PA Consulting Group
Encyclopedia
PA Consulting Group 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 and healthcare, government and public services, manufacturing, defence, and telecommunications. 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.
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.
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.
: 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'.
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.
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. PA expanded significantly in the United States through the acquisition of Hagler Bailly in 2000.
PA closed its consulting operations in Australia in 2007.
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/).
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.
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.
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. 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.
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.
Principal offices
PA operates worldwide; its principal office locations are in the Nordic, Europe, US, and Gulf markets (http://www.paconsulting.com/locations/).1940-1950
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
Frederick Winslow Taylor
Frederick Winslow Taylor was an American mechanical engineer who sought to improve industrial efficiency. He is regarded as the father of scientific management and was one of the first management consultants...
and Frank Gilbreth. Butten sought to take the somewhat mechanistic and task-orientated concepts of scientific management
Scientific management
Scientific management, also called Taylorism, was a theory of management that analyzed and synthesized workflows. Its main objective was improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management...
and add a human dimension to them. The chief idea, along the lines of Douglas McGregor
Douglas McGregor
Douglas Murray McGregor was a Management professor at the MIT Sloan School of Management and president of Antioch College from 1948 to 1954. He also taught at the Indian Institute of Management Calcutta. His 1960 book The Human Side of Enterprise had a profound influence on education practices...
'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
Avro Lancaster
The Avro Lancaster is a British four-engined Second World War heavy bomber made initially by Avro for the Royal Air Force . It first saw active service in 1942, and together with the Handley Page Halifax it was one of the main heavy bombers of the RAF, the RCAF, and squadrons from other...
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.
1950-1970
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 EmpireBritish Empire
The British Empire comprised the dominions, colonies, protectorates, mandates and other territories ruled or administered by the United Kingdom. It originated with the overseas colonies and trading posts established by England in the late 16th and early 17th centuries. At its height, it was the...
: 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
Recruitment
Recruitment refers to the process of attracting, screening, and selecting qualified people for a job. For some components of the recruitment process, mid- and large-size organizations often retain professional recruiters or outsource some of the process to recruitment agencies.The 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'.
1970-1992
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 GroupBoston Consulting Group
The Boston Consulting Group is a global management consulting firm with offices in 42 countries. It is recognized as one of the most prestigious management consulting firms in the world. It is one of only three companies to appear in the top 15 of Fortunes "Best Companies to Work For" report for...
and Bain
Bain
- Geography :* River Bain in Lincolnshire, England* River Bain, North Yorkshire, England* Bain, alternate name of Ben, Iran, a city- Businesses :* Bain & Company, management consulting firm headquartered in Boston, Massachusetts...
) 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
Princeton, New Jersey
Princeton is a community located in Mercer County, New Jersey, United States. It is best known as the location of Princeton University, which has been sited in the community since 1756...
, 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.
1992-2000
Between 1991 and 1994, PA lost almost half of its people, partly because of its downturn in fortunes, and partly because companies such as IBMIBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
and EDS
EDS
- Education :* Educational specialist , a terminal academic degree in the U.S.* Episcopal Divinity School, an Episcopal Seminary in Cambridge, Massachusetts* Evansville Day School, an independent college-prep school in Evansville, Indiana- Politics :...
had started to enter the consulting market and were aggressively hiring. During this time, in 1992, Jon Moynihan
Jon Moynihan
Jon Moynihan, OBE is Executive Chairman of PA Consulting Group, the global implementation-oriented consulting firm, with some 3,000 personnel operating in more than 35 countries.Moynihan joined PA Consulting Group in 1992, as CEO...
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. PA expanded significantly in the United States through the acquisition of Hagler Bailly in 2000.
2001-Today
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.
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/).
2004 National ID cards
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."2008 Confidential data stick
In 2008, PA Consulting lost a confidential data stick, prompting the Home Office to review its contracts with PA Consulting2010 FiReControl project
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.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.
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.
PA ventures
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 UbiNeticsUbiNetics
UbiNetics was a 3G wireless technology company based in Cambridge, UK, with offices in Japan, Hongkong, India and China. They had a second development center within UK at Swindon...
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
Pfizer
Pfizer, Inc. is an American multinational pharmaceutical corporation. The company is based in New York City, New York with its research headquarters in Groton, Connecticut, United States...
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. 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.