Getting the Most Out of Consultants on Your IT Projects

By Thomas J. Meyers, PMP

You cringe when you think about it – a project that you wholeheartedly sponsored, sticking your neck out to convince other stakeholders that it had “the right stuff,” crashes and burns just a few months after its launch.
You’re in good company.
A recent study by The Standish Group, a research firm in Dennis, Mass., indicates that project failure is a pervasive reality among IT executives, revealing that:

• Forty percent of IT projects are canceled before completion.
• Thirty-three percent of the remaining projects are "challenged" by cost/time overruns or changes in scope.
• Together, failed and challenged projects cost U.S. companies and government agencies an estimated $145 billion per year.

Why do so many projects get off track? There are myriad reasons, but one common factor is mistakes in hiring and managing consultants. Many sponsors unwittingly set their projects up for failure by not establishing clear guidelines on the front-end as to: How to discern when it’s the right time to bring in outside help, what to look for in consultants before hiring them, and how to effectively manage consultants once they’re on board.
With big money and your management reputation on the line, here’s how you can avoid making costly mistakes in working with consultants on your next IT project.

DETERMINE WHEN A PROJECT REQUIRES OUTSIDE HELP

Bringing in consultants before you’ve fully utilized your existing resources can be demoralizing to your staff. It conveys to in-house project team members that you think they’re not competent enough in their core skill-sets to contribute effectively to the project. Therefore, maintain morale by hiring consultants only when the project’s scope makes it necessary. How do you tell? Here are five signs:

1. When your company doesn’t have the in-house expertise. This is when you have no one on your core management team that has the expertise required to manage and complete the project.

2. When your company lacks the capacity to lead a new project. You may have the skill-set within your company but can’t free them up in time to address a critical project.

3. When you need to accelerate the progress. Suppose you have a new software product ready to go but the associated systems to control the sales are three months behind schedule. If you’re at full capacity, bringing in the right consultants will help you expedite the process and diminish loss of potential revenue.

4. When the project’s revenue exceeds expenditures. This is when the project will create an additional revenue stream, overcoming its costs.

5. When a project component doesn’t fit your core delivery structure. In other words, gaining knowledge in a particular area is not going to enhance your overall business model. After the project is completed, you can easily part with that knowledge because it’s not something you’re interested in carrying forward in your company.

KNOW WHAT YOU’RE LOOKING FOR

Once you’ve determined that it’s the right time to bring in consultants, how do you identify who would be a good match for your project? What criteria should you look for? In addition to the standard quantitative issues, such as the firm’s financial strength and capacity, look for the following qualitative factors as you interview prospective consultants:

1. What’s their track record? Have they done similar work before? Remember, pay for the consultant’s knowledge, not training.

2. Are they open about their failures? There’s nobody out there with a perfect track record. Ask about their projects that did not go well. When something went wrong with a project, how did the consultant respond? What steps did he or she take to salvage the project? What did the consultant learn that will make him or her better prepared next time.

3. Do they initiate a discussion on your success criteria? Look for consultants who ask you questions like, “What is your definition of success for the project? If we were to go in and do exactly what you want, what would the post-project environment look like?” If the consultant is not clear on your objectives on the front-end, expect to make several time- and money-consuming adjustments down the road to get things back on track. Define success criteria and keep it in focus throughout the project.

4. Are they concerned about what drives your business’ profitability? For example, a solution might meet the project’s objectives, but if it’s too costly, it will have a negative impact on your bottom line. Look for consultants who suggest solutions that not only meet a particular need, but also enhance your company’s overall performance.

5. What is the firm’s core competency? Say that the project involves several different components: a strategic portion, tactical portion, specific technical expertise and so forth. Find out which component the consulting company is best at, as opposed to looking for a “one-stop-shop” firm. Why? No firm can be excellent in all facets of a project. Instead, try to match the consultant to the specific project component. Or, hire a lead consultant as a “general contractor” who has access to the best coders, network designers, trainers, etc.

6. Who will you get once the project begins? Beware of a “bait-and-switch” situation. Many consulting companies show up with their top guns, and then supply the client with second-teamers after the project starts. Make sure the contract specifies who will be on your team when the project is launched.

