Today I found out how much Accenture is billing me to the client… and now I feel sick 😩😭😭😭 the profit margins are crazy

likefunny
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What's amazing is that the 75%+ margin gets diluted down to 11% by the time it gets out to the Street...

likefunny

Precisely... we use our internal margin calculation to load our projects (i.e. capital charges, administrative overhead), but that doesn't include all the S&GA (i.e. marketing, corporate finance, R&D), interest, taxes, depreciation, and amortization costs on the income statement, which all dilute our net income / margin.

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Not just you and also partners’ private jets too..you have to take that into the equation as private jets are absolutely critical for their survival

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That’s what I figured. And honestly, ppl should realize sometimes private actually does make more sense.

My last company had two private jets that flew every couple days to our regional offices. Was great to be able to get on, fly out for a day of meetings, then fly back that night. Also a heck of a lot safer than driving 4-6 hrs through the middle of nowhere.

Point is, would you really want your C-suite/key execs milling around for hours in airports? Highly unproductive time at an hourly LCR I wouldn’t even venture to guesstimate as I’m sure the number would make me ill.

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If you feel underpaid, feel free to start your own firm and sell directly to your clients

likesmart

You’re COGS, and those numbers are gross margins; gotta cover all that opex and G&A baby. 😅

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Totally agree, and this Accenture machine is well oiled 🤣👏🏿

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What are you exactly? An anti-profit socialist?

likefunny

OP, are you sure you are in the right career?

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What's your LCR vs TC? There will always be a big difference, as Accenture (and any consultancy) has to pay for overhead in other non client-facing areas (e.g. HR).

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Total Compensation (base + bonus + cash equivalent benefits). I believe these are included in the LCR.

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When I was at Accenture, talking about our rates was taboo. At Slalom, it’s a regular KPI we track, which is crazy interesting to me. Weird how Accenture tries to keep those rates so secretive

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That’s what we charge the client per hour so would that be different than LCR?

I get where you're coming from (I used to think the same as an analyst), but this is not quite how any of this works:

"Your" bill rate is not your own. It covers all sorts of stuff, including ...

1) Items that are also part of your personal cost rate ("load factors"). These account for such stuff as your company equipment, office space, corporate functions services, what it costs to train you, time your practice leadership and PL invest in you, etc.). The internal cost rate that your project pays for you is already significantly more than what you get paid directly.

2) Items that are not part of your personal cost rate as per the system but that the billings you generate still help cover (typically, project or account level non-billable cost). These may include (but are not limited to): non-billable expenses, account-internal PMO cost such as our CFMs, account PMO, non-billable leadership function, senior colleagues whose bill rates may be more in the line of 0.95% of what we bill to the client, plus other factors depending on contract (e.g. inflation if not covered by the client), etc.

In summary: "your" bill rate is not really yours. It's the bill rate of you + a share of everyone who's needed for you to do your job.

likehelpful

Relative to pt 1-
Like delivering our silver / gold security courses in completely useless cartoon / video game formats ... 😬

Or an extra monitor which has to be budgeted for a project, because why not... make everyone work crazy hours with stuff that can be halved time-wise just by having an extra monitor.

Welcome to the leverage model of consulting

likeuplifting

Yep I worked in finance at a big 4 - they will pay a consultant $100k a year then charge the client $600-700k a year for that resource.

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We get nothing back

😆

What’s your bill rate ? What’s your level?

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