Employing IT Consultants’ Expertise

March 1, 1999

Even intoday’s rapidly changing world, it is reasonable to expect a computer systemto last at least five years. In fact there are many systems (you may have oneyourself) which have lasted ten or more years without changing significantly.

Buying or developing new computersystems is something you may do only at widely spaced intervals, in which caseyou are unlikely to have within your own firm all the specialist knowledge andexpertise to do this successfully. You may therefore be well advised to seek theassistance of a suitable IT consultant.

The aim of this article is tohelp new and previous users of IT consultancy to maximise the benefits of usingtheir consultants. It outlines reasons for using a consultant and what they can(and cannot) do for you, offers advice on selecting a consultancy to use andexplains how to manage the consultants.

Planning the Use ofConsultancy

Defining the job

Any major change to your systemscan be thought of as a three-stage process:

  • Planning – identifying what you need your systems to do to support your current and planned future business, and how best to change your systems to meet these needs. Planning may range from a few minutes’ application of common sense (`I need to use a single-user accounting package instead of preparing my accounts on a spreadsheet’) to an IT strategy project lasting several months, which defines a three-year plan for development of a firm’s IT facilities.
  • Procurement – obtaining the most cost-effective and least risky solution to your business needs. Sometimes this will involve developing systems within your own firm; more often, especially for small to medium-sized practices, it means purchasing computer hardware, software and services from one or more suppliers. The endpoint of the procurement stage is marked by formal agreement of contracts between a firm and its IT suppliers.
  • Implementation – is often the most fraught stage of an IT project. Typically, a number of activities including technology changes, system set-up, data conversion, user training and system testing have to be undertaken in parallel, within strict time and cost constraints.

Why use an IT consultant?

You may want to use an ITconsultant to provide any or all of the following:

  • an independent and objective view from someone who has experience and credibility – even if your firm has a clear view of the way forward, management may want the added assurance of an external consultant’s view to confirm or challenge this
  • particular skills and experience which are not available within your firm – a small to medium-sized practice may need to buy in basic IT or management skills, whilst a larger firm with its own IT function may still need IT procurement skills or specialist technical expertise
  • additional resource for a limited period of time – it may be that the firm has the skills to complete a project in-house but cannot spare its own employees’ time from their line-management roles.

But consultancy assistance doesnot come cheaply and you will need to ask what benefits you anticipate the useof consultancy to bring to your firm to justify the cost. So having decided thatthe consultant route may be for you, the next step is planning what you want theconsultant(s) to do.

Define the problem and assessthe need

The best consultants are those that come in, achieve the objectives you have set, and go away.

Like any other service provider,IT consultants are likely to provide better value when they have specificobjectives or ‘terms of reference’ to meet. The best approach is to define aproject, which the consultants will undertake as a joint exercise with yourfirm’s staff. The advantages of using a project approach are that theconsultants’ involvement and their results can be clearly separated from yournormal business and the disciplines and techniques of project management can beused. Also, projects end! The best consultants are those that come in, achievethe objectives you have set, and go away. If your consultant carries on with noendpoint, he or she effectively becomes a very expensive employee.

If the project affects more thanone part of your business (as most do) it should have a Steering Group – agroup of senior managers representing each relevant part of the practice whichis responsible for defining the project and then monitoring its progress throughto a successful completion.

The consultants’ terms ofreference should clearly state the project’s:

  • objectives – what business outcome is the project meant to achieve?
  • scope – which aspects of the firm’s business and systems are to be considered?
  • deliverables – what tangible end products should the consultants produce?
  • timescales – by when should the project be complete?

Crucially, the roles andresponsibilities of the consultants and your own staff should be defined andagreed up front.

Defining terms of reference foran IT consultant is not easy – unless you are an experienced user ofconsultancy you may well want the consultant to help! There is nothing wrong inthat, as long as the consultant covers the points noted above in language thatyou can understand and agree with.

