As Traditional Consulting Fails ERP, Execution Models Gain Favor

In 2012, while working for a previous employer, one of the world’s largest multinational companies, I witnessed firsthand the pitfalls of relying heavily on big consulting firms. Our company embarked on a major ERP implementation, code-named “Mach 1.” We hired a large number of expensive consultants to design and assist with the implementation of this new system across the organization.

As someone with a background in computer systems engineering, ERP implementations, and years of operational experience, I served as the sponsor for my division’s part of the rollout. I remember sitting in meetings where consultants confidently told us we would go live on schedule. But from my own perspective, I could see we were missing crucial steps. I remember telling them bluntly that we were not ready.

In the end, I was right. Just before the planned go-live, the company had to halt the entire project after spending about $1.3 billion. The project failed, and I’m convinced a big reason was that we relied so heavily on outside consultants who didn’t have to live with the execution.

This experience was a powerful lesson for me. It highlighted how traditional consulting approaches can be incredibly costly and do not always deliver real value. And it’s exactly why there’s a growing trend today toward firms that focus more on execution and shared-risk models rather than just high-level advice.

Over the past few years, a clear trend has emerged, indicating that traditional consulting firms have experienced slower revenue growth and have had to reduce costs to remain competitive. Meanwhile, there has been a growing shift toward more execution-focused services that emphasize outcome-based pricing and reduced upfront fees. For example, the execution services market is actually growing faster, driven by clients wanting more measurable results.

In recent years¹, firms like McKinsey have been shifting toward performance-based pricing, which ties their fees to actual outcomes rather than just charging big upfront costs. There’s a broader industry trend toward more flexible, value-based pricing models and using technology like AI to reduce costs

This trend isn’t just a coincidence, it makes a lot of sense. More and more companies are under pressure from their stakeholders to continuously reduce costs and boost efficiency. Traditional consulting models, with their high upfront fees and sometimes uncertain returns, just don’t align as well with this new demand for tangible, measurable value.

By moving toward execution-focused matchmaking services, like those we provide at Tompkins Ventures, companies can align their cost-reduction goals with partners who are just as invested in their success. In other words, it’s not just about cutting costs, it’s about doing it in a way that minimizes risk and maximizes real-world results.

Over the years in my strategic sourcing work in Mexico, I have visited hundreds of manufacturing companies with the purpose of identifying and developing suppliers capable of delivering high-quality, cost-competitive products for my nearshoring clients. Through those visits, I began to notice a clear and consistent pattern: there is a direct correlation between expensive infrastructure, oversized teams, and a lack of competitiveness in product pricing.

When I walk into a factory located a few blocks away from the main streets, often in an older, fully owned but carefully maintained building, I almost immediately know what I’m looking at. Floors marked with 5S discipline, a small but deeply committed team, and well-maintained machines running close to optimal utilization are strong signals of competitiveness. These companies are not trying to look impressive. They are trying to be efficient.

When those same companies also demonstrate strong quality systems and solid engineering capabilities, I can almost bet that they will be world-class suppliers.

The same principle applies to professional services.

The Asset Burden

Traditional consulting firms are not just expensive because of their consultants. They are expensive because of their asset model. They are built on:

• Premium real estate
• Large teams of consultants
• Heavy travel Layers of management and internal bureaucracy
• Expensive systems to manage projects and customers

These are fixed assets and fixed costs that must be justified, billed, and recovered, regardless of actual value delivered to the client. This expensive condition can change incentives. The business model may become less about solving the problem in the fastest, most effective way, and more about maximizing billable hours, expanding project scope: asset-driven behavior.

Matchmaking and execution-focused organizations operate under a completely different philosophy:

• Network-based instead of headcount-based
• Outcome-driven instead of hour-driven
• Variable cost instead of fixed cost
• Distributed instead of centralized

They don’t need expensive offices or travel-heavy delivery models. They don’t scale by adding headcount and buildings; they scale by expanding capabilities and relationships.

In summary, traditional consulting firms operate from premium buildings, carry large permanent teams, and maintain cost structures that must be recovered through high fees and prolonged engagements. Matchmaking and execution-focused organizations operate more like lean manufacturers: asset-light, disciplined, focused on throughput, and obsessed with outcomes. They don’t look impressive, but they are effective.

That is why execution-focused matchmaking models are structurally better positioned to compete than traditional consulting. This makes them structurally more aligned with how modern manufacturing leaders think: throughput, cost control, and cash flow.

If you are looking for support in digital transformation, financial backing to scale your business, organizational development, procurement, re-globalization, or cost reduction across warehousing, distribution, and freight, we invite you to connect with us. Chances are, we can help — and our model is risk-free, with no upfront fees

¹Source:

https://www.fnlondon.com/articles/ai-will-overhaul-consulting-fees-mckinsey-says-8385211d?utm_source=chatgpt.com