No one ever got fired for using a big name consultancy….here’s a case history

Glenn Zimmerman guest blogged for me a few months back about how companies find it safer to go with a known / name / brand company than an unknown, which many small businesses are. One of my Fast Trac students, Vadim, relayed this story of trying to work with the city that testifies to Glenn’s point and extends to government as well:

Vadim had an expediting company that dealt with obtaining construction permits and various construction-related approvals from multiple different NYC municipal agencies. Vadim, and some of his co-workers, developed a system that allowed the different entities to transfer all their paperwork online that cut down on most of the time and cost for homeowners looking for construction permits. They used biometric access keys, encrypted secure connections and cloud storage to ensure that their product was safe and reliable. They calculated that the municipal agencies involved would have saved about $60 million a year by using this system – the price tag of the system was a little over $4 million. They built a prototype. Other benefits included saving around 70 tons of paper a year, elimination of backed-up manual processes, transparency, etc. They even did market research and found that 96% of surveyed industry members (including city employees) wanted this system.

Their idea got support from the Mayor’s Office and the Office of the Public Advocate who arranged a meeting with the higher-ups within the Dept. of Buildings. During the meeting three of the DOB executives looked bored. They told Vadim that even though he had a great idea the department didn’t have any funds and recommended that he return the following year.

Vadim later found out that the DOB hired Accenture to “improve” their system at a cost of $27 million. Accenture’s solution, told to my student by an insider, was to create a B-scan system which lets you fill out paperwork online, print it out, physically bring it to the DOB only for it to be scanned back in online. The DOB also had to hire more people to do the scanning.

Vadim was bitter about this experience. Some of you may have similar experiences.

I would love to hear from anyone who might have a solution or suggested solution for this small business conundrum.

Sandra Holtzman teaches CEO 035: Licensing.
She is the author of Lies Startups Tell Themselves to Avoid Marketing.