Was one more NSE necessary?
Please note: An NSE is a digital services company, formerly a computer engineering services company, is a service company with expertise in the field of new technologies and information technology.
There are countless players in the service industry, these NSEs, former IT services companies, often decried while at the same time, these ever more numerous companies continue to develop at a frenetic pace with more and more clients and captive customers. The question arises as to the motivation for launching Ekkiden in this context, why one more NSE, why want to rub shoulders again with the tough competition in the sector, and for what project? Here are a few elements of an answer.
We need to go back a few years to understand the origins of NSEs, in the 1980s and 1990s, a great technological boom, the emergence of the web and management information technology, which reached its peak in the 2000s, generating a large number of needs for specialised skills. In those years, any engineer, whether biologist or physicist, could apply for a job as a computer engineer or project manager. The demand was far greater than the skills available. Certain players in the consulting or recruitment world quickly understood the economic stakes of the sector and were able to create a model that gradually became standardised to train IT services companies such as Capgemini, Altran, Sopra, and other GFIs.
An NSE can offer a variety of services, including software engineering, technical assistance (a consultant works on a customer’s site and is billed by the day), or fixed price/managed services (in this case, the company no longer sells a consultant but a deliverable, a turnkey service).
Some take malicious pleasure in criticizing them, and yet they hire by turns, where does this inconsistency come from, are NSEs really companies that are open to criticism? And if they were, why would so many people work there and so many candidates join them?
The boom of the 2000s led to a large number of abuses in the IT services companies of the time, they had to sell, sell fast, and the NSEs were ready at any time to gain market share. It was at this time that the main excesses of the sector occurred, consultants were effectively treated like numbers, they were asked to romanticize their experiences, they changed their CVs to flesh out their experiences, they even invented certifications or diplomas. Some were hired by the dozen to meet an urgent request, others were thanked at the slightest budgetary uncertainty announced by a client.
These abuses are still present in the minds of engineers and customers, and of course, there are still players who can help these abuses to continue. For example, I have a customer who recently explained to me that he had recently sent out a call for tenders to his suppliers, looking for an expert consultant in the world of IT security. A few days after sending his request, he received several replies, and in the batch, he discovered his CV. One of his suppliers had then searched his database by entering the keywords of the requirement, he had selected this CV and he thought it was worth sending it without even reading the content or calling the candidate in question. My client then informed his supplier that he was interested in meeting the candidate he was proposing but surprisingly he never heard back from this provider… There will always be companies to do a bad job but these actors are more and more isolated. The advantage is that they allow other companies who do a good job to stand out. There is no point in dwelling too long on those players who are damaging the image of NSEs — I call them the “nuisances” — they are often small companies, which will encounter great difficulties in the months and years to come given the difficulty that players in the sector will encounter in recruiting candidates. The market, which was a customer-driven market just a few years ago, is now a candidate-driven market. Many people are aware of this, but from now on the challenge is no longer sales, but recruitment. And in order to recruit well, you will have to learn how to sell yourself and put the values of your project back at the center…
If we set aside the “pests”, those reasonably sized players who harm the image of our sector by their lack of respect and ethics, there are three categories of players: the large groups, on the one hand, these large NSEs generally listed on the stock exchange which have several tens or even hundreds of thousands of employees, there is also a whole myriad of small and medium-sized NSEs more or less specialised and finally, there are the self-employed.
If we take a closer look at the world of the self-employed, new modes of consumption are appearing, surfing on the wave of the auto-entrepreneur status, quality players such as MALT , Comet or crèmedelacrème to name but a few, accompanied by a whole ecosystem of start-ups for banking services, insurance, accounting… are energising and modernising the segment. This wave allows many talented engineers to become self-employed, and finally to be independent, to be better paid, to be able to choose their missions, not to have to account for themselves, the high life what! … In spite of the numerous articles that sell the merits of independence (Cf the articles of the talented Laetitia Vitaud on Medium for example), I think we have to put into perspective the so-called “explosion” of this sector, there are, according to what I read, twice as many freelancers today as 10 years ago. So yes, twice as many are a lot, but it is not a tidal wave as some would like us to believe. But yes, it is a fundamental phenomenon. I understand that after the abuses of the big NSEs, consultants wish to free themselves from these parasitic companies, to be better remunerated, freer, and thus become more and more self-employed, but this phenomenon leaves me skeptical for several reasons.
