Consultant impartiality: are some vendors more equal than others?

In a hi-tech world that creates millionaires on a daily basis and delivers multi-billion dollar mergers even in the 'silly season', it is easy to lose all comprehension of true value. So when Cisco announced its intention to plough $1bn into accounting and services company, KPMG, it appeared to be just another 'so what?' deal. On reflection, however, it raises a question that goes to the heart of every IT purchaser around the globe - what price impartiality?

The agreement is relatively straightforward - a services company joins forces with a networking specialist to form a brand new venture that advises companies how to exploit the potential of the Internet. Cisco will give KPMG's IT consulting business a boost by passing leads from a 6,000-strong sales force. In return for Cisco's generosity, KPMG will dedicate 4,000 consultants to serve the systems integration needs of Cisco's customers. Cisco will get a 20 per cent stake in the new venture and a seat on the board.

Critics say, however, that when an IT equipment vendor takes such a large stake in a consulting firm, the consultancy firm loses its identity. There is a major distinction between the systems integrator, which makes deals to shift certain vendors' products, and the services and consultancy firm, which is there to offer strategic vision. The likes of KPMG, Cap Gemini, Andersen Consulting and EDS should not be shifting boxes, the argument goes.

There is nothing, of course, to stop KPMG recommending alternatives to Cisco in the future. But when you have 4,000 people dedicated to understanding one manufacturer's equipment, what are the chances they will come down on the side of another?

Nortel, one of Cisco's major rivals (the other is Lucent), remains surprisingly phlegmatic. "We've got relationships with KPMG, Deloitte and the rest and will continue to provide them all with information about our products and services," said Chris Tolmie, senior market development manager for Nortel's Carrier Data Solutions division. "For [KPMG's] part we assume they will carry on regardless."

A billion dollars would appear a lot of money to invest in the hope that KPMG will "carry on regardless". Certainly too much for Cisco, according to one former employee. "Having worked for Cisco, I know their plan for world domination is no joke," he told Silicon.com. "The role of consultancies has to be firstly to understand the business and secondly shield the customer from shiny-suited sales people selling features and benefits."

This is to underestimate the buyer, says Nortel's Tolmie. "Customers are fairly good at working out what sort of information they are getting," he said. "They want multiple views and go to consultants to help them understand and select vendors and technologies."

Nevertheless, Henry Brysh, director of UK-based services firm, CNS, believes a lot of consultants are becoming complacent. "The problem with the larger consultancies has always been that the points through which they deliver strategy are too far removed from the areas of business that actually develop the solution. Consequently, these consultancies have always followed the path of least resistance. No consultant ever had his fees withheld for recommending Microsoft. As a consequence the amount of strategic imagination shown has always been very weak."

Phil Blades, associate director at what he describes as the "proudly independent" Cap Gemini, believes vendor investment does raise concerns, but simply reflects a shift in the market. "IT services companies have traditionally kept vendors at arms length. But in the late 1990s the opportunity to be all things to all people is difficult to achieve. So it's about building relationships with key players - IBM, Microsoft and so on. The chance of being totally independent is receding."

As if to illustrate the point, within hours of news of the KPMG/Cisco venture, Lucent announced that it was to spend an equally staggering $3.7bn to bring network services consultants, INS, under its wing.

Consultants should be forced to declare an interest, concludes Blades. If they are unwilling to do so, users should force their hand - a point which is echoed by the former Cisco insider. "Some of the responsibility is with the customer - they need to research who will be their partners. To be blunt, if you are going to trust your strategic direction with someone, validating their independent credentials is a must."

Next stop - consultants who advise you which consultants to go with.