Buying Consultancy

The selection process

The steps to take when choosing aconsultant include the following:

  • Draw up a list of potential advisers.
  • Make initial contact to establish who might be interested in tendering for the work and who appears from a brief discussion to have suitable expertise.
  • Invite a shortlist of two or three consultants to submit a written proposal for the assignment. It is in your interest to allow the consultants to prepare a detailed and informed proposal so you should invite the consultants to visit you and your offices and make available some time for discussion. This will also give you an opportunity to meet with and assess the consultants.

Depending on the size of theassignment and the way that your firm operates, it may be effective to invitethe consultants to make a presentation to the Steering Group. Presentations areincreasingly common as a basis for deciding on the award of a contract.

You would also be well advised totake up references with the consultants’ other clients. Make sure that thereference sites used the same individual consultants as are being proposed foryou, not just the same firm.

Which consultants should youuse?

There are several types of ITconsultant you may consider using, each with its own pros and cons.

  • Self-employed individuals are often the least expensive option, and may be no less able than employees of the largest firm. (In fact, many are ex-members of these firms.) However, you get what you pay for! If a consultant is offering to work for, say, £300 per day, then you should ask yourself why that person cannot command a higher rate.
  • Small local firms again may be competent but inexpensive. As with self-employed consultants, the caveat about low rates applies and you should be careful to take up references.
  • Niche firms specialising in your particular business area are well worth considering. If your project will involve specialised technology then you need a consultant with experience in the field, not one who will be learning on your time. Rates are likely to be somewhere in between the small local and the large national firms.
  • Large firms dominate the consultancy market in terms of revenue. The Big 5 accounting firms and many IT-based PLCs have consultancy practices with hundreds or even thousands of staff. Such firms have great range and depth of expertise, and reputations which can be reassuring for partners and bankers. However, their rates are higher than the rest, and not all of their consultants are equally experienced.

Selection criteria

In selecting your consultants Isuggest that you should consider the following criteria.

  • Independence You should ensure before proceeding that the prospective consultants are able to offer truly independent advice. You must ensure that they are not tied or linked to any hardware or software supplier that you may be considering.
  • Relevant experience You can establish whether consultants have previous experience relevant to your particular circumstances by asking for examples of their previous assignments and taking up references. It is not sufficient that the consultancy firm has relevant experience – you should also check the CVs of the individual consultants who are to work for you. You should also discuss their experience when you meet the consultants to establish how relevant it is to your requirement. You should beware of consultancies that send very credible people to visit you and prepare a proposal but then send more junior staff actually to perform the assignment.
  • Personal characteristics Depending on the scope of the assignment you may be working with the consultants for quite a long period of time so it is important to meet consultants to ensure that you have or could develop a rapport with them and that they appear credible to you, and you believe that they will have credibility with your colleagues.

    Hourly fees without limitation should not be agreed: at the very least there should be a pre-estimate of the time that will be involved, and the various key milestones needed to complete the project with assigned dates, and one or more ‘cost ceilings’ which are only exceeded with your express prior approval.

  • Communication skills An essential part of any consultancy assignment is the need for the consultants to communicate their ideas clearly in language that you can understand. Without this ability the value of the consultancy assistance will diminish. Communication skills can be judged by meeting with the consultants and by reviewing the proposal submitted. These are likely to be indicative of later products to be delivered by the consultant.

The final selection

You may be surprised that costdid not appear on the list of criteria – this is deliberate. You should firstidentify one or more consultants which:

  • satisfies all criteria above to your satisfaction
  • appears to understand your requirements
  • has a sensible approach towards solving the problem which has been clearly explained
  • states clearly what work will be done when, by whom and at what cost.

Then and only then should youthink about value for money, and make the final selection accordingly.

Consultancy fees for theproject

In practice, fee rates varybetween about £400 per day up to £2,000 a day or more.