On the one hand, not everyone is cut out to be independent. Even if the paperwork is made easier, not everyone wants to manage the administrative work that comes with this status (and there are some!). Next, discuss it with the freelancers around you if you know any, when a freelancer wants to take out a loan to buy his home, bankers do not jump at him when he explains to them that he is self-employed! The reaction of the institutions quickly brings you back to the precariousness of your status. The same goes for social security cover, which to be effective is often very expensive, the uncertainty of your income, the payment of your bills which often depends on customer invoicing, or again this permanent negotiation which results from the status of a self-employed person, you negotiate your rate, you negotiate the duration of the assignment, you negotiate your notice period, your starting date, you negotiate with your banker, with the platform that employs you, with the end customer to have guarantees of commitment, in short. Being independent is often an adjustment variable, and not everyone is armed or necessarily wants to be in permanent negotiation. (cf maddyness article on the subject: Freelancers in the tech industry: did you say precariousness? )
I wonder about this easy criticism of NSEs who would exploit you and use your skills when they need you and then throw you out when they don’t need you anymore like they would with a simple kleenex.
And at the same time, they explain that the precarious status of freelance would be the panacea?
I don’t believe it, or at least not for the majority. Some rockstars on the technologies of the moment are sheltered, and can afford to drop any mission to find another one immediately, but how many of these rockstars are there in the number of freelancers on the market? A minority.
So if a self-employed status is not a panacea, perhaps salvation would come from the big groups?
These large groups are growing rapidly, working on their brand image, investing in their “human capital”, offering international careers, possessing an enviable number of experts and an enviable level of expertise, attracting a large number of candidates every year, and possessing innovation labs that are all at the cutting edge.
I’ve never worked for one of these large groups, so my opinion won’t be very relevant, on the other hand, I have quite a few friends who work there, these people are competent, intelligent and serious, so I imagine that it is also good in these large groups.
I say “also” because if you listen to some of them, there is mostly bad in these big NSEs. Everybody the critics, customers, candidates, employees, nobody seems really enthusiastic. And when you talk to newly employed people, few will tell you that they are happy to be there, that they are proud of their employer. Most will tell you that they have an interesting project and a good, decent salary, for lack of a better word, “it pays the rent” as one candidate recently told me.
The era of the golden age of the big NSEs in the 2000s, which hired consultants and sold services by turns, is over, as is the creativity of salespeople at the limit of ethics. On the other hand, the image of these large groups is not changing, it seems deeper. Most employees seem to be going in backward, and despite heavy investment in B2E marketing (aimed at employees), investment in employee advocacy programs or employer branding does not seem to be doing anything about it, their reputation is ahead of them.
In my opinion, the frustrations of the employees of these large NSEs come from several levels, here are a few illustrations:
- On the one hand, the size of the players, companies with 2 or 300,000 or more employees makes it impossible to have an impact on the organisation. Who can hope to make a process evolve in a group like CGI or CapGemini before long and many years in the box? How many people working in these large groups have explained to me that they were allowed to work on this or that idea and make proposals, but in the end, nothing was put in place, which was very frustrating.
- On the other hand, these companies seem to me to be financially constrained by their shareholders. And “constraints” seems weak to me. I note that listed companies have no room for maneuver, they operate with a macro objective, to respect this or that standard, to reach this or that ratio even if it means being irrational and short-sighted. I recently had a conversation with a director in a large group who told me he was completely demotivated by the organisation he was in: his management proudly announced that the annual salary increase for his teams would not be 1.2% this year but 1.4%. How can you retain and mobilize your teams with such a rare profile with such an increase package? He knew that his next month was going to be dedicated to managing the resignations from his perimeter. Resignations that come at a high price for the company, on the one hand, these recruitments have been long, difficult and expensive to make, on the other hand, these departures generate instability and demotivation in the teams and finally, nothing guarantees that we will succeed in replacing those who leave because the recruitment teams are often undersized and the recruitment market is increasingly tense. And it seems to be a never-ending process in these large NSEs. Not a great feeling.
