How Firms Are Organized

When Andersen Consulting — the largest and arguably the most dynamic global consultancy — announced its 1999 revenues last month, few industry pundits could conceal their gasps. The firm, which had grown by more than 20 percent annually since 1994, disclosed that it had grown by less than 8 percent last year.For those familiar with the ebb and flow of 1999’s consulting industry, the slowdown was hardly a surprise. The end of  Y2K-related projects and a downturn in enterprise resource planning (ERP) consulting opportunities helped slice in half the growth numbers for most major IT consultancies. Why news of Andersen’s sluggish revenues startled many, however, was the misguided notion that the ’90s juggernaut was going to somehow escape the pains of organizational reform by transforming itself into a dot-com consultancy within a single year. This was a notion fed largely, perhaps, by Andersen’s communications prowess and its unmatched ability to transform itself in its industry’s mind’s-eye. What’s now obvious is that while Andersen may be sporting a dot-com wrapper, its organization remains a work-in-progress. And like so many of its competitors, the firm is now undergoing vast organizational changes to better meet the demands of its e-business clients.It is because of this collective organizational transformation — one which no consultancy will escape — that we thought it appropriate to have our cover story, entitled “How Firms Are Organized,” examine not only how consultancies are retailoring their organizational structures, but also the client demands responsible for putting these changes into motion. All gasps aside, 2000 will be remembered by both consultants and industry pundits alike as the year of the re-org — The Editor.