PRISM Magazine On-Line  -  January 2000
A Different Direction
Firms like Andersen Consulting have become the hot new workplace for engineering grads willing to put in long hours

By Dan McGraw

When Sun Microsystems needed a new computer network that would lash together some 40 old computer networks and link 60 others into a new and secure network, the company didn't call upon software engineers at Stanford or the many tech companies headquartered in Silicon Valley. Instead, it called Chicago-based Andersen Consulting to do the job. The country's largest consulting firm created "Sunspeak," a vast network that would link not only all Sun customer accounts and suppliers, but also every employee in the company.

Some may be surprised that a Silicon Valley stalwart like Sun would turn to a consulting firm that until recent years was a relatively small appendage of a tax accounting firm. But firms like Andersen Consulting are now becoming big players in the high-tech world, particularly in the worlds of networking and e-commerce.

As graduates from the nation's top engineering schools survey the labor landscape, they find a job market that is perhaps the best in decades. With national unemployment seemingly stuck just above 4 percent—and college graduate unemployment rates hovering around 2 percent—engineering students seemingly have the world by the tail. And for many graduates, the dot coms—or even blue-chip companies like General Motors or International Business Machines—seem to be the logical place to head after graduation.

According to a 1998 survey by the National Association of Colleges and Employers, 9.7 percent of offers made to students with technical majors came from consulting services firms, more than from any other field.

But for many engineering students, joining a consulting firm like Andersen may be more typical. According to a 1998 survey by the National Association of Colleges and Employers, 9.7 percent of offers made to students with technical majors came from consulting services firms, more than from any other field. The reason is not startling. As companies around the globe look for ways to start and generate more revenue in the world of e-commerce, consulting companies are the most efficient way to go. And a company like Andersen Consulting, with revenues last year of $8.3 billion, is leading the information technology parade.

Andersen is perhaps the leading employer of recent college graduates, hiring between 3,000 and 5,000 per year. Though the company does not specifically keep track of how many engineering grads it hires, the number has been growing quite substantially during the past five years.

Upfront and Personal

What is happening in the consulting business is a major shift from the traditional role of providing back-office support to improve operation efficiency. Today, many firms are more interested in front office projects that will transform customer relationships and increase market share. "Companies are starting to focus on how I grow my top line," says Jack Wilson, Andersen Consulting's managing partner for global markets. "Most everyone I talk to outside the firm believes it's going to be bigger than the back office ever was."

According to International Data Corporation, revenues from "customer relationship management" (which includes consulting, systems integration, and outsourcing) will exceed $40 billion in 1999. By 2003, IDC predicts, revenues will close in on $90 billion. Andersen is by far the largest of the consulting firms.

Like the others, Andersen Consulting wants to cash in on this huge and growing market. But despite its seemingly entrenched position atop the consulting heap, it has only been relatively recently that Andersen could pursue such goals on its own.

The accounting firm Arthur Andersen Co. began a consulting practice in the 1950s to complement its traditional accounting and tax business. By 1984, the consulting business was more profitable per partner than the accounting side, and in 1989, Andersen Consulting was spun off into a legally separate commercial enterprise. More recently, Andersen Consulting and Arthur Andersen have decided to split completely; an arbitrator's ruling on the divorce proceedings is expected early this year.

The growth in consulting—particularly in information technology business—has allowed Arthur Andersen to swell to 1,250 partners and 64,000 employees. The e-commerce consulting practice alone—with more than 5,000 clients—generated $425 million last year. Their success has been predicated upon the fact that Andersen Consulting is able to advise clients in a new world where everything—clients suppliers, workers, technological hardware and databases—is related to everything else.

Specialists Need Not Apply

The basic understanding of integration of hardware, software, and people leads Andersen Consulting to look for different types of engineering graduates than firms offering more traditional jobs in technology fields. For one, Andersen recruiters look for what they call "lifelong learners," with varied skills rather than specific ones. In job interviews, grads will be asked to solve problems that often have solutions based in behavior rather than hard science. Extracurricular activities and internships are often more valued than high G.P.A.'s. In short, Andersen is looking for people who combine technological know-how with business acumen and communication skills. In the consulting business, the multi-talented have a clear advantage.

In short, Andersen is looking for people who combine technological know-how with business acumen and communication skills. In the consulting business, the multi-talented have a clear advantage.

What will engineering students get if they sign on with Andersen? To start with, undergrads can start at up to $60,000 a year. Those hired in the Technology Competency division have flexible career tracks, with areas of specialty dealing with technology architecture, research, or management solutions. The key advantage is that the company hires people to work on a variety of projects.

Such experience is key to the integrated world of information technology. The experience gained at Andersen in a few years will be prized by those in other companies looking for engineers skilled in a variety of tasks. And for those who work their way up the ladder at Andersen, a partnership can be had after 13-15 years, with an annual compensation package of $1 million or more.

The downside for consulting work is that the work at the beginning is hard, often requiring many hours and long-term travel assignments. And there are those who postulate that the consulting bubble may burst soon enough. Also, some firms may decide to rent software from the Internet rather than pay a firm like Andersen to install and integrate it.

But if you look at some of Andersen's clients, you realize that they are not just providing help to widget companies to sell their products online. For example, Andersen is building networks for Nokia, Ericsson, and Texas Instruments. The company also has a $73 million contract with the U.S. Air Force to link maintenance workers with 200 sites when ordering parts and supplies. And Andersen is vigorously investing in companies where it sees potential. Thus, the growth for the company will be twofold: a consulting business that sells its services to other businesses, but also functions as an owner of various e-commerce ventures.

Industry analysts have concluded that roughly only one in ten companies has a clue about how to use information technology to connect with other businesses and consumers. "For the past century, many firms have lived by that catch phrase of self-reliance: if you want something done right (and on time), do it yourself," writes Richard Melnicoff, an associate partner in the Andersen Consulting e-commerce line of business. "Given the high costs and the risks of transacting business with others, it made good economic sense to, say, make most of your parts if you were an automobile manufacturer, or to own your own fleet of trucks if you were a food processor."

"E-commerce has changed all that," Melnicoff continues. "The result is that specialists are cropping up in practically every major business activity, from product design to delivery, and now it's possible to pull together a virtual organization that employs only 'best of breed,' cost-effective contributors at each point."

The linking of these various enterprises is the key to the growth and success for Andersen Consulting. And as recruiters for the company make their way to college campuses across the globe this year, they realize that a key resource for the company's growth will be well-educated engineering grads with diversified skills. Less than a decade ago, MBAs were the prize catch for big consultants. In this millennium, engineers have become at least as valuable, and perhaps more so, as companies attempt to catch up with the global economy.


Dan McGraw is a freelance writer in Cleveland.