For those who never have, the idea of hiring consultants may seem like an easy way to blitz a departmental budget with relatively little to show for it in return. This is particularly acute when you may already have employees who could do the work without any of the additional overhead. As a seasoned consultant, I would like to offer my perspective and hopefully demonstrate why cost should not be the sole determining factor.
Why would consultants be considered to begin with?
No organisation is immune from change. This is most apparent in the realm of technology, which is constantly expanding both in terms of its capabilities and its complexity. Nearly ever company on the planet relies on some form of computer-based system, and these systems gradually become obsolete over time. It is not that such obsolescence is inbuilt – no system worth its salt is designed to expire. But the ever changing demands and expectations of customers – which are, in part, driven by their own personal exposure to new technology – means that what worked in the past will gradually edge towards retirement. When that happens, an organisation is faced with the prospect of having to overhaul their systems and replace them with something new.
Why not leverage existing resources?
To be sure, an organisation could simply task their IT department with this project and expect them to run with it. But those employees already have a vital role in the organisation, and replacing a legacy system can take many months (sometimes a year or two) even without the ongoing demands that an IT department already has. A project that could have taken a multiple of months with a team focused purely on that project can end up taking years – and in that time, frustration builds, customers may fall away and when the system is finally implemented it’s highly likely that it won’t be all that new anymore. A key benefit of bringing in a consultant is that they can lead such a project, manage the workloads of the resources a company has and ensure the project is kept on track without being blindsided by other competing demands. Bring in a whole team of consultants and the work can be done even more quickly, as each member of the team is devoted solely to the project and can focus on it exclusively.
Surely an organisation could just hire a few extra staff instead?
There is theoretically no reason why a company couldn’t recruit extra people and get them to implement a new system or carry out a review of existing business processes. Expecting a group of new employees who may have limited industry or systems experience to both run and deliver a project that will affect every aspect of an organisation is not a recipe for guaranteed success, however. What is more, if the project ever does finish, those employees would likely have to be made redundant – and this could, in itself, discourage talented candidates from applying for the role. Consultants, meanwhile, are itinerant and will leave once the project has been completed.
Isn’t that just outsourcing?
On one level, this could be viewed as a form of outsourcing. Indeed, where a consulting firm has to develop a new system from scratch or heavily customise an existing one in their portfolio, they might outsource some of the code cutting. However, the project itself will be managed by consultants on site, and their role is crucial in ensuring the new system is a success. They gather the requirements, design the new system, architect it and – once it has been developed – manage the transition from old to new. This involves a considerable amount of testing, documentation, training and ensuring the project sponsors are satisfied with the forthcoming result. There is often a period of post-production support until the company is happy that they can manage things themselves going forward – at which point the project will be complete.
But consultants are outsiders, what do they know?
This is true, at the beginning they won’t know the details of how their new client operates. However, they will have undoubtedly worked on projects within a given industry before. Guidewire Software prides itself on only working for the P&C insurance industry, which means they bring with them a wealth of experience in that particular sector. Consultants arriving on day one will evidently need to go through a process of learning about their client and understanding what makes them different – but for all the differences, there are also similarities with other clients a consultant will have worked for. Not only that, but the fresh insight that is gained by bringing in even just one consultant can lead to unexpected – and usually positive – results. They are able to analyse the way a client operates now and make dispassionate observations on how they might improve their business processes. Such observations can, if acted upon, make a big difference to an organisation’s efficiency.
Is change really so difficult?
It is a simple truth in business that the larger a company grows, the more difficult it becomes to change… anything! This is not, as is sometimes cynically believed, because the old guard are all resistant to change. Rather it is just the sheer complexity of a large organisation that makes any change, no matter how small, difficult to realise. I have worked for clients in the past who haven’t been able to say how many customer accounts they have – simply because, over time, multiple systems for managing accounts had evolved and there was nothing connecting these systems together. This is by no means unusual for large organisations. But change needn’t be systems-based for it to be a challenge. Business processes are typically entrenched, largely because they are the way in which a company can reliably continue doing the same thing again and again. Changing such processes is difficult because it usually involves multiple parties in different departments – many of whom may not actively work together. This difficulty is amplified when the need for a given change has not been explained to those whom it will affect. Consultants can act as the ideal go-between in these situations, partly because of their experience, but also because they are outsiders without any perceived vested interest; there is no danger of the change being seen as one department seeking to offload responsibilities onto another. They can be good evangelists for change too, explaining how such change will not just make the organisation more productive but will also improve the day-to-day working experience of the employees the change impacts.
Are consultants only needed for big projects?
While it is true that they are more likely to be found on large scale implementation projects, this need not always be the case. Sometimes a new piece of software is purchased by an organisation and they just need some help getting started. This can come in the form of a ‘kickstart’, whereby a consultant comes on site for a limited time to get the software installed and configured. They will then demonstrate its use in meeting a selection of business requirements for which the software was originally purchased, thereby empowering the existing client team to continue the work once the consultant has left. On other occasions, a consultant may be brought in for ‘proof of concept’ (Poc) work, to help a client understand the potential a new system might offer them. Again, such work is of a limited time-frame, and it is up to the client to decide if, on the basis of the PoC, they want to pursue a larger project.
So what about the cost?
No discussion of consultancy would be complete without addressing cost. While it is true that the upfront costs of bringing in even a single consultant can be high, this cost is offset by the benefits that consultant brings. Projects can be delivered more quickly, employees can be trained more effectively and, once the project is complete, the additional financial overheads of consultancy cease. The final, delivered result will likely bring cost savings with it, usually in terms of improved business efficiency, and these savings – in the long term – should more than make up for the initial consultancy costs. What is more, the organisation is able to maintain a competitive edge over other companies in their sector, some of whom will have opted not to use consultants and may well have sacrificed their industry position as a result.
Consultancy is not a silver bullet: there may be occasions where another weapon in a company’s arsenal will be more effective. But I hope to at least have shown how and why it can work to a company’s advantage – and without needlessly sending their budgets into the red.