| Type | Employee-owned |
|---|---|
| Industry | Management Consulting |
| Founded | 1943 (Personnel Administration) |
| Headquarters | London, UK |
| Key people | Jon Moynihan, Executive Chairman Alan Middleton, Chief Executive Officer Andrew Hooke, Chief Operating Officer |
| Revenue | £370,000,000 (2009) |
| Employees | 2,546 (2009) |
| Website | www.paconsulting.com |
PA Consulting Group (PA) is a global management and IT consulting and technology and innovation organisation with specialist expertise across the defence, energy, financial services, government and public services, healthcare, automotive and consumer goods, telecoms, and transport and logistics sectors and a broad understanding of business. As of 2007 it operates in more than 35 countries, working in both private and public sectors. It has won independent awards and recognition for its client work in financial services, energy, life sciences[1] and healthcare, government and public services, manufacturing, defence, and telecommunications.[2] PA's Report and Accounts for 2005 defines its services as: helping clients to design strategies for growth, achieve effective IT that improves business performance, mobilise human resources, deliver complex programs and major business transformations, and develop breakthrough products and processes. The latter are created at PA's dedicated applied technology facilities at Melbourn, Cambridgeshire, UK, and Princeton, NJ, USA. [3][4]
PA is entirely an employee-owned company. PA has no audit practice and does not form exclusive alliances with third-party vendors or service providers. PA does, however, work in non-exclusive alliances on specific programs when it is in the best interests of its clients.[3][4]
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PA operates worldwide; its principal office locations are in the Nordic, Europe, US, and Gulf markets (http://www.paconsulting.com/locations/).
Personnel Administration (PA) was founded in 1943 by three Englishmen: Ernest E. Butten, Tom H. Kirkham and Dr David Seymour. Britain's war effort created great demand for munitions and goods, which had to be produced by a relatively unskilled work force. Butten and co formed Personnel Administration Limited to provide advice to industry as to how to improve the productivity of their workers.
Like the other three firms that dominated consulting in the 1940s, 50s and 60s, PA was an offshoot of the pre-war Bedaux Company. Bedaux in turn was descended from the time and motion 'scientific management' theories of Frederick Winslow Taylor and Frank Gilbreth. Butten sought to take the somewhat mechanistic and task-orientated concepts of scientific management and add a human dimension to them. The chief idea, along the lines of Douglas McGregor's 'Theory Y', was that by involving the worker in the process of change, greater gains could be made both by the worker and the organisation. To date, time and motion management consultants had been seen as the enemies of the workforce leading to resistance and even violence; portrayed in a spoof of the role of a management consultant in the Ealing comedy I'm Alright Jack).
PA's first assignment was to train housewives to assemble the tail gun section for the Avro Lancaster bombers, as part of Britain's policy of bringing women into the factories in order to free-up male workers for the armed forces. By 1950 the company had 84 consultants.
PA expanded over the next 20 years, and by 1970 it was the largest management consulting firm in the world by headcount (closely followed by Booz Allen and McKinsey). PA had also expanded geographically, mostly along the lines of the British Empire: indeed its operation in Australia provided roughly a third of the firm's revenue.
In the 1960s PA diversified its revenue sources significantly by more or less inventing the 'newspaper box' advertisement for recruitment purposes. This concept spread rapidly across Europe and the Far East: in some countries, during the 60s, the 'PA Supplement' was an extra section of the newspaper filled entirely with advertisements from PA Recruitment.
Butten retired from PA in 1970, having earlier sold his 100% shareholding in PA to the Butten Trust in 1958. The Trust was intended as a long term guardian of PA's fortunes and an assurance that the company would be 'owned by the employees'.
PA's position in the industry deteriorated drastically over the following quarter century, as competitors such as McKinsey and the newer strategy consulting firms (such as Boston Consulting Group and Bain) redefined the concept of management consulting. While there were occasional years with strong revenues, the company was never very profitable. One bright element during this period of general decline was PA's work advising companies on potential applications of technology to business issues. Arising out of this success, major technology centres were built in Melbourn, UK and Princeton, USA.
Towards the end of the 80s, after an upsurge in the industry, PA's management decided it wished to take the firm public. The Butten Trust, after an application to the courts in the UK, agreed to give 15% of its shares to its employees, as part of a long-term plan to float. However these hopes were dashed in the subsequent consulting industry downturn of 1989 to 1992 and, by the end of that downturn, PA was essentially bankrupt, with some £30 million (US$ 57 million) of debt, significant annual losses and a rapid outflow of staff.
