Over the last few years, Telkom has come under pressure for spending millions on consultants, with some industry insiders questioning the value of their contribution.
In one of the latest examples, Telkom subsidiary BCX paid Bain & Company around R200 million for cost-cutting and turnaround strategies that will not be used.
According to the Mail & Guardian, BCX’s own review of the contracts raised red flags about its negotiation, implementation, and monitoring capacity.
“So useless were the strategies Bain drafted for BCX that new chief executive Jonas Bogoshi has set them aside and terminated Bain’s mandate,” the report said.
Telkom defended the consulting work, saying it could leverage off the work produced by Bain up to the point where its contract was terminated.
New consulting contract
In the latest consulting contract, Telkom employed the management consulting firm A.T. Kearney to help with its new business efficiency program.
This programme is aimed at improving existing initiatives, tracking ongoing initiatives, and supporting the business in looking into new initiatives.
“A.T. Kearney consultancy has been brought on board, working side-by-side with our Telkom team,” the company said.
“This initiative is intended to assist ongoing efforts in the business and free up time for initiative owners to execute, while benefiting from cross-functional support and international expertise from the A.T. Kearney team.”
Why Telkom uses consultants
Industry insiders questioned Telkom’s extensive use of consultants. They told MyBroadband that these consultants seldom add value outside of what Telkom employees already know.
Telkom, however, defended its use of consultants, saying AT Kearney was brought on board to do a global cost benchmarking exercise.
Telkom sidestepped questions as to why it uses a consultancy instead of relying on internal skills within the company.
The company would also not comment on whether employing a consultancy to help with its business initiatives had previously been effective.
Instead, the company simply stated it “uses other agencies for benchmarking and market studies locally and internationally from time to time”.