With more than 30 years in technology consulting, I feel I can safely make a few observations about the field. The first is, alas, I'm growing old with the industry. The second is that I've had quite a lot of experience with customer/consulting relationships over the years, both good and bad, from my early days in statistical consulting to my current position in professional services management at OpenBI.
As such, I hope I have a bit of wisdom to share with InfoWorld readers regarding the recent article, "7 dirty consultant tricks (and how to avoid them)."
[ Read the original InfoWorld article 7 dirty consultant tricks (and how to avoid them) and see what the buzz is about. | Learn how to avoid IT's biggest money wasters -- and how to assemble your crackerjack A-Team for IT special ops. ]
The article takes on the consulting profession, especially IT consultants, for tricks often deployed to "extract money from their clients." Among the shady practices identified: bidding low and billing high; misleading customers about the makeup of the consulting team; dragging out projects to rack up more billable hours; and selling the latest "solutions" to customers, regardless of whether they're pertinent for customer needs. These four, along with the three other tricks identified, provide the foundation for what reads like a broad indictment of IT consulting.
As a practicing consultant who's proud of my profession, I don't feel dirty tricks are nearly as prevalent as the article suggests. Moreover, I don't see our industry as a necessary evil, but instead as a fundamental contributor to the IT ecosystem. Few companies choose to maintain a permanent IT staff with the broad range of tech expertise and bandwidth to meet unexpected user demands and new development initiatives. Consultants are essential contributors to the well-being of IT.
That said, during my career, I've seen six of the seven tricks "successfully" executed by services firms. Of course, there are some less than reputable consultancies, just as there are less than reputable customers. The biggest problem for consumers of consulting, though, derives from lack of oversight of the consulting relationship -- from the sales process to contract negotiations to project delivery and sign-off. The good news is that most of the problems are avoidable. With proper negotiation, contracting, and oversight, most dirty tricks simply go away.
Indeed, the risks of tricks two through seven can be effectively neutralized by a combination of tight contract specifications and capable project governance. No way should a savvy buying team be tripped up by consultancies that push the latest and greatest or lack the expertise they purport to have. Simple (but detailed) reference checks would expose the puffery.
Similarly, no way should a consulting company be contractually able to take hostages, accept kickbacks, or fall victim to double dipping. A standard master service agreement should protect the buyer. And no way should a contract be finalized without knowledge and approval of the top consultants to be assigned to the project, thus minimizing the B-team risk. Finally, I've seen plenty of experienced customer project managers effectively manage consultant attempts at stalling.
In fact, when I classify the tricks, I see the first, bidding low and billing high, as a greater risk than all others combined -- and not just because of shady consulting practices. Requirements known at bid time can be very different than those implemented in design and build, even when both parties act in good faith. Bid and bill may diverge for reasons other than dirty trickster consultants.
In response to the article, let me propose a turnabout that reframes "bid low, bill high" and notes six "unwise practices" that cause conflict between customers and consultants -- plus one experience-based recommendation for consulting colleagues.
Unwise practice No. 2: Evaluating prospective consultants by their hourly ratesRather than judging suitors on the total cost of consulting services to deliver a given basket of functionality, consumers are often boxed in by limits on the hourly rates of the consultants they engage. Low rates fly under the radar, while those above a threshold are often non grata, regardless of quality and productivity.
Unwise practice No. 3: Insisting that prospective consultants "prove" project ROIOur consultancy is still occasionally tasked by prospects to demonstrate the "ROI of BI," although this requirement comes up much less often than it did 10 years ago. It's a legitimate business question to ask, but it can also be a red flag that the initiative doesn't have proper backing within the firm.
Unwise practice No. 4: Expecting free, unlimited pre-sales consultingAuthor, consultant and Harvard adjunct professor David Maister offers strong advice for professional services firms: Never respond to an RFP unless you have an in-house coach guiding your sales process. While we're less adamant than Maister, there are good reasons not to be just another pretty proposal. The likelihood of an unknown emerging in the process to win a bid is practically nil, and the main competitor is often not another consultancy, but rather no project at all.
We can think of four RFPs we were invited to participate in the last year, of which we submitted one proposal. Three of the four (including the one we submitted) didn't transition to full-scale projects, but instead to either a much less grand task or to no engagement at all. The fourth was awarded to a friend of the firm from a field of 12 applicants.
Companies sometimes issue RFPs as a means to educate themselves about different solutions. They then decide what to do after reading responses, often changing their minds when they see the price tags. We recently declined a small company's request to respond to an RFP, offering instead a few hours of free consulting with our top architect to discuss options and costs. Over the course of the discussion, the CEO acknowledged his company couldn't afford the solution he'd asked for in the RFP -- but in the end asked if we'd respond anyway.
Above and beyond RFPs, it's important for busy consultancies to parcel out their presales wisdom prudently. For example, OpenBI often gets inquiries from .Net shops about open source business intelligence platforms. While we're always willing to have technical discussions with these firms, we know full well that no .Net company we've ever prospected has opted for an OSBI solution. Given that "predictive" model, it's unwise for us to invest too heavily with such opportunities.
Unwise practice No. 5: The handling of confidentiality, IP, and noncompetition termsWhile dirty consultant trick No. 4 is all about the consultancy taking intellectual property hostage from customers, my experience in small tech consultancy management over the years has been just the opposite: Prospects sometimes insist on onerous confidentiality, IP, and noncompetition clauses in the contracted Master Services Agreements that hold the consultancy for ransom.
A mutual nondisclosure agreement is the point of departure for all serious customer discussions. This is an innocuous document that very few companies/consultancies balk at signing. One recent prospect, though, asked what "secrets" we needed to protect. The answer: Plenty. We don't want project plans embedded in SOWs to be shared with other consultancies, just as customer product plans are not to be seen by their competitors. Also, consulting resumes and rate structures are proprietary, not to be used in negotiations with competitors.