- Another example, these large groups like to invest in internal communication, in off/on-line marketing, but forget to invest in their structure, surely because the published Structure Cost ratio has been 7% for 20 years and to increase it to 8% is not conceivable, but what to do with recruitment departments that often have an internal turnover of nearly 70% with permanent vacancies? Who can agree to work for a long time in an organisation that does not help you to develop but on the contrary asks you to do better with less when all the company’s financial indicators seem to be in the green?
- A word on the supposed growth of these large groups. It is important to read between the lines of these communications on growth, most of the time these NSEs renew and grow by external acquisition. This has the advantage of allowing them to reposition themselves in a sector quickly, and the disadvantage of breaking the dynamic of groups that are being bought out, not to mention the difficult integration on a human level of these takeovers, all the more so when they are international, too few mergers are successful in terms of team cohesion and these growth figures are misleading as to the real internal performance of the organisations.
- Large organisations are sclerotic. Who feels free to make decisions in a large NSE? Where is the sense of freedom and autonomy? What impact do employees have? In my opinion, very little. Three examples to illustrate this recently heard during discussions with senior management candidates from these large groups:
o The first example that caught my attention, the senior manager explains that in the various interviews he has, he loves to talk to candidates about their career expectations and use these elements to project these candidates, he then talks to them about training, career development, and sells them tailor-made support. When I asked him about his training budget per year outside the CPF he told me that it was capped at 10,000 € per year, knowing that he managed a team of nearly 50 engineers. Do you know how you can support engineers who are experts in their field in terms of training with a budget of 200€ per year per person? You don’t?
Another equally exciting discussion with a senior who explained to me that he had had to let two members of his team go recently. In January two consultants informed him of their resignation, he struggles to keep them and project them into the company by negotiating with them an increase, the increase was 4% for one and 7% for the other. It may seem like a lot, yes, but how much would their departure cost? In the end, the employees ended up resigning, both of them, the regional HR who had to validate their increase took 2 months to answer.
The last example of a sclerotic organisation which is a source of frustration, an office manager who didn’t have the latitude to validate a sales price outside of his objective, had managed to find a project for an inter-contract consultant, an interesting project, but the validation of the starting price which was 30€ below the sales objective took 8 weeks to be validated by the N+2 ( ! ), morality the client no longer wants to hear from the supplier, the manager is frustrated because he feels he has done a good job, and the consultant is no longer there to complain because he has been contacted by another ESN and has resigned in the meantime.
These examples are not old, they are recent and very real. Organisations such as these can only lead to frustration among teams. There is a paradox, large NSEs invest in their image, present modern companies, and attractive employers to candidates, but once in the company we realise that these groups, under pressure from shareholders, have no agility, are often archaic in their processes or tools, are often understaffed in key areas and despite the rhetoric, offer no agility in their organisation.
But you stay there in these large groups sometimes when you are an employee because the project volume is there. It has to be said that these large consulting groups have a reassuring side for large account clients. The CAC40 companies want to rationalize their suppliers at all costs, they entrust their biggest mandates to the biggest suppliers, even if they are unable to deliver, and then call on a cascade of sub-contractors. That’s the game, if I could, I would invite the major accounts to open up their supplier panel a little more widely to refresh the market a little and bring out new quality players.
The alternative for recent, smaller companies
The third category of service companies mentioned above is made up of smaller, more or less specialized companies.
In these three categories, I would distinguish between the following companies, specialized players, on the one hand, players with a broad offer and local ambition on the other hand, and finally players with a broad offer and international ambition.
Reasonably sized and specialised players, whether local or international, are suitable for consultants who wish to develop expertise, on a theme, a solution, a subject. Consultants motivated to specialize are quite rare, because specialisation for an engineer is a risk of being out of the system if the technology or solution in question were to disappear. But most companies that claim specialisation actually cover a fairly broad scope and will be able to bounce back if the market were to turn around. Usually, these companies have been created by passionate engineers and have a relatively modest development.
