Patrick Gray talks about the most common ways he's seen companies misuse money they're spending on consultants.
Having spent the majority of my career in consulting, I've seen the good, bad, and ugly all over the world. I'm likely biased, but consulting serves a legitimate and compelling purpose-the ability to gain access to expertise on an as-needed basis. However, it's easy for paying clients to forget the purpose of their consultants and burn through cash that generates little measurable benefit. Here are some of the highlights I've seen in my career.
In most cases, consultants are billing for time and materials, with each unit of time expended on a project requiring more of your cash. While some companies avoid this practice, for technically-focused projects in particular it's still the norm. While most consultants do not actively facilitate the practice, encouraging you to make expedient decisions is not in their financial interest. Each day you dally eats into your revenue, while adding a billable day to the consultant's revenue.
There's a temptation to treat consultants like dirt: they're perceived as overpriced, they won't be around long, and why invest resources in part-timers. I once arrived at a client site where the client required we use their computers to access their infrastructure. This was an eminently reasonable request, until they literally pulled laptops out of a dumpster for the consulting team. These clunkers were falling apart, and made it difficult for the technical members of the team to get their work done.
"Sticking it to those consultants" cost the company money in lost productivity. While you need not ensconce the consulting team in corner offices and provide lodging at the Ritz, provide the basic tools required to get the job done-otherwise you'll eat billed hours while saving pennies.
Buying into the BS
One of the legitimate reasons consultants get a bad rap is their proclivity for slinging bull. Nearly everyone in the corporate world has been subjected to a buzzword-laden diatribe where a self-important consultant hogs the floor without saying much of import. Just because a consultant comes wrapped in an impeccable suit and drops elaborate buzzwords doesn't mean he or she knows what they're talking about, and if you're uncomfortable with a proposal it's well within your prerogative to press for more details or a simplified (and jargon-free) explanation.
Similarly, highly specialized consultants are often billed as providing a great resource for knowledge transfer, where they impart some of their skills to your people. Knowledge transfer is a time-consuming endeavor, so if this is of value to you, budget for the activity and make sure it actually happens. While some level of knowledge transfer happens informally, if your people need critical skills from the consultants there's no harm in requesting a formal knowledge transfer, capabilities assessment, and appropriate follow-up.
Clear the road
Another great way to waste money on consultants is to allow adversarial attitudes to fester within your staff. Consultants should be engaged to solve a business problem, and if your people aren't interested in the help and try to sabotage the effort, you should treat it as an affront that should be rectified. If your consulting team is competent and you believe in the objective of the engagement, clear the internal obstacles to accomplishing the objective, even if that obstacle if your own people.
While it's easy to bash consultants and groan when you see their prices, they're an effective way to solve a unique problem and usually less expensive than building the appropriate skills in-house. Ensuring you're getting the most bang for your buck need not be tedious or adversarial, and usually just requires some cognizance and diligence on the part of the hiring party.