The Good: Consultants use markup factors (amount they charge versus the amount they pay their staff) such as the following: Staff augmentation / placement only, with no management oversight = 1.5 Commodity consultants, largely staff augmentation, but with "account management" = 1.5-2 Consulting / systems integration, project-based = 2-3.5 Management consulting / very senior and high-demand specialists = 3.5-4
The Bad: The engagement partner becomes more concerned about billing you than serving you. Meetings appear on your calendar weeks before the end of a consulting engagement to discuss your statement of work renewal. You begin to spend more time managing the consultants than managing the project. Consultants justify a markup factor of 5 or 6 by saying, "We're so good, we have high overhead."
6. Balancing priorities
The Good: Complex organizations execute numerous projects every year in the context of their annual operating plans. Although consultants are hired to complete very specific tasks, good consultants take into account the environment in which they are working and balance their project against the other organizational priorities. In this way, the organization can adapt to the changes caused by the presence of the consultant while not significantly disrupting their other work.
The Bad: Meetings are consistently scheduled with little advance notice and often conflict with other organizational imperatives. Any attention paid to organizational demands outside the consulting engagement are escalated to senior management as being "uncooperative."
7. Quality of deliverables
The Good: The deliverables are innovative, are customized to the organization and represent original work based on significant effort, due diligence and expertise.
The Bad: Material is reused from other organizations. The volume of deliverables is increased with boilerplate. The content seems unhelpful, general or unrelated to the details of your organization.
8. Managing project risk
The Good: Risk is defined as the likelihood of bad things happening multiplied by the impact on the organization. Real risks to the project are identified, and solutions are recommended/developed collaboratively with project sponsors.
The Bad: There is greater concern about risk to the reputation of the consultants than the risks to project success.
9. Respect for the org chart
The Good: Work is done at the request of the project sponsors. The chain of command and the hierarchy of the organization are respected, so that consultants do not interact directly with the board or senior management unless directed to do so by the project sponsors.
The Bad: Governance processes are disrupted, and consultants seek to establish the trust of the organizational tier above the project sponsors. Sometimes they will even work against the project sponsors to ensure organizational dependency on the consultants.
The Good: Transparency, openness and honesty characterize all communications from the consultants to all stakeholders in the organization.
The Bad: Every person is told a different story in the interest of creating the appearance of being supportive and helpful. This appearance of trustworthiness is exploited to identify weaknesses and increase dependency on consultants.
I'm a great ally of good consultants. As per Cringely's article, we'll bring in a few "Consulting Type A" experts each year for specific, well-defined, tactical projects requiring deep expertise.
If survival of the fittest applies to consultants, then the good ones should thrive and the bad ones should see fewer engagements over time. However, I'm not sure Darwinian selection pressures apply to consultants, since organizations may have short institutional memories about consulting experiences, due to their own staff turnover.
The best you can do for your organization is to think about the good and bad comparisons above, then use them to evaluate your own consulting experiences, rewarding those consultants who bring value-added expertise and penalizing those who bring only PowerPoint and suits.
John D. Halamka is CIO at CareGroup Healthcare System, CIO and associate dean for educational technology at Harvard Medical School, chairman of the New England Health Electronic Data Interchange Network, chairman of the national Healthcare Information Technology Standards Panel and a practicing emergency physician. You can contact him at email@example.com.
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This story, "How to Know Good from Bad Tech Consultants" was originally published by Computerworld.