Issue 02 - Consulting Apples and Oranges

Heavyweight Internet Newsletter for Tuesday, December 07, 2004
Issue: 2

Welcome to the Heavyweight Internet Group newsletter.

From all of us here at Heavyweight Internet Group we'd like to wish you a
happy and safe holiday season.

Consulting Apples and Oranges
====================

Consulting is a big word. It carries a lot of meaning in different
business circles, mostly formed by large consulting firms. This
article will dispell some of the generalizations, and help you
find services right for your business needs.

Consultants in general terms, bring specialized help to a firm for
a duration of time, to solve specific business problems. In terms of
technology projects, a team of specialists, or in some cases a single
consultant are hired to build your technology infrastructure, or tune an
existing system.

Large or Boutique?
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When scouting out consulting expertise, the initial reflex is often to
to with a large consulting firm that presumably has a long history, and
excellent experience in your technical area. When hiring a large firm,
however, you're effectively hiring on the reputation of the firm, not
the individuals who will be sent to work with your company. Experience
and expertise can vary dramatically though, which is one way a smaller
firm can differentiate. For smaller firms, their reputation is built
on the knowledge, experience, and expertise of a small number of
individuals who you will likely be working directly with. Their
business success, and resilience in the marketplace is a direct
testament to what they can achieve for your business.

Additionally the relative size of your account to the firm you hire is
an important factor. If you are a fairly small firm, you will likely
fall
to the bottom of the pile with a larger consulting firm. However with a
small boutique firm, you are one of only a handful of their clients, so
you retain a commanding importance to them.

How about those fees?
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The discussion of fees and costs is always an important one. In real
terms, smaller boutique firms can bring your total costs down
dramatically, but how best to measure that?

Often, because of history and the example of others in the industry, fees
are based around hourly rates. A company for obvious reasons, would like
to calculate the cost of a technology project, and the presumtion is that
an hourly fee is the first step in doing so. But hourly fees take
attention away from the real question of return on investment, and often
lead to apples and oranges comparisons. One consultant may come at
a very inexpensive hourly rate, but take weeks to solve problems.
Another may bill more, but have years of experience and so be able
to spot a familiar problem quickly, and get the same problem solved
in hours or days. Hourly billing also allows for weak project scoping up
front because a consultant won't be hurt if the project drags out. In
general terms, hourly billing encourages slower fulfillment of
objectives, scope creep, and maximizes the number of discrete physical
activities.

However, focusing on the project itself, defining the scope and outlining
the project requirements up front, and then assigning a total cost to
completion, allows you to really compare two competing solutions. Some
consultants may be reluctant to assign a fixed fee to a project due to
fears of scope creep, and so on. But a fixed fee project will also
force you to iron out details up front, avoiding surprises down the
road. And more importantly it will take everyone's attention off of hour
by hour details, and focus them instead on the milestones and project as
a whole.

Conclusion
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There are a lot of factors to consider when hiring a consulting firm to
work with you. You've heard horror stories of projects gone awry, or
perhaps been on the losing end of such a project. All the more reason to
do your due diligence with various consulting shops, to find the one
which
will fit your needs. Temper the reflex to go with one of the larger
firms, and you may be pleasantly surprised at what you find.