Prime View, Inc. The contractors are alleged to have grossly over-billed for consultant time on the engagement, and to have employed a network of shell companies and bank accounts in the US and elsewhere to conceal more than $40 million in fraudulently-billed consulting fees. Mark Mazer was a city employee authorized to approve consultant invoices. SAIC employee, Carl Bell, a Chief Systems Engineer in the firm's New York Office, pled guilty to multiple charges in the fraud, and has admitted to receiving millions in kickbacks. Another SAIC employee, Gerard Denault, was charged and is out on bail. Ironically, CityTime, a project that endeavors to properly report time worked, has itself ballooned to 950% of its original budget due, in part, to fraudulently reported time. "IT contracts that involve hundreds of millions of dollars and multiple layers of consultants are a new frontier for fraud, and DOI has been at the forefront of exposing it," said Rose Gill Hearn, Commissioner, New Your City Department of Investigation. (updated 1-July-2011, Research Note includes allegation details, indictment and complaint - 2,975 words) . . . More
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2011 IT Consulting Rates
Monadnock Research (Vol IV, N19) - 26 Jun 2011
This Research Note presents the findings of a comprehensive IT consulting rate study across a number of industries, including manufacturing, healthcare, pharmaceuticals, biotech, high tech, communications, energy, financial services, public services, and metals and mining. More than 80 percent of the rate structures analyzed were from global organizations that fall within the 1,000 largest global entities. Rates from 63 firms were analyzed, including 110 separate rate structures. Firms that were a subject of this analysis include: Accenture, Atos Origin, AT Kearney, Capgemini, Cognizant, CSC, Deloitte, Hewlett-Packard, IBM, Infosys, KPMG, North Highland, Oracle, PA Consulting, Point B, PwC, SAIC, SAP, TCS, and Wipro. IT Strategy Consulting rates are presented in a companion report. This Note presents findings across 13 professional categories, including descriptive statistics and a percentile analysis for each labor category. (1 chart and 26 tables - 5,375 words) . . . More
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