Then you take the players with a broad offer but with a targeted geographical ambition. These players are very attractive to those who want to be sure of working in a single region, which can be a country, a region, or even a city. On the other hand, it is not certain that the project of staying in a single city is attractive for all generations. A young graduate or a young consultant with ambition will not be attracted by an employer who promises him or her a purely local career development.
In the different models presented so far, I do not have the impression that any one of them can embody the (necessary) renewal of NSEs. And yet, in my opinion, there is one, the recent NSEs with international ambitions, which bring together the qualities of all the players in the world of service, but which also have in their DNA the genes that will enable them to renew the offer of the traditional players in the aforementioned service. And it is with this in mind that Ekkiden was created.
Tomorrow’s NSE model does not yet exist, it has to be invented.
I am convinced that NSEs and other consulting firms still have a bright future ahead of them. How do you explain that the NSEs are outdated that we have received more than 600 applications and recruited more than a dozen people in just 3 months? We have experienced less dynamism as a sector.
Clients are more and more dependent on their consultants, everything is technological, everything is data, everything is applications, the slightest internal strategic issue is linked to the information system or digital. What decision today can do without a technological opinion? Reading the inspiring article by Laetitia Vitaud (yes again, her 😊 ) on employee loyalty, we all agree that companies will need to “own” skills less and less and that calling on external skills will be even more frequent and common than it already is. Good point for the consulting world, but not sure whether this means a boulevard for the self-employed or that the future belongs to freelancers.
Freelancers represent a significant part of the consulting industry but this is not the future, for reasons of the precarious status mentioned above but also because consultants like to work in teams, they like to belong to a group, they like to bring added value to their client through offers, large projects, broad and complete skills. A man by nature needs to work within a group, the collective has meaning, this is even more true for engineers I think, who are in a context of constant technological evolution and sharing is a fundamental value.
From the point of view of the strategic partners of ESNs, the editors of solutions such as Apple or Microsoft bet on their partners, the existence of ESNs is also necessary for these large world players, Edouard Payenneville, Director of Strategic Alliances — GSI, SI & Advisories at Microsoft recently recalled in a fascinating article the fact that 95% of Microsoft’s turnover at world level and in France is made through their partners.
No doubt, we will have to count on the ESNs tomorrow. On the other hand, those who want to be in the game will have to radically question themselves. The market is no longer the same as it was 20 years ago, candidates are waiting for another type of employer, the current generation is waiting for another relationship with their company.
There are still too many NSEs who don’t know how to address these new relationships with their employees, who don’t know how to make sense of the jobs they offer. Do they wonder what impact a young graduate or a motivated employee joining their ranks can have? Do they wonder if their employees can unleash their potential by working in their organisation? Do they wonder how they can help their employees to perform better? Can they afford to invest? Do they really want to break codes and reinvent themselves? What freedoms do they have vis-à-vis their investors? Do they wonder if they have the means to fulfill the promises they make during recruitment interviews? Do they really know the reasons why they are criticised? And if so, what are they doing to make their company what their employees expect it to be?
It’s fun to ask a consultant who is critical of his company what he would do if he had the opportunity to make a difference. Do the exercise, and you will see, the criticisms are there, but the proposals are rare. Because consultants are not the right people to have an opinion on the subject? Quite the opposite, only their opinion should count. On the other hand, they don’t have many proposals to make because they have rarely been given the opportunity to express themselves, let alone the means to implement their ideas. It’s time for a change, and that’s why we decided to launch Ekkiden, not to make it just another ESN, no, but to allow ourselves to start from the same ingredients as the others, with the will to improve the recipe by adding the enthusiasm of the teams, our 6 values, respect for commitments, training and development of everyone, innovation in the managerial approach, in the processes and in our tools. Add to this an ambition without limits and we should allow the emergence of the ESN of tomorrow, the one that puts its teams at the center, that involves them from day one in its definition, its construction, its organization, that allows everyone to work on the ideas they want, that seeks to offer to mean, to its employees, to have an impact and that allows, through its modern organization and its confidence in its teams, to unleash the potential of everyone.