7. Will the key consultants be around for the long-haul? This is important because what if fourteen months into your project, another project catches the consultants eye. If he or she walks, you lose 14 months worth of knowledge. Therefore, take steps on the front-end to ensure that the consultants you hire will stay with your project till completion (See sidebar).

Before you meet with candidates, design an evaluation matrix by putting four to five (or whatever the number) consulting firms names on the top with the above criteria listed on the left hand side. During the interview, jot down your observations for each category, and before it’s over, ask for a list of 3-5 references you can contact by phone to verify information. After you’ve completed the interviews and contacted references, look at your notes and incorporate a grading system (e.g. “1-10,” “1-5” or whatever works best for you) to codify how comfortable you feel about a consultant in a specific category. Then add up the scores. This way you have the data you need at a glance to compare apples to apples.

INITIATE THE RELATIONSHIP

Once you’ve made your decision on who you should contract, how do you ensure that the relationship starts on the right foot. Here are five tips:

1. Notify all team members that you’ve selected a consultant and give the reasons behind your decision. Explain to staffers about the necessary support the consultants will provide the team as a whole, acknowledging the heavy existing workload for employees. This way, you cause in-house team members to view the idea of bringing in outsiders in a positive light, cultivating good morale for the entire team.
2. Identify what their facilities, communications, and technical requirements are and line them up ahead of time. Consultants may need a laptop, software, access to key information, or even office space. When you address these requirements on the front-end, you help the consultant get off to a good start for you. Otherwise, you’re paying for wasted billable time as you scramble around to equip consultants after the meter has started running.
3. Communicate project expectations, goals, objectives, key miles stones and risks in a formal document (i.e. Project Charter) to optimize team performance.
4. Obtain commitment from all project team members before the project begins. Require that your team members, in a formal session, stand up and commit to their deliverables as outlined in the project charter. This action solidifies the team member’s resolve. Otherwise, you risk blowing the project on one or more people who lack genuine commitment to fulfill their project responsibilities.
5. Make sure that consultants understand your standard reporting processes. This is to help you assimilate the data easier, reducing chances of miscommunication that could hinder the project’s progress.

MAXIMIZE THE RELATIONSHIP

Ok, you’ve done your due diligence, finding the best consultants the project requires and getting things started on the right foot. Now, how do you manage the relationship effectively over the long-haul to keep the project on track? Here are five guidelines:

1. Cultivate a project environment in which consultants can report actual status. Reward honesty when you ask project heads about their status. If the person who’s behind is ridiculed, you’re not going to get the true status in the next meeting. Instead, provide help, guidance and additional resources (e.g. equipment, software, human capital, etc.) to get those consultants back up to speed.

2. Make consultants feel like part of the team. Consultants work best when they feel a sense of ownership and pride in the project, causing them to want to do whatever it takes to make it successful.

3. The company should put in the same effort as the consultants. Part of maximizing the relationship is managing the consultants. If the project is behind, for whatever reason, your resources need to be working side-by-side with the consultants for two key reasons: a) to ensure that the consultants have correct information concerning your internal structure and b) to manage the team as a whole to keep the project on track. If the consultants are working on Saturdays to catch up, you and the staffers should be in there working with them to make the project a success.

4. Be attentive to the project and project team. Project status reporting, maintaining schedules and other supervisory functions are hard work and take you away from performing core project activities. But if you neglect to carefully review people’s status, sooner or later, the consultant will realize it and be more inclined to cut corners or lag behind schedule – and you won’t know till it’s too late.

5. Revisit the project success factors periodically with consultants. This way, you and the consultants will stay focused on completing priority tasks, as opposed to being sidetracked by other interesting but less important activities, keeping the project moving according to schedule.

THE BOTTOM LINE

Your decisions in hiring and managing consultants can make or break a project. Therefore, do your homework on the front-end. Make sure that you have a genuine need for consultants, know what to look for, and take steps to maximize the relationship once you’ve hired them. This way, you can make informed decisions that boost your project success rates – and your company’s bottom line.

Tom Meyers is the President of PM Technologies, Inc. (http://www.pmtechno.com), a professional project management consulting firm that increases clients’ profits by ensuring that projects are completed on time and on budget.