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How do you get the most value from computer software consultants?

We hire IT consultants and then watch the project scope explode and resulting costs arc out of sight like flaming slow motion Hollywood movie debris.

Miraculously, the benefit actually realized descends spectacularly like a meteor cratering in Russia. We can only identify this for sure after the total of all costs (including staff time) has escaped Earth's orbit.

We're able to consistently achieve this special effect across all technology projects and with many different vendors over a long period of time. 

We are the gold standard of IT consultant management failure.

Which leads at least me to conclude that how we deal with it is the problem.

Seriously, any ideas about how to get predictable value would be appreciated.

Did I mention our CFO and CEO are both hypnotized by shiny things? Meanwhile, our many former CTOs are forming a support group, but need to find a church with a larger basement.

 

Answers

Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

We had the same problem. Even the best laid plans would go astray as soon as someone not on the project, but high enough up on the food chain, would stumble across a consultant and 'suggest' something. We helped correct this (never 100%, but materially better), by starting developing the contract with a planning meeting. Plans are laid out, people and company responsible for each part of the project are assigned and given time frames, and measurement points are created. Then the contract is signed. The consulting company is aware of the parameters, and understands the importance of getting it right or having to answer for what derailed things. Then we would have regular (weekly) conference calls to discuss progress, identify hold-ups (people or processes), and make sure everyone was still on track with the original project. Speaking weekly with a group from both sides, opened the door to all the special items causing issues and growth of scope. Some of the higher ups who had originally suggested something additional realized very quickly what they were doing to the project and the bottom line. Similar to construction, we requested something along the lines of a change order when a project changed direction.

So... Whether "Jim" asked the consultant to put something together that he was originally assigned because he was too busy, Mr. or Ms. CEO requested a new button be added to the package, or the consulting group found an amazing solution to a non-problem, all would be discussed each week and people would have to explain why changes were made. I was very leary of adding yet another meeting to my schedule, but after the first several meetings, everyone knew what we were there to discuss and things got done quickly.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I'm just finishing up a project. They wanted a project price. I refused, and gave them this (prophetic) reasoning; the scope of the project ALWAYS expands logarithmically, and I can't give them a single price because of it.

Some projects stay more or less on course, but I have never had a consulting stint that didn't have mission creep.

One might say its the consultants fault; and they would be right only if the consultants didn't raise a red flag. Once they say "hey, this is mission creep" and the authorized person okays the new direction, its the companies fault to reign in expenses.

This all assumes the consultants performance is adequate on all phases of the project (whether in or out of the initial mission).

Sara Voight
Title: Controller
Company: Critical Signal Technologies, Inc
(Controller, Critical Signal Technologies, Inc) |

Wayne - would you have been adverse to providing an estimate for specific parts of the project? Perhaps even number of hours to put together business plan, development, implementations. This would be based upon no changes in scope between assignment and completion. I know my CEO would not accept an open ended contract where we had no idea what the costs were anticipated to be.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Hi Sara,

You hit the nail on the head, "no changes in scope". I knew (and so did the ownership; which is why they didn't argue) that the scope would expand greatly. It start to expand day 1.

Of the examples you gave, the one most likely to go awry is implementation. There are so many "gotchas" in that phase of a project that fix pricing or putting a ceiling can make a good deal bad for the consultant. Remember, most times we the consultants have no idea as to the real issues (good or bad) at a client until we're knee deep in the data.

Topic Expert
Bob Scarborough
Title: CEO
Company: Tensoft, Inc.
(CEO, Tensoft, Inc.) |

A few additional thoughts:
1) Break the project into two phases (minimum). The first phase should be writing the specification - no work to be done. Even if you have an internal specification or business requirement it may assume internal knowledge the outside folks don't have. Even if the requirement project is just a few days of effort it needs to be done. Getting a signed off document - by the outside folks and your internal leadership - defines the scope.
2) Have clear internal and external ownership of the project - including a project change management process. Deviation - for any reason - needs to go through the required project change management.
3) Acknowledge everyone has a right / obligation to say no. If you want to hold to scope, if you want to leverage the expertise of your internal and outside teams, if you want to teach your outside IT consultants that not all billed hours are good hours, everyone needs to be able to say no. This is the hardest thing for many IT consultants to do - so you may need to find outside IT leadership able to say this (see Wayne's comment about communication above).
4) Be realistic about your projects. It is amazing how often people tell each other mutually agreeable fibs. I can do this 1000 hour project in 40 - oh really, how nice :). This is an excessive example of course - but we often make cost based decisions that don't save anyone money in the end.
5) There is an old project manager's triangle and adage - the triangle has the three sides to any project (Quality, Time, Budget). The adage is 'chose the two you want'. You can't squeeze all three at the same time.
6) Have a technology change management process that assigns people appropriate roles and access, controls the technology change process, includes a quality review and code/configuration promotion to live. It may seem clever people can make changes on the fly - or that this slows things down. My experience is it helps maintain quality and budget - and in the end keeps everything manageable.

I'm ignoring political / internal strategies for getting projects done - that requires someone experienced / clever internally who can make things work. That could have it's own thread and stories ...

Bob Scarborough
www.tensoft.com

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