When I started my technical services company in Minneapolis in 1982, Analysts International was the top dog in the market.Â They seemed to have a dog in every hunt â€“ a premier sales organization.Â Fast forward 28 years, and their stock has sunk lower than the 35W bridge.Â Hereâ€™s some commentary by Fair_Witness on the AI saga purloined off of the Yahoo stock page:
Actually, it's pretty easy to track what happened (and yes, I was there.)
Analysts International, from the mid-70's through the late 80's, was hot. They almost exclusively hired long-term staff, and generally only sharp, hungry people. There was an extremely strong commitment to the employees--they kept a bench and it was rare for anyone to be terminated for anything but real cause. They had some of the most in-demand clients--Bell Labs, Motorola, Honeywell, etc.--and contracts could be measured in years, not weeks. The deep bench meant they could point to in-house long-term expertise. Stock prices hit the mid to high 30's.
There hasnâ€™t been much agreement among investors as of late as to whether Fair_Witness is calling the end accurately.
Somewhere in there, they stagnated. Even while it was clear that codeslinging was going offshore, they clung to that as the profit model. Worse, they flooded the ranks with second-tier (or worse) bodies as the pseudo-boom of the turn-of-the-century codefest seemed to make that a viable revenue model.
As changes were gripping the industry during the emergence of the Internet, they lagged, not led; conservative "safe" business practices chipped away at their margins; they couldn't demand top dollar for the degraded bench; and, of course, with the end of the codefest, the bench filled with these bodies, further draining resources.
Finally, in the mid to late 90's, they began the slaughter. They dumped bodies, cutting first fat, then meat, then bone. They shifted to an on-demand temp hiring policy vice long-term employment, meaning they didn't have persistent in-house expertise and didn't really know what they were getting off the street--and lost any differentiator that made them preferable over other consulting houses (now competing in the "bodyshop" range). This model doesn't help you get the high-margin contracts (e.g., project management, high-margin security and high-level design work), since most RFQs want evidence of prior experience and success; anything they could point to in the past was with people no longer available.
And nothing done since that time has been the kind of risky re-engineering of their approach that would be needed to re-establish credibility and capability.
This is highly condensed and simplified, of course, but it hits the main evolution of the company.