The Good the Bad and the Ugly: Commodity Consulting firms are a risk to your business

Post by
Scott Francis

Recently we pointed out how Holmes on Homes has something to say about choosing contractors, and how that advice relates to what we do for a living as partners to our clients. Consulting firms in the enterprise space come in all shapes and sizes. I prefer working with specialist firms.  I don't hire a general construction team to do my electrical and plumbing. I don't hire the electrician to do the plumbing either.

In our neighborhood - Intelligent Process Automation - we see the damage that commodity firms do to their customers' businesses. Their failures will cost you time and money, with great cost to agility, ROI, and customer satisfaction within your own organization. What we all often fail to factor in to the failures of commodity vendors, is that there was a real price to that lost time and wasted money. Beyond the dollars you spent on that project, the lost time represents lost value. If your project cost $500,000 and was scheduled to take 6 months, and with an expected return of $1M a year... but instead it fails with a commodity vendor, and an extension for 3 months is signed, which also fails, and then a new consulting firm is brought in to deliver, and requires a new 6 month project to deliver, 9 months at least of that ROI - at a cost of over $750,000. And you probably paid another $250,000 to extend the first project team.. .for a total cost of $1.5M wasted. Plus another $500k-ish to allow the new firm to deliver the solution.

The key takeaway is that we are all biased to be too optimistic. We acknowledge the possibility of failure but we fail to calculate the possible COST of failure. In that original project, if I had had a competing bid for $550k or $600k from a reputable firm, that extra $50k or $100k would have saved me the risk of losing $1.5M... or greatly reduced the risk that I would find myself in such a position. We should always multiply the risk by the cost to determine an estimate of value or cost.

So how do we choose a good consulting firm? One that will really take care of us, rather than just treat us as a commodity customer in the same way that their customers treat them as a commodity vendor?  Here are a few key points to keep in mind: 

  1. A good consulting firm will make sure you're successful with the products you buy. That's follow-up.
  2. A commodity vendor will blame technology when they run into trouble, and tries to move you to a different technology.
  3. A good consulting firm becomes expert in all the software they use, and all the standard kit in their utility belt. They have a real focus that they can bring to bear to help you.
  4. A commodity vendor make excuses for why things don't work the way they expect. They don't become experts. They don't invest, nor care, about excellence and expertise in the technologies.
  5. A good consulting firm will tell you, when you're moving technologies, to make sure you're also looking at the people issues involved - and make sure that the people issues aren't preventing success regardless of the technology. They'll also make sure you re-think and re-design how things are implemented on a new platform to take best advantage. They have more foresight to see the issues before they happen.
  6. A commodity vendor will take that work moving you to a new technology. They'll never worry about those people issues. They won't redesign the solution - they'll simply repeat the mistakes of the old design with a lift-and-shift - that likely won't fit the new platform very well.
  7. A good consulting firm cares about the same things you do - helping you achieve success, the way you've defined it. They have the follow-up to make sure you are getting the solution you need, and that it is working for you! 
  8. A commodity vendor just wants you to hire more bodies. If you don't know each one of them by name, and project status, those are warning signs.
  9. A good consulting firm provides leadership - even development leadership. They don't make excuses, they offer solutions.
  10. A commodity vendor just does tasks, and it is on you to pick the right tasks, describe them exactly right, assign them to the right people, specify exact due dates and interim dates, and make allowances for their time zones. And if you don't do those things, then that commodity consulting firm will have an excuse for why they couldn't be expected to deliver.
  11. A good consulting firm has the foresight to ask the right questions that reveal the answers and options available.
  12. A commodity vendor never asks ANY of those questions, and therefore can't reveal the answers and options.
  13. A good consulting firm serves their clients - because you have a duty of care to your clients.
  14. A commodity vendor has customers, because there is no duty of care, there is only a transaction.

We all are on this earth for a finite amount of time. We all want to make a dent in the universe. We all want to work on stuff that matters. When you have the chance to take on something that matters, who has time to waste on a commodity consulting firm that will blow their chance?  Hire a firm that will take your mission to heart just like you do, who will bring the focus, foresight, and follow-up to your project.

You might even want to hire someone like BP3.

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