Shopping for IT Consulting Boutiques

Computerworld - CIO Jean Delaney Nelson learned important lessons about using small "boutique" consulting firms from a mistake she made 10 years ago. When Minnesota Life Insurance Co. was moving to client/server computing, Delaney Nelson signed a contract with a small consulting firm to advise on the overall strategic shift as well as the implementation details. But the firm just wasn't up to doing both jobs.

"We learned that boutiques work better in a specific, defined way, like when you're asking, 'What's the best tool to do this particular thing?' " Delaney Nelson says.

So when the insurer recently had to choose between Java and .Net for its Internet development platform, Delaney Nelson lined up outside advisers like Gartner Inc. for an evaluation of the two platforms and then turned to a small, regional consultancy to develop a detailed training plan, specify architectural components and choose the most appropriate development tools.

CIOs today aren't afraid to use such specialized consulting firms to gain extra depth of experience in IT niches or vertical industries. In fact, consulting specialists are favored over generalists by midsize clients with revenue between $10 million and $9 billion per year, according to research by Kennedy Information Inc., a Peterborough, N.H., firm that analyzes the professional services industry. (Larger clients prefer one-stop consulting shops because their needs are more complex, the research indicates.)

"A decade or two ago, no one got fired for hiring McKinsey or IBM. Now, bigger is not necessarily better," says Jess Scheer, executive editor at Kennedy Information.

But it's important to learn when to use boutique consulting firms and how to manage the risks.

The Right Fit

The most important thing is knowing when a boutique is the best choice. The main indicator is when you need depth -- not breadth -- of experience. Three years ago, Janet Burns at The New York Times Co. cast a wide net when she needed help writing a project management methodology and training IT workers in that methodology. Ultimately, Burns selected Project Management Solutions Inc. over some larger contenders.

"It was important that we chose somebody who was 100% project-management-focused and could have an immediate impact," says Burns, director of project management for corporate IT. "With a larger firm, it seemed like something they were trying to add to their list of services."

Boutiques can also help to speed up a project. "Many small firms are agile, and because they have a lighter management process, that can make the project go faster," says Jason Glazier, chief technology and e-commerce officer at Lincoln Financial Group, a $4.6 billion provider of life insurance, retirement products and wealth management services in Philadelphia. But there's a flip side: Sometimes this same lack of a strict development process means the boutique can't handle the rigors of a bigger project.