Managing Consultants

"An expert is someone who lives more than 50 miles out of town
and wears a tie to work."
- Bryce's Law

INTRODUCTION

The need for outside contract services is nothing new. IT-related
consultants have been around since the computer was first introduced for
commercial purposes. Today, all of the Fortune 1000 companies have consultants
playing different roles in IT, either on-site or offshore. Many companies are
satisfied with the work produced by their consultants, others are not. Some
consultants are considered a necessary evil who tackle assignments
in an unbridled manner and charge exorbitant rates. For this type of
consultant, it is not uncommon for the customer to be left in the dark
in terms of what the consultant has done, where they are going, and if
and when they will ever complete their assignment. Understand this, the
chaos brought on by such consultants are your own doing.

IT consultants offer three types of services:

1. Special expertise - representing skills and proficiencies your
   company is currently without, be it the knowledge of a particular
   product, industry, software, management techniques, special
   programming techniques and languages, computer hardware, etc.

2. Extra resources - for those assignments where in-house
   resource allocations are either unavailable or in short supply,
   it is often better to tap outside resources to perform the work.

3. Offer advice - to get a fresh perspective on a problem, it
   is sometimes beneficial to bring in an outsider to give an
   objective opinion on how to proceed. A different set of eyes
   can often see something we may have overlooked.

Whatever purpose we wish to use a consultant for, it is important
to manage them even before they are hired. This means a company
should know precisely what it wants before hiring a consultant.

ASSIGNMENT DEFINITION

Before we contact a consultant, let's begin by defining the
assignment as concisely and accurately as possible; frankly,
it shouldn't be much different than writing a job description
for in-house employees. It should include:

1. Scope - specifying the boundaries of the work
   assignment and detailing what is to be produced. This
   should also include where the work is to be performed
   (on-site, off-site, both) and time frame for performing
   the work.

2. Duties and Responsibilities - specifying the types of
   work to be performed.

3. Required Skills and Proficiencies - specifying the
   knowledge or experience required to perform the work.

4. Administrative Relationships - specifying who the
   consultant is to report to and who they will work with
   (internal employees and other external consultants).

5. Methodology considerations - specifying the methodology,
   techniques and tools to be used, along with the deliverables
   to be produced and review points. This is a critical
   consideration in managing the consultant. However, if
   the consultant is to use his/her own methodology, the
   customer should understand how it works and the deliverables
   produced.

6. Miscellaneous in-house standards - depending on the company,
   it may be necessary to review applicable corporate policies,
   e.g., travel expenses, dress code, attendance, behavior, drug test, etc.

Many would say such an Assignment Definition is overkill. Far from
it. How can we manage anyone if we do not establish the rules of the
game first? Doing your homework now will pay dividends later when
trying to manage the consultant. Assignment clarity benefits both
the customer and the consultant alike. Such specificity eliminates
vague areas and materially assists the consultant in quoting a price.

SELECTING A CONSULTANT

Armed with an Assignment Definition, we can now begin the
process of selecting a consultant in essentially the same manner
as selecting an in-house employee. Choosing the right consultant is
as important a task as the work to be performed. As such, candidates
must be able to demonstrate their expertise for the assignment. Certification
and/or in-house testing are good ways for checking required skills
and proficiencies. Also, reviewing prior consulting assignments (and
checking references) is very helpful. Examining credentials is
imperative in an industry lacking standards. For example, many
consultants may have a fancy title and profess to be noted experts in
their field but, in reality, may be nothing more than contract
programmers. In other words, beware of wolves in sheep's clothing.

Ideally, a consultant should have both a business and technical
background. True, technical expertise is needed to perform IT
assignments, but a basic understanding of business (particularly your
business) is also important for the consultant to adapt to your
environment. This is needed even if you are using nothing more than
contract programmers.

In terms of remuneration, you normally have two options: an hourly
rate or a fixed price. For the former, be sure the work hours are
specified, including on-site and off-site. Many clients are
uncomfortable paying an hourly wage for an off-site consultant. Under
this scenario, routine status reports should be required to itemize
the work performed and the time spent. However, the lion's share of
consulting services are based on a fixed price contract. Here, the
role of the methodology becomes rather important. Whether you are
using "PRIDE" or another Brand X methodology, it is important the consultant
and client both have a clear understanding of the project's work
breakdown structure, the deliverables to be produced, and the review
points. From this, an effective dialog can be communicated in terms
of managing the project. Further, the methodology becomes the basis
for the preparation of estimates and schedules.

After examining your candidates, it now becomes necessary to
balance the level of expertise against price. Sure, a senior
person can probably get the job done in less time, but perhaps
the costs may be too high for your budget. "Expertise" versus
"expense" becomes a serious consideration at this point.

Whomever is selected, it is important that a written agreement
be prepared and signed. The agreement should reference the Assignment
Definition mentioned above and any other pertinent corporate
verbiage. Very important: make sure it is clear that the work
produced by the consultant becomes your exclusive property (not the
consultant's). Further, the consultant shouldn't use misappropriated
work from other assignments. Finally, add a clause pertaining to
workmanship; that the consultant will correct at his/her expense
any defects found; e.g., defective software, data base designs, etc.

MANAGING THE CONSULTANT

The two most obvious ways to manage consultants is by having
them prepare routine status reports and project time reports. Such
reports should be produced on a weekly basis and detail what the
consultant has produced for the past week and detail his/her
plans for the coming week. You, the client, should review and
approve all such reports and file accordingly.

A methodology materially assists in tracking a consultant's
progress. As a roadmap for a project, the methodology takes the
guesswork out of what is to be produced and when. Without
such a roadmap, you are at the mercy of the consultant. Along
these lines, I am reminded of a story of a large manufacturing
company in the UK who used one of the large CPA firms to
tackle a major system development assignment. The system was
very important to the client, but lacking the necessary in-house
resources to develop it, they turned to the CPA firm to design and
develop it. Regrettably, the client didn't take the time
to define the methodology for the project and left it to the
discretion of the CPA firm. The project began and the CPA
firm brought on-site many junior staff members to perform
the systems and programming work. So far, so good. However,
considerable time went by before the client asked the senior partner
about the status of the project (after several monthly invoices). The
senior partner assured the client that all was well and the
project was progressing smoothly. More time past (and more
invoices paid) with still nothing to show for it. Becoming
quite anxious, the client began to badger the consultant as
to when the project would be completed. Finally, after several
months of stalling, the consultant proudly proclaimed "Today
we finished Phase 1....but now we have to move on to Phase
2." And, as you can imagine, there were many more succeeding
phases with no end in sight.

What is the lesson from this story? Without a methodology roadmap,
it is next to impossible to effectively manage a consultant. The
project will lose direction almost immediately and the project will
go into a tailspin. The only person who wins in this regard
is the consultant who is being paid regardless of what work
is produced. Instead of vague generalities, you, the client,
have to learn to manage by deliverables.

CONCLUSION

My single most important recommendation to anyone considering
the use of outside consultants is simple: Get everything in
writing! Clearly define the work assignment, get a signed
agreement spelling out the terms of the assignment, and
demand regular status reports.

I am always amazed how companies give consulting firms
carte blanche to perform project work as they see fit. Abdicating
total control to a consultant is not only irresponsible, it is
highly suspicious and may represent collusion and kickbacks.

There is nothing magical in managing consultants. It requires
nothing more than simple planning, organization, and control. If you
are not willing to do this, then do not be surprised with the results
produced. Failure to manage a consultant properly or to adequately
inspect work in progress will produce inadequate results. So, do
yourself (and your company) a favor, do your homework and create a
win-win scenario for both the consultant and yourself.