Consulting's dirty little secret

Summary:Enterprise software implementation consultants often benefit financially when their clients' projects fail. Anyone buying software implementation services should be aware of this fact.

Enterprise software implementation consultants often benefit financially when their clients' projects fail. Anyone buying software implementation services should be aware of this fact.

Successful projects have a predetermined end date, marking the project's conclusion and signaling the end of consultant billing. When failing projects run longer than planned, consultant fees often run substantially larger than budgeted. Much of this over-budget amount drops to consultant's bottom line.

To protect yourself, negotiate services agreements offering incentives for success rather than failure. For example, include an early completion bonus in the contract, but insist on stiff penalties if the project runs late or over-budget. I asked Vinnie Mirchandani, an expert on negotiating contracts with consultants, for more advice:

Align consultants (who are frequently system integrators) with project success metrics. Measure them against things that make or break a project...well trained users, well tested processes, well scaled architectures, If they are involved in end user training, test the users they trained and have them do remedial training till all users pass. System integrators are big on paper deliverables. Those plus $ 2 may buy you a cup of coffee at Starbucks -- maybe.

On the other hand, if the delays are your fault, be prepared to pay when the consultant fixes your mess. And let's not kid ourselves, client-created failures are a dime a dozen. That said, follow the sage words of Larry Dignan, ZDNet’s Executive Editor:

Be tough, but don’t screw your vendor.

Note to consultants: I realize this applies only to other consultants and not to you, but if the shoe fits...well, you know what to do.

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On the subject of consultant excess, the image below is courtesy of the Getting Drunk in First Class blog, which describes the "crazy-ass stories that constitute a consultant’s experience." The picture shows a consultant's dinner bill, presumably paid for by the client. Yeah, life is tough in first class.

ConsultingÂ’s dirty little secret

Topics: CXO, IT Employment

About

Michael Krigsman is recognized internationally as an analyst, strategy advisor, enterprise advocate, and blogger. For CIOs and IT leadership, he addresses issues such as innovation, business transformation, project-related business objectives and strategy, and vendor planning. For enterprise software vendors and venture-funded star... Full Bio

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