TechRepublic occasionally offers case studies and success stories from IT consultants. These articles will explain the assignment, provide an overview of the methodology used, discuss the process for delivering the solution, highlight cost savings and improved efficiencies, and finally, will reveal lessons learned and give advice for fellow consultants. Here, one IT pro shares his efforts to help a client choose an affordable e-commerce solution.
I was recently retained to help prepare an e-commerce strategy for a brick-and-mortar specialty retailer and manufacturer with $300 million in yearly revenue. The president, newly hired and inexperienced in that industry, wanted to make his mark, and, perhaps more importantly, deliver on his promise to the board of directors that the company should get on the Internet bandwagon.
The client’s business strategy made sense. They could use Web technology so customers could avoid the morning crunch at stores, avoid out-of-stocks, save time, and inquire into the status of their accounts via the Web site. The bonus to my client would be a jump on the competition while saving time for an overburdened sales and administrative staff.
My first task was to interview the company’s key managers. A consultant does this not only for needs and requirements but also to poll them for their commitment to the project and to look out for any warning signs of possible political trouble ahead. After meeting with the directors of distribution, marketing, and manufacturing; the CFO; the board members; IT staff; and the president; I drew these conclusions:
- The Web site’s integration to two distinct legacy systems would be very difficult.
- Even key managers didn’t understand the Internet or believe in it as a technology appropriate for their “get-out-and-press-the-flesh” type of business.
- From a project management perspective, there was very little talent available in the organization to help pull off this project.
- The board made decisions based on ROI rather than justification for new IT investments through achievement of strategic initiatives.
A stroke of good fortune
At this point, I voiced to the president my concerns regarding the feasibility of a complex Web development effort at his company, but he urged me to press on. I put together a strategy document and summarized it into a request for proposal (RFP) to show him the budgetary numbers.
While investigating various providers, I came across a similar company with a great Web site that did all the things my client wanted theirs to do. In fact, the other company had an informal business alliance with my client, and offered a test logon so we could check out their site. The more I looked at it, the more I realized it had all the key components my client wanted but none of the “blue sky” features we’d discussed. The other company was located in a geographical region my client didn’t serve, so I thought they might be willing to share their experiences on implementing a Web application. Even better, my informal inquiries suggested the other company would be willing to sell their design for a nominal price.
I was excited because this was a ready-made specification, a prototype, and a complete picture of what they needed and wanted. It would take many man-days of definition and consensus building, by comparison, if a custom development team was to begin with a blank sheet of paper.
We looked at the tier-one vendors and lots of technology platforms in the e-business space. We found solutions that were impressive but also expensive. After a very slick presentation, the client initially wanted to go with a packaged technology solution. With a quote of $2 million, I knew that could mean another 25 percent in cost overruns. The client clearly didn’t need all the bells and whistles like click streaming, cross-selling suggestions, and sophisticated cross-tabulated customer reporting to personalize sales to customers. Even if the company ended up investing all that time and money, we couldn’t be really sure that customers would like dealing with a Web site or if the client’s business objectives would be met.
I’m not sure it was the shocking prices or my persuasiveness, but after arguing my case that a sophisticated packaged solution was not a good value for their first e-commerce venture, it was decided that we would choose a vendor that could offer a custom solution with less expensive basic and mainstream technology. The estimate we got from those second-tier solutions ranged from $500,000 to $1 million.
In the meantime, I also asked a boutique Web development firm with great references to look at the other company’s site in detail and to give me a bid on developing it for my client. I stipulated that they use the same basic technology as the other vendors. They came back with a fixed $200,000 bid. I was sure my client would appreciate how much I had saved them when I showed them the less-expensive solution.
Share your thoughts
When your client balks at your advice, what’s your reaction? Do you walk away from the project or try to help them best implement the solution they’ve chosen, even if you think it’s a poor choice? Post a comment below or send us a note.
Expensive isn’t always better
When my team and I met with the client to discuss our recommendations, the president and director of marketing made it known that he wanted to go with the $500,000 bid, and when asked, I presented my case for going with the $200,000 bid. I argued that even if we had to throw out the whole effort a couple of years later, beginning with a prototype design was less risky and would offer some very valuable returns, including the following:
- We could prove the whole project’s concept before investing everything in the budget.
- We would gain valuable insight to overlooked details that can become crucial.
- We would have a prototype design, a picture, and a concrete specification upon which to begin and against which we could measure progress.
The client did not take my advice, hired the more expensive custom Web vendor, and I moved on to another project.
Six months later, I was called back in to evaluate what went wrong. Of course, that $500,000 bid turned into endless sessions spent haggling over specific requirements. As time went on, the client started wondering why they were doing this project in the first place. The team, pressured to deliver something, cut back on the project scope. Even with the reduced scope, the project’s revised budget is expected to exceed $1 million. That’s more than a thousand man-days over the estimate.
Even with all the advances and changes in technology, people are still the most important component to consider in any system implementation project. Communication can make or break the effort. Over the years, I have increasingly found it more effective to use charts, pictures, graphs, and prototypes to get the message across.
My advice to other consultants and managers leading a systems project would be:
- If possible, use a prototype to test all of your concepts.
- Insist that vendors proposing solutions demo their solutions, even if they’ll bill you to do so.
- Follow up key decision points with a short memo or e-mail confirming what was decided.
- Even consultants may need to build support for their ideas and suggestions prior to presenting their recommendations, so take a reading during your work.
- Make a list of your basic assumptions when you propose a solution to your clients.
- Don’t assume your advice will always be taken, and if it isn’t, never say, “I told you so.”
As bad as it is having a client not take your consulting advice, it is comforting in the end to have them call back later saying they wish they had.
Peter Royers is founder and president of Applied Logic, a consulting practice in Irvine, CA. During his 25 years in IT, he has held positions as IT director/CIO and senior manager of an international consulting firm. Royers writes and speaks on a variety of IT strategy and management consulting issues, focusing on maximizing the business value of IT. He holds a B.S. from California State University and also attended Arizona State University.