If you could stack up the pay stubs of the people staffing most IT shops you’d likely find several or even dozens of different companies on the header, with everyone from standard company employees and software vendors to consulting companies. Consultants in particular often bring specialized expertise related to a particular project or endeavor ranging from technical knowledge to anything from organizational restructuring to complex strategy.
Having been a consultant in firms that employed between three to more than 200,000 employees throughout my career, I realize that consultants elicit strong emotions, and can be loved or loathed for bad behaviors that are both real and imagined. However, it’s nearly impossible to run a complex, modern IT shop without outside help, and if you’re going to engage consultants, you might as well get the most value from that relationship.
Too often, companies assume that they’re done with the value equation once fees are negotiated and Statements of Work are signed, but they’re often leaving value on the table.
SEE: Vendor relationship management checklist (Tech Pro Research)
Structure the relationship for success
Depending on the project at hand, there are different ways to structure a consulting relationship. If you’re looking to augment your staff with some commodity technical knowledge, you’ll likely seek and ultimately structure a relationship very differently than if you’re looking for help crafting a long-term technology strategy that’s going to the Board. Hire a high-end firm for bodies, and you’ll overpay, just as hiring a body shop for your strategy will likely end with substandard results.
Depending on the work, many firms will allow for pricing well outside a traditional time and materials type of billing where you pay by the hour, ranging from fixed fees to outcome-based billing where the consulting company gets paid based on the results of the project. If you’re looking at a bet-the-company project where success is critical, look for options that align the consulting company’s interests with yours, where both entities share in the rewards.
Leverage “the club”
While few consulting companies explicitly mention it in their marketing, once you’ve agreed to a relationship to some extent, you’re now a member of that consulting company’s “club.” As the old commercials said: “membership has its benefits,” and depending on the consulting firm those benefits might include everything from access to research and publications or access to industry and technical experts, all the way to visits to non-competing clients.
Some of these benefits are relatively obvious. Even as a three-person firm I’d publish whitepapers and research that I’d share with clients, and the large firms happily flood your inbox with hundreds of papers and videos. Where things get more interesting is when the larger firms are happy to bring in experts in your industry or technical environment, even if it’s unrelated to the project at hand.
SEE: Vendor contract renewal planner (Tech Pro Research)
If you’re considering a new technology, trying to understand a new trend, or wondering how changes in the industry might impact your company, ask your consulting firm if they have anyone that would be willing to speak about these topics. Most are happy to get an expert on the phone, and in many cases get someone on-site or even get you to a symposium or event related to those topics.
Most consulting firms also have their own relationships with universities, think tanks, and external research groups that they’re happy to share with clients. My current firm has some great partnerships, and I’ll gladly take clients to all manner of events as a freebie.
Finally, even small firms generally have a portfolio of clients that will include companies facing similar challenges and are happy to facilitate introductions or even site visits to clients that don’t directly compete. This not only can help your professional networking, but can also get you an insider’s look at companies that are larger or smaller, in completely different industries, or have a novel approach to solving a technical or business problem. Once again, the “cost” is little more than an email to make the request and a plane ticket.
From the consulting firm’s perspective, all of these activities deepen the relationship and hopefully cement their position as the go-to firm when you’ve got a challenge that requires external help, so they’re certainly not showering you with benefits out of the kindness of their hearts. Depending on your needs, the availability of the “benefits of membership” may be a factor in which firms you build a relationship with.
SEE: IT leader’s guide to optimizing vendor relationships (Tech Pro Research)
Give and get
Like any interpersonal relationship, there’s a natural give and take. If you beat your consulting firm up over rates, change firms on a monthly basis, and show no understanding whatsoever when challenges arise, you’ll likely find your partners show little willingness to shower you with extra benefits. Similarly, if you’re eminently reasonable in negotiations and treat your consulting firms like partners rather than hired help, but get little in response beyond what’s in the contract, it may be time to look elsewhere.
Ultimately, there are often significant benefits beyond just what you’ve hired your consulting firm to execute. Often, the only price of admission is asking.