Organizations risk wasting vast sums of money on external consultants by not managing them tightly enough or using them when the work could be done just as effectively in-house.
The warning comes on the heels of a report by the U.K. government this week that revealed the public sector wastes more than £500 million ($1 billion) a year on the unnecessary and poor use of consultants.
The issue split silicon.com's 12-strong CIO Jury IT user panel this week who were asked if external consultants deliver value for money. Most said both "yes" and "no"--the main caveat being that consultants need to be tightly managed to get the best value out of them.
Neil Hammond, head of IT of British Sugar, said: "If there is there a specific question you want tackled or a specific, well defined project you want undertaken then consultants can be very useful in order to supplement resource and skills or take an external perspective. But if they take over your strategic planning and program management then you're in trouble--keep consultants on tap, not on top."
That means consultants need to be used within a clearly and tightly scoped context set out by the employing organization. Paul Haley, IT director at the University of Aberdeen, said: "To permit the consultant to scope the project is to abdicate managerial responsibility."
Kevin Fitzpatrick, CIO of Sodexho UK, added: "Though consultants can sometimes truly be 'partners' their primary motivation is revenue for their company not yours."
Nicholas Bellenberg, IT director at publisher Hachette Filipacchi UK, said he has had excellent experience of using consultants when they are tightly focused, delivery driven and with finite budgets, but said that is not always the case.
He said: "My worst experience was years ago when I had cancelled a particular piece of work the company supplying the consultant said, 'Couldn't you just keep him on until the end of the month?' It was clear that their agenda was keeping the day rate coming in, rather than delivering value. Caveat emptor."
The use of consultants in the public sector is obviously a thorny issue given the cost to the taxpayer. Peter Ryder, head of ICT of Preston City Council, said: "Some do an excellent job but perhaps the real question is, should we always be using and spending so much on external consultants who charge a considerable fee when a lot of the work can successfully be done in-house?"
Janet Norman-Philips, head of e-government of South Norfolk Council, added: "The right consultant at the right time can save you a fortune and a pile of grief. On the other hand there are times when using a consultant is insane or, even worse, when the consultant you use is insane - then you are really in trouble."
But David Supple, head of IT and creative services of consultancy firm Ecotec defended his industry. He said: "The key is knowing what to ask for and knowing whether or not the knowledge and guidance you are asking for is good value for money in the first place--the management of consultants is a skill in its own right."
Today's CIO Jury was…
Ade Bajomo, head of IT systems and strategy, Pearl Life
Nicholas Bellenberg, IT director, Hachette Filipacchi UK
Peter Birley, IT director, Browne Jacobson
Chris Broad, head of IM and technology, UKAEA
Kevin Fitzpatrick, CIO, Sodexho UK
Paul Haley, IT director, University of Aberdeen
Neil Hammond, head of IT, British Sugar
Janet Norman-Philips, head of e-government, South Norfolk Council
Andy Pepper, director of business IS, Tetley
Peter Ryder, head of ICT, Preston City Council
David Supple, head of IT and creative services, Ecotec
Graham Yellowley, director of technology services, Mitsubishi UFJ Securities International