Consultant Coup Brewing at the Heart of the "Big Six"

With every new project, Andersen Consulting's power grows, challenging the influence and authority of Arthur Andersen auditors. Though the money is good, the audit side-stuck in a mature, flat market-has seen the writing on the wall. Auditors can't compete with the new and growing revenue streams that their "peers" in consulting are tapping-like mega-outsourcing contracts with J.P. Morgan and CoreStates. The auditors, who have subsequently launched their own consulting services, are going to be usurped, or they will be deserted, say sources. "Andersen Consulting is going its own way whether people like it or not," adds Tom Rodenhauser, editor of Consultants News.

What keeps Andersen Consulting tied to Andersen Worldwide, says one industry analyst, is the exit fee. The "poison pill" is that the consulting partners have to pay Worldwide 1.5 times the consultancy's book value to win independence. Andersen Consulting's only other way out is if a GE or British Telecom were to acquire them.

But until feuding and internal competition turn off clients, neither side is likely to do anything rash, sources say. Nor can they, because the disharmony seems to be scuttling any new industry partnerships (read: foiled merger discussions with Deloitte & Touche).

And as the rest of the Big Six focus their efforts on growing their consulting arms, friction between auditors and consultants will spread like the plague.

You know what would really

help the Mondex-Visa Cash smart card pilot on Manhattan's Upper West Side? If the merchants actually knew that they were participating in it.

According to local residents, the cards, sponsored by Chase Manhattan Bank and Citicorp, may be smarter than some of the persons manning New York's cash registers. When one consumer asked a local grocer if she was taking the card, she responded point blank, "No." When the consumer pointed to Mondex and Visa Cash emblems proudly displayed at the register, she reversed her position, qualifying acceptance with a purchase of goods worth $10 or more. Determined, the consumer explained that that stipulation was inherently flawed for a micropayments cash card. Finally, the grocer smiled with understanding, looked over to the Citibank branch directly across the street, and said that she did not have her equipment yet. Some merchants were a bit quicker: Unfamiliar with the stored value schemes and realizing their limitations, they refused to take the cards because their brand-new, just-out-of-the-box equipment was "broken" or could not be used without the presence of a supervisor.

They're shouting hallelujah in Orem, UT. Novell has found salvation in Java. Eric Schmidt, Novell CEO and father of the Sun Microsystems programming language, has converted his company as part of a strategy to shore up its hemorrhaging bottom line-the result of NetWare's declining sales. Rejecting all merger rumors, Novell's corporate development svp Christopher Stone says, "We're applying the tourniquet and healing fast."

By Java-tizing its core competencies in directory and network management services, says The Yankee Group's Allen Bonde, Novell comes back into the game.

-bers tfn.com

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