It would only be natural when you're looking to hire an information technology consultant to focus on the consultant's skills as a systems designer or software architect. But that's only one part of what's needed to succeed on an application development assignment at a major insurance firm.
Just ask Chip James, AVP for information technology at Columbia, S.C.-based Colonial Life. "A big part of any IT consultant's job is interacting with the team and being able to communicate with the team," James says. "One person we hired was a technical rock star, but he was going around dropping personality bombs all over the place. It doesn't matter how good someone is with the technology if they leave a huge wake of HR or team issues behind them. In fact, with that kind of collateral damage, your project may not survive. We made a mistake by not looking closely at the non-technical skills this person had."
That's just one of the many pitfalls that can await an insurance company in the hiring, controlling and, when necessary, firing of IT consultants. There are plenty of potential woes- poor scoping of the work, project creep, cost overruns, and runaway projects-that can befall unwary business executives or IT managers who fail to closely monitor IT consultants at every step.
Given these challenges, what are some best practices for engaging, managing, and dismissing IT consultants? And more important, what are the steps that a client firm can take to ensure that it's deriving the most value from a consultant?
First of all, the IT organization or business group selecting the consultant would be wise to keep the big picture-the business benefit of the project- foremost in mind at all times. In other words, don't allow the consultant, who doesn't know your business as well as you, steer you down a path you don't want, or need, to go.
Colonial Life's James, who spent 10 years as a consultant before shifting to the insurance industry, knows firsthand how IT consultants can be driven by factors other than the client's business goals. "Part of the motivation of a consultant is to increase the areas they can participate in so that you will engage them in other areas," he says. "For this reason, you need to look at their guidance with a critical eye and some skepticism. When I was in consulting, we always were looking for other areas where we could add value."
THE SELECTION PROCESS
When choosing an IT consultant, it's a good idea to follow an existing procurement process or framework for engaging outside vendors. "Companies do best if they start with a strategy for how to use IT consultants," says Craig Loughrige, senior consultant at Simsbury, Conn.-based Robert E. Nolan Company.
In fact, following that process can save money. "By having a vendor management organization and an automated system for tracking activities with vendors, you can get price breaks and better values out of those vendors when you're aware of all the work that's going on," James says.
A key criterion in selecting a consultant is the cultural fit- in other words, how well do the consulting firm's people fit with your staff, both the IT employees and the business unit people who will be closely involved in the project?
"We find one of the things that is under-appreciated and yet very critical is how consulting firms fit in with the client's culture," says Jamie Yoder, managing partner in the insurance practice at Chicago-based Diamond Consulting. "You should look at their track record (if they've worked for you in the past) and ask, how did that project improve your organizational capability?"
Colonial Life's James recommends that early on in the selection process, the insurance company should bring in key staff from the business unit that will be heavily involved in the project. "That way they will have a greater level of commitment to the project," he adds.
SCOPING THE PROJECT
One of the most critical aspects of engaging an IT consultant is a clear scoping of the parameters of the project from the outset. "Scoping a project is extremely important," says Loughrige. "Where the project was scoped, we've had companies come in a little under budget, but when a project was not scoped, we've seen them go 20% over. You get better value when there is a specific deliverable."
Others agree that a careful scoping of exactly what an IT project entails is an essential factor for its success. "You get more bang for the buck if there is a well-defined outcome you are looking at," Yoder asserts. Adds Colonial Life's James, "The business world changes frequently, and you need a pretty clearly defined scope."
Nonetheless, James suggests keeping an eye open in case new opportunities arise during a project that could well impact its ultimate success. "Sometimes by having more latitude with the scope, you will identify some opportunities or success factors that end up being impactful to the success of the project," he adds.
AVOIDING PROJECT CREEP
Loosely defined as when a project meanders beyond the original scope into new areas, often with no immediate end in sight and exhibits a fast-ballooning budget, "project creep" has sounded the ultimate death knell for many an IT initiative. In these instances, the project seems as if it will never get finished, and never accomplish its original business goals.
"Project creep is a very serious problem," says Nolan Co.'s Loughrige. How can companies guard against it? "First, you need to be very clear about what you want the project to do," he points out. "The less ambiguous the better. And second, you need to understand the value of each piece of the project. You need to be very hard-nosed about managing the project when people say 'we may want to do that in the future.' You want to manage it midway, and keep asking, 'do I really need this?'"
An effective change control process is one way to safeguard against a snowballing IT project. "You should be constantly driven by the business case, and your change control process needs to be built around the implications any change has on the business case," says Diamond Consulting's Yoder.
Even with an outsourcing arrangement, in which both parties assume they fully understand what the client is paying for, there can be creep. "With an outsourcing engagement, you feel you have a fairly good understanding of the problem domain, but still there is a chance for creep to occur," says James. Again, having a clear and well-defined change control process in place can help.
FIRING A CONSULTANT
"We have definitely had to dismiss consultants in the past," James says, the rock star techie who had trouble getting along with the team being just one example. "One reason is that we're in a business that can get pretty complicated, and it's hard to predict how successful someone is going to be." In one case, he says, a consultant had to be dismissed because the person was only able to work remotely. "The assignment required someone physically on location who could work with other members of the team," James explains.
One way to avoid or at least limit the chance of having to fire a mismatched consultant is to place the consultant candidates during the selection process in a "test" situation to see how they respond. "You put people in a challenge and see how they respond," James says. "If their response is one we all agree on, then we may have enough information to make a decision on that candidate."
Another sensitive area that can easily lead to the dismissal of an IT consultant is insufficient care taken toward security issues and protocols. Again, a screening test during the engagement process may prevent the need for firing the consultant later on. "You can put them in a security risk situation and see what priority they put on data security," James adds.
Other reasons for firing an IT consultant include missed deadlines, not meeting the standards of quality for the work, and too many defects turning up when testing the system.
Once again, the runaway IT project popped up its ugly head in the discussion on when to dismiss a consultant.
"There always are projects that run out of control," says consultant Yoder. "But if your consulting partner is not operating in your best interest-for instance, if they're doing it in a self-serving view-you shouldn't stick with them. The business strategy should always drive what you're trying to do."
Doug Bartholomew is a freelance business writer based in Berkeley, Calif.
