The $84 Million Report That Changed Nothing
In 2020, the MTA paid McKinsey $84 million for a consulting engagement. The deliverable was a set of recommendations. By most accounts, the vast majority of those recommendations were never implemented.
This isn’t an indictment of McKinsey’s analysis. It’s an indictment of the model.
When a consulting firm gets paid regardless of whether its recommendations generate results, the incentive structure is fundamentally broken. The consultant is optimized for delivering a polished deliverable, not a financial outcome.
The Report Problem in IT Asset Management
This pattern plays out at smaller scale across enterprise IT every day. Organizations hire SAM consultancies for $500K-$5M engagements that produce detailed license position reports, compliance assessments, and optimization roadmaps.
The reports are thorough. The recommendations are sound. And then — nothing happens.
Why? Because the hard part of software cost optimization isn’t the analysis. It’s the implementation:
- Renegotiating contracts requires deep knowledge of publisher pricing models, discount structures, and negotiation tactics that change every quarter
- Right-sizing licenses means navigating internal politics — someone approved those E5 licenses, and they don’t love hearing they were unnecessary
- Defending against audits requires real-time expertise, not a document written six months ago
- Sustaining savings requires ongoing vigilance through every renewal cycle
Reports can identify the opportunity. They can’t capture it.
What Outcome-Based Consulting Looks Like
The alternative is a model where the consultant’s compensation is tied directly to the savings they deliver. At UMS, this takes the form of shared savings: zero upfront cost, and the consultant is paid only from verified, documented savings.
This changes the dynamic in three fundamental ways:
1. The consultant stays to implement. When your revenue depends on realized savings, you don’t hand off a report and walk away. You roll up your sleeves and do the work — renegotiating contracts, reclaiming licenses, defending against audits.
2. The client takes zero risk. If the consultant doesn’t find savings, the client pays nothing. This eliminates the “consultant regret” that haunts so many IT engagements.
3. Incentives stay aligned permanently. In a shared savings model, the consultant makes more money when the client saves more money. There’s no scenario where the consultant benefits from the client overspending.
The Objection: “Our CFO Prefers Fixed-Fee”
Fair point. Some procurement processes are designed for predictable costs, not variable ones. That’s why flexible engagement models matter.
Shared savings works best for organizations that want zero upfront risk and are comfortable with a percentage-based fee structure. Fixed-fee projects work better for defined scopes like M365 assessments or audit defense engagements where the timeline and deliverables are clear.
The philosophy doesn’t change: the consultant should be accountable for outcomes, not just outputs. Whether the commercial model is shared savings, fixed-fee, or staff augmentation, the question to ask any consulting partner is simple: “What happens if your recommendations don’t generate savings?”
If the answer is “you still pay us,” you’re buying a report.
The Math That Matters
Consider two scenarios for a Fortune 500 company spending $50M annually on software:
Scenario A: Traditional Consulting
- Engagement fee: $2M upfront
- Timeline: 6 months to deliver report
- Implementation: Client’s responsibility
- Savings realized: Unknown (often 0-30% of identified opportunity)
Scenario B: Outcome-Based Consulting
- Engagement fee: $0 upfront
- Timeline: 2-3 weeks to first savings identification
- Implementation: Consultant-led
- Savings realized: 70% retained by client, 30% to consultant
- If $5M in savings identified: Client keeps $3.5M, consultant receives $1.5M
In Scenario A, the client pays $2M hoping for results. In Scenario B, the client pays $1.5M only after receiving $5M in verified savings. The risk profiles aren’t comparable.
The Bottom Line
The consulting industry has spent decades selling expertise packaged as documents. In IT asset management, where the savings are quantifiable and the implementation is what matters, that model doesn’t serve clients well.
Outcome-based consulting isn’t just a better commercial model. It’s a better accountability model. When the consultant’s livelihood depends on your savings, they’ll fight harder, dig deeper, and stay longer.
Reports are a means to an end. Results are the end.
See what outcome-based consulting looks like in practice — or book a discovery call to find out what savings are hiding in your software estate.