ERP Consulting: Large Firm or Small?

Large consulting companies provide beneficial work in general. Even though their employees are often smart, hard-working professionals, in most cases better results will be realized by a small consulting firm. If that sounds counterintuitive to you, here are some reasons to avoid large consulting firms in favor of small ones for your Enterprise Resource Planning project:

  • There’s an excellent chance that the people responsible for your favorable impression of their firm, whether it was the sales person or the firm’s impressive literature, won’t be the person working on your project. Unless your budget for the project is enormous, there’s a pretty good chance that a large consulting firm’s signature talent won’t be the primary people you’ll be dealing with. The consultant assigned will, most likely, be someone further down the food chain. In other words, you are many steps removed from the “man behind the curtain”. When you engage a small consultancy, the expert is yours, and will work with you and your staff directly.
  • For the average manufacturing or distribution business, having a wide range of proficiencies may produce economies of scale. In the consulting business, the opposite is true. For a consulting firm, having more personnel decreases efficiency. Bigger does not translate to lower costs. That’s why a large firm costs multiples of a small firm. Also, you don’t want your project handled by a company that produces assembly line solutions. Their superfluous capabilities mean additional overhead and expense, whether or not those capabilities are needed for your project. For example, the fact that a consultancy has much expertise with solutions for government doesn’t help you if you are not a government. It produces expenses for the consulting firm that must be covered by you. Larger staff does not equate to more efficiency. Twenty mediocre consultants do not deliver a better service than a top solo consultant. They just affect more businesses with their unexceptional designs.
  • When a large consulting firm proudly tells you that they have offices around the world, so they are there when needed, it isn’t as important as it may seem at first. Thanks to today’s technology, one person can now analyze the business, conduct presentations, interview stakeholders, and hold virtual workshops with as many participants as required. And can do it all at a much lesser cost.
  • The best innovative thinking is produced by small companies. The big consulting firms are like any large corporation. They require the same politics, ladder climbing, and mandates to observe company procedures. If you require out-of-the box, agile, and individualistic thinking, you’re less likely to find it among the gears of a corporate bureaucracy.
  • The success of consultant from a large firm is not aligned fully with the outcome you want. When you work with the owner of a small consulting firm, he wants and needs to please you. When the consultant is from big firm, he has two patrons. He needs to please his boss first, and then you. Most of the large firms have many layers of internal bosses. The consultant needs to please them all to be successful professionally. That is not to say your project isn’t important to him. But, there are factors mostly irrelevant to you, such as competing for internal resources, developing his subordinates, and utilizing the team most efficiently, that occupy his thinking.

Under which circumstances does make sense to employ a large consulting firm?

Here are some of the instances when the added expense of a large consultancy can’t be avoided:

  • A small, independent consultancy won’t have capacity to handle an immense organization. For example, the government of a large state will definitely be better served by an equally large consulting firm. No matter how talented a small consulting firm is, they have a limited capacity.
  • When an executive needs a brand name to support their decisions, and prestige is critical, a large consultancy can be very helpful. It can be extremely helpful to have such a firm for backup when presenting to the board.
  • The added expense of a large consultancy is also necessary when many people are required for simultaneous events which must be attended to over multiple geographic locations. While a small consultancy can help you almost anywhere, they can’t be everywhere at once. However, the cases where simultaneous reach is needed are few, and apply more to implementation than software selection.



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