Letters

Practice What You Preach

Your February cover story on IBM Research, "Big Blue and the End of Time," should be required reading for every senior executive of a professional services firm. Any time IBM sets its top R&D talent on a problem, odds are that a revolution is soon to follow. And this time the problem lies at the heart of our industry. The problem is the billable hour.
In the past, a few innovative firms have explored alternatives to the billable hour. Some have become more like media companies, packaging their intellectual property into stand-alone products. Others have embedded their expertise into software and on-line tools that generate licensing and subscription fees. Still others have assembled corporate communities, charging membership fees for the privilege of networking and knowledge exchange.
These innovators have demonstrated that alternatives to the billable hour can create value and turn a profit. But these innovations have remained on the outskirts of the industry, inflicting little damage on the labor pyramids that dominate the competitive landscape. IBM is the largest professional services organization in the world. Its challenge to the billable hour should not be taken lightly.
As consultants, we often tell our clients that competitive advantage is fleeting and to be on guard for industry disruption. Our industry is not immune. It's time to look in the mirror.