Consulting

I’m currently working with a large retail banking client to help them modernize their payments infrastructure. The word “modernize” is used in just about every client interaction. It appears in all the slide decks. It’s part of the business case justification.

But modernization is a relative term.

The big question is: What does the client mean by modernization?

The existing system is a vendor product running in an on-prem application server. It’s an opaque monolith that is challenging to operate, and to cap it off the vendor has announced that they’re ending support in a few years so my client needs to get off this platform in order to stay competitive in the payments space.

Consider the following statement:

Our consultancy operates on a 50% margin.

Margin is how much extra the consultancy charges on top of their costs to cover the consultancy’s costs, operating expenses, and profits. Most consultancies have a minimum margin that they’ll consider acceptable when bidding on work.

But the details matter when it comes to requirements. A lot. The statement above is subtly ambiguous. How is margin calculated, precisely? I can think of two ways which make sense but result in wildly different profits for the consultancy.