Roadblock: Consultants

By Mel Duvall  |  Posted 2004-11-01 Print this article Print

What's the best way to work with consultants?

The Obstacle
Bank of America relied on outside consultants to develop its information systems. While using consultants can be critical for systems development in the absence of in-house expertise, it also is fraught with dangers. Clients can easily lose control of a project if the consultant concentrates on its own agenda–such as making sure the software they're developing on your dime can be marketed to others–or if they fail to transfer their knowledge and expertise to your staff before the consulting engagement ends.

So what's the best way to work with consultants?

The Response
Identify requirements before bringing in the consultants. Get as much information as possible from your employees prior to the hire regarding the existing systems, technology gaps and desired goals. Hold meetings to gain consensus on what features must be designed into the application. Also, prioritize every feature, so you're ready when the time comes to cut costs to meet your budget. This prevents the consultants from setting the agenda and taking the project in a direction that best suits their plans, such as maximizing engagement hours.

Seek competitive bids. Even if you have a strong preference for a particular firm because of past work or recommendations from senior executives, it pays to open up the contract to competition. "Competitive bid processes force consultants to think on their time as opposed to yours [about] how they will deliver their services," says Steve Romaine, a former vice president of transaction services with NationsBank who worked with numerous consultants on the bank's technology projects, and wrote a book on consulting called Soldier of Fortune 500. "It can also help in keeping costs more realistic and market sensitive." Competing firms may have idle workforces they're looking to put out or may be seeking an inlet into a particular industry and may be willing to significantly undercut the going rates.

Don't sell yourself out. Consultants will often attempt to broker deals that will allow them to develop a system–say, a bill payment application–so they can later take that expertise and resell it to other clients. But why should your organization do the groundwork for the competition? If an application is considered a core competency or offers a competitive advantage, guidelines that restrict future work with competitors and outline legal parameters need to be put in place to ensure the expertise isn't sold later to the guy down the street.

Make transferring skills mandatory. Complexity, or at least the illusion of complexity, can be a consultant's best ally. Knowledge transfer isn't going to help a consultant get future business, but keeping a client in the dark might. Romaine says companies need to make skills transfer, such as classroom and on-site training, an ironclad part of any contract, essentially making it one of the project's deliverables. "If they don't have skills and knowledge that can be shared," he says, "there is no reason for hiring them."

Contributing Editor
Mel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.


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