Open Insights 24: Consulting Conflicts of Interest

OPEN INSIGHTS Newsletter
Issue 24 – Consulting Conflicts of Interest
October 1, 2006

by Sean Hull
<shull@iheavy.com>
Founder and Senior Consultant
Heavyweight Internet Group

Welcome to our free monthly newsletter, discussing news, developments and business best practices at the intersection of Oracle and Open Source software.


In This Issue:

1. Feature: Consulting Conflicts of Interest
2. Audio Interviews
3. Current Reading
4. Lightweight Humor
5. Past Issues
6. Technical Articles
7. About Heavyweight Internet Group


1. Feature: Consulting Conflicts of Interest

A. Where There’s Interest, There’s Conflict.

I enjoy putting together this newsletter every month. It’s a bit like blogging, except it goes out to my list of colleagues, friends, and company associates past and present.

I’ve touched upon rates, and hourly billing in the past, but not in the context of the ironic twist that is a conflict of interest. As we all know, a conflict of interest is whenever you are faced with two conflicting loyalties. If you were in charge of hiring at a company, and were also taking a fee from the recruiting company for sending business their way that would be one. If you are giving financial advice to consumers, and also getting paid a fee by the companies you favor, that would be another big one. There are conflicts of interest in business, legal matters, or whenever you loyalties are at odds.

In consulting though, I’m talking about a much subtler conflict. Whenever we discuss hourly rates, we are putting a dollar value on an hour of time, but we are sidestepping the whole discussion about length of time. How much time?

The whole nature of hourly billing presumes you don’t have a sense of the time a project will take, otherwise you could forecast, and offer a flat fee for the project. But where’s the conflict? The conflict is that your loyalty to the client, to minimize costs is at odds with your loyalty to your small business, to drive and increase profits. Yes it’s a dirty little secret, but there it is. Efficiency is a very malleable substance. Work in an office with lots of interruptions and people talking around you, or in a cafe for that matter, you might be less efficient. Or perhaps you haven’t gotten enough sleep, or are working overtime on one project before getting to another. Do I bill for a five minute call, or roll it into forty five minutes of work later in the day? Are you checking your email while working on client work, or checking the news between tasks? Are you answering calls from other clients, or making a quick five minute call to your dentist? Anyone who’s wanted to get out early on a Friday, or before a vacation knows how efficient one can be when they really want to be.

B. Striking A Balance

Ultimately there is an amount of good judgement involved. When a client begins working with a consultant, without a history, or a glowing recommendation from a very trusted colleague, there is an element of distrust. From past experience, and dealing with an unknown resource.

The truth is after all is said and done, the client will judge what you did overall, and what it cost them for you to bring those solutions to their business. They may find themselves micromanaging your time, but this just means they need further reassurances from you that you have things under control and the project won’t unravel with endless bills, and no results.

In truth working on a project is as much about making the client happy as anything. Get too caught up in the nitty gritty of security, tuning, and problem solving, and forget about the client’s specific concerns and you will surely not win the day.

In my experience negotiating rates up front has always been an exercise in assurances and reassurances that they are reasonable and will produce results. Again and again I find clients are overwhelmingly happy with my work after the fact, and found it cost them much less than they thought it would. In technology there is so much unknown, about what the problems are, and how to solve them, that it is difficult to discern which resources will solve those problems, and in a timely fashion.

C. Stay On Your Toes

Surely clients, you should stay on your toes, do your due diligence on backgrounds, and experience. But also pay attention to the intangibles, such as timeliness, honesty and character. In the end, the success of your project will rely on trust as much as anything. Beyond contracts, and promises the relationship is your strongest insurance.

2. Audio Interviews

Ingres Chief Technology Officer Dave Dargo joins us this month in another podcast interview. We talk with him about the open-source Ingres Database, and the economics driving open-source software today. Great insights, and plenty of food for thought, so have a listen.

Do you use Open-source technologies in your enterprise? Would you like to talk about your experiences, and business successes? We’d like to hear from you. Email me at shull@iheavy.com

3. Current Reading

The Little Money Book – David Boyle

Now here’s an interesting book that you won’t be able to put down. Detailing everything from our move away from the gold standard, and causes of the Great Depression to understanding currencies, the IMF, the World Bank, and much more. Did you know that in 1975 foreign exchange transactions amounted to 15 billion, and today amount to 2000 billion? Read on to learn more.

Inescapable Data: Harnessing the Power of Convergence – Stakutis & Webster

When terms like “knowledge is power” or “time is money” are bandied about we usually think of them as true, but mostly in the abstract. But arbitrage is a real-world example of how disparities in knowledge can be very important. These two authors discuss the convergence of “data-everywhere” devices, wireless networks, and the advanced software that we’re building to rewrite the book on almost everything from financial transactions, to product tracking, and consumer feedback. Prescient material.

Naked Conversations – How Blogs are Changing the Way Businesses Talk with Customers by Robert Scoble

Scoble’s blog gets 3.5 million readers per year. So clearly when he talks, people listen. He offers tips on how to blog, and has lots and lots of practical advice.

4. Lightweight Humor

Just found this amusing humor site blaugh.com which I think you’ll enjoy. In th is strip, the search engine optimization expert is pitted against the doom-and-gloom anti-Google pessimist!
http://blaugh.com/2006/09/14/which-one-are-you/


5. Past Issues

Issue 23: Devil In The Details
Issue 22: Beware of Software Fashion
Issue 21: Open Season, Open Sesame?
Issue 20: Better Web Better Business
Issue 19: Managing Fixed Fees
Issue 18: The Cost of Consulting
Issue 17: Secrets Of The Interview
Archive: Past Issues

6. Technical Articles

Oracle 10g RAC on a Laptop: click here
Oracle9i + RAC on Linux/Firewire: click here
Migrating MySQL to Oracle: click here
MySQL Disaster Recovery: click here

7. About Heavyweight Internet Group

In a nutshell, Oracle. Everything related to and surrounding the database technology we specialize in, but specifically setup, admin and tuning of Oracle technology. I have 10 years experience with Oracle, wrote a book on the technology, and write and lecture frequently. I’m founder and senior consultant of the company. In capacities where your company might hire Deloitte, AIG, or Oracle Consulting we can bring the same level of service and experience, at about half the price. Simple equation.

Visit us on the web at www.iheavy.com.