Then what do you propose is the measurement that can be applied to determine the actual effectiveness of a consulting company?
Of course, it's true that GP is not a good measure, if taken alone, of the delivered value just as revenue and signings do not necessarily make good indicators. However, if one assumes that customers are able to gauge the effectiveness of the consultancy they receive then measurements such as backlog seem reasonable indicators of success; if clients are not receiving value, they would be cancelling contracts and/or not resigning and hence backlog would start to decline year on year. In the case of IBM, their services backlog went up 1 percent year on year and sits around 140 billion USD.
Cringley's attacks always struck me as being more hyperbole than substance. If IBM was not 'delivering' as a consultancy then it's highly doubtful they would be enjoying the growth and financial success that they are since it is their Services organisations that have, year on year, been amongst the most successful.
That said, IBM has changed and will continue to change. They constantly remix their portfolio, adapt and evolve and that has been the only way they have been able to survive over 100 years and prosper at a time when their traditional competitors, such as HP, are failing. One can see how they made the transition from a hardware-led business to a services-led business as a good example of that constant transformation.
Lastly, why is 'outsourcing' necessarily perceived as a negative thing? I see IBM and other multinational's ability to move work to the most effective -- from both a cost and skills perspective -- location as a very important tool in maximising shareholder value and ensuring profitability now and in the future. It's a fact that the world is evolving and, with it, labour traditionally sourced in local markets can now be found in low cost countries and hence in order to remain competitive globally companies must take advantage of this. Unfortunately, this often leads in a rebalancing of headcount in more developed (i.e. expensive) countries and this can sometimes lead to 'layoffs' but this is a fact of life and, I think, the consequences of ignoring it would be far worse for the other employees of the company as well as shareholders and the marketplace.
Of course, it's true that GP is not a good measure, if taken alone, of the delivered value just as revenue and signings do not necessarily make good indicators. However, if one assumes that customers are able to gauge the effectiveness of the consultancy they receive then measurements such as backlog seem reasonable indicators of success; if clients are not receiving value, they would be cancelling contracts and/or not resigning and hence backlog would start to decline year on year. In the case of IBM, their services backlog went up 1 percent year on year and sits around 140 billion USD.