Agreed fees should aim to pay forresults rather than effort. Hourly fees without limitation (known as time andmaterials or ‘T&M’) should not be agreed: at the very least there shouldbe a pre-estimate of the time that will be involved, and the various keymilestones needed to complete the project with assigned dates, and one or more‘costs ceilings’ which are only exceeded with your express prior approval.

A good alternative is tonegotiate a price for the work without reference to the time actually spent oncompleting it (known as ‘fixed price’). There might be agreement thatdiscussions can be re-opened in the event of unanticipated difficulties. Even ifyou have a fixed price contract, you should insist on time estimates and aschedule of milestones. This will enable the project to be managed effectivelyand will also enable you (pre-contract) to assess the consultant’s capabilityof meeting his/her targets.

Using Consultants Effectively

Having selected and engaged yourconsultant it is now important to obtain the maximum benefit from yourinvestment. You must be prepared to work together in partnership with theconsultant, to ensure that each hour of his/her time is used as effectively aspossible.

Before commencing theassignment

Before commencing work you mustensure that you and the consultants share an understanding of the scope of thework involved, the team that will be involved and their responsibilities, thetimetable and the cost. This is generally done in a formal manner with theconsultants by agreeing terms of reference as part of the proposal and selectionprocess.

Someone within the firm will needto manage the assignment. Depending on the nature of the assignment he/sheshould be sufficiently senior to provide initial approval of or comments ondeliverables to the consultants, arrange meetings, etc. This role will require aconsiderable amount of time and should not therefore be given to someone whowill not be able to give it sufficient priority. The need for a Steering Groupand a Project Manager, discussed earlier, is best considered before theselection process begins.


Off-loading is not an option –the firm must own the project. There are many firms whom regard the appointmentof consultants as a problem now dealt with. The converse is often the case. Theinvolvement of consultants in any area will probably increase the amount ofattention required by the owner of the project.

Clear agreement should be reachedon what each party must do to achieve the required objectives. This illustratesthe need to agree the terms of reference up front. The time to explain thecommitment from the managers of the project is when the assistance is stillbeing agreed, not subsequently. Ideally this should be recorded in the contractwhich is drawn up and then brought to the attention of any managers who arelikely to be involved.

Ongoing communication anddebate

Once the assignment is inprogress – there must be ongoing communication and debate. Regular meetingsmay be required on a weekly, fortnightly or monthly basis (depending on thescale of the assignment) to:

  • review the work performed to date and any interim reports submitted
  • check the progress against the projected timetable
  • resolve any difficulties encountered by the consultants
  • discuss findings
  • agree the next steps to be taken and set deadlines for the steps.

In addition to these formalmeetings, ad hoc liaison with the consultants can help to resolve difficultiesand progress the assignment without waiting for the next formal meeting.

Remember that you are paying forthe consultants’ time and it is up to you to make the most of this time.Ensure that the consultants do not need to be involved in basic data collectionor project administration. Make sure that your colleagues are providinginformation requested promptly and are not keeping the consultants waiting formeetings.

Completion of the project

It is important to complete theproject properly to ensure that the original aims are achieved. All thosemembers of staff who need to be aware of the consultants’ conclusions andrecommendation must be properly informed. This could be done by issuing summary,or even full, reports or by briefing or presentation sessions. It may beimportant for the consultants to perform the briefing to enhance the credibilityof the conclusions and recommendations and to allow questions to be addressed tothem.

When the consultants’recommendations require further action to implement them it is important thatthe momentum is not lost and that there is an effective transfer of skills andknowledge to in-house personnel to provide continuity and avoid loss ofconfidence when the consultants depart. This may be done by retaining theconsultants’ services on an ad hoc basis or by detailed briefing sessions.

The success of the project shouldbe reviewed against the original aims to identify what went well and what couldbe improved on, both within the firm and by the consultants. This can be aninstructive learning process, which can assist with the next project that is tobe performed.