Between 1991 and 1994, PA lost almost half of its people, partly because of its downturn in fortunes, and partly because companies such as IBM and EDS had started to enter the consulting market and were aggressively hiring. During this time, in 1992, Jon Moynihan was appointed as chief executive of PA, with a remit to turn the company around. With a new strategy, aggressive cost-cutting, and an industry upturn, the turn around succeeded and in 1995 PA made record profits.[5] PA expanded significantly in the United States through the acquisition of Hagler Bailly in 2000.
Although PA suffered in the consulting recession of 2001-2004, its revenue and headcount recovered, and 2004, 2005 and 2006 were, in turn, record years for PA. In recent years the firm has significantly diversified its activities into ventures and 50% of PA's return to shareholders over the years 2002-2006 came from non-consulting activities.
PA closed its consulting operations in Australia in 2007.[6]
In 2010, PA worked with leaders and organisations around the world to bring about real, lasting change across a range of complex projects. For example, PA secured annual savings of 175 million Danish kroner for Post Danmark through more effective workload forecasting across 11 million items of mail per day (http://www.paconsulting.com/about-us/contacting-pa-worldwide/contacting-pa-in-europe/transforming-business-in-denmark/). PA's innovative work on the UK Identity and Passport Service's world-class biometric visa programme ensured the agency can process over five million applicants in a year at £160 million less cost (http://www.paconsulting.com/our-experience/delivering-a-biometrically-enabled-visa-system/?locale=en). And PA's work with BAE Systems delivered more than 30% cost savings on specialised components for civil and military avionics products (http://www.paconsulting.com/our-experience/identifying-cost-savings/).
The firm won a gold award at the 2010 Management Consulting Association Awards (http://www.paconsulting.com/our-experience/pa-wins-gold-at-the-2010-mca-awards/).
PA Consulting won a contract with the government for the UK National ID card scheme. The contract was not for implementation of the scheme, but included being part of a team working on "the policy, legislation, design, feasibility testing, business case and procurement elements of the proposed scheme." [7]
In 2008, PA Consulting lost a confidential data stick, prompting the Home Office to review its contracts with PA Consulting[8]
The Department for Communities and Local Government spent £68.6 million on consultants amounting to 76 % of the cost of the central project team. £42 million of the total spend was paid to PA Consulting to advise on project management issues. Despite these large sums and the consultants' critical role in running the project, the Department did not use benchmarks or indicators to evaluate outputs or monitor performance. [9]
FiReControl was characterised by very weak project and contract management which eliminated any chance of overcoming the flaws in the way the project was approved in the early phase. We have seen many examples of poor project management before, especially in IT projects, but in this case, poor management was a consistent feature across most aspects of the project. [10]
In April 2010 the Department concluded that cancellation was the best option, but it took a further eight months to achieve it. The department is now left with empty buildings, no inter-operable IT system and no change in working practices. In total a minimum of £469 million will have been wasted. [11]
PA's venture programme (PAGroup Ventures) was established in 2000 to exploit the ideas and intellectual capital generated from its consulting work. This has been highly value generating: for example PA created a third-generation mobile phone business called UbiNetics which was sold in two tranches for a total of $133 million in 2005; and Meridica - a drug delivery system company - was valued at time of sale to Pfizer at $125 million in 2004. Each sale generated a return of many multiples of PA's total investment in its ventures programmes to date.
PA demerged its successful venture arm, Ipex Capital, in June 2008.[12] PA Consulting continues to work closely with Ipex Capital on existing ventures in the Ipex portfolio as well as looking at new opportunities together.
ProcServe continues to be a wholly owned business of PA Consulting Group, providing secure electronic marketplaces with vendor-neutral connectivity and transaction capabilities.[13]
These awards are organized for IT focused implementation consulting firms by the UK's MCA, and run in association with the magazine Management Today. Some 50 firms enter the competition every year, including many of the major global consulting organisations, although strategy firms such as McKinsey do not enter.[14][15] They are independently judged and aim to identify the best case studies in each of 18 categories, where organizations, in the private or public sector, have achieved a significant improvement in performance with the assistance of management consultants, either in-house or external. PA has won awards, including, in 2006, the overall award for its work with the Georgian Government and US Agency for International Development.[15] PA won a single award in 2010, but did not win any awards in the 2011 MCS Awards.