Screwing the customer: Tales from the crazy consultant file

After all this time blogging about CIO issues and the world of IT, I am always amazed by the antics of some consultants. Yesterday, I heard wild stories from two different people.

In the first case, an enterprise buyer told me about his company's ERP implementation. They bought on-premise software from a reseller but the project isn't going too well. Although the company is small, with about 25 people, the CEO has fine-tuned their business model so customers always pay in advance of work being performed; in other words, this little business is a multi-million dollar money machine. The company is stable and happy, and does not plan on significant business change or growth. Unfortunately, these folks can't absorb the business process changes created by their new ERP system. As a result, the implementation is late and distracting for the owner.

Although this firm bought software from a third-party reseller, they want the software vendor to find another implementation services company. Unfortunately, the software vendor has no relationship with this buyer -- the software was purchased elsewhere and the company chose its own consultants.

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This buyer has no IT department, little experience with computers, and no appetite for change. They were sold software that poorly fits their needs and are now completely dependent on the consulting company, which has taken advantage of that position of power.  In other words, the buyer has outsourced control, leverage, and judgment to an unworthy consulting firm. Translation - the customer is screwed.

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Aside from everything else, these folks would be perfect candidates for a cloud-based solution. A small company with no IT staff and straightforward requirements should be in the cloud. Translation - the customer is double screwed.

The second case is even worse. A small consulting organization has a multi-million dollar change management contract with a large state agency. Partially through the project, the consulting company unilaterally decided to shift its focus to advising on tools and methodologies, rather than provide open-ended change management support. 

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Eventually, the customer balked and sent the consulting firm a strongly worded letter that came just short of terminating the relationship. Recognizing the time and expense the state must endure to end the contract and hire replacements, the consultants responded with a large invoice and veiled threats of legal action. Meanwhile, the agency hiring manager, who reports just steps away from the governor, has few good options since any choices involve delays and additional expense. Translation - this customer is also screwed.

ANALYSIS AND STRATEGY

Both enterprise buyers made the fundamental error of handing control of a mission critical project to external consultants.

In the first instance, an inexperienced buyer purchased the wrong software and then outsourced virtually all system and technical knowledge to the software implementers. Given the customer's lack of experience, the consultants have this buyer as a hostage for life (or until the customer replaces the consulting firm).

In the second case, the consultants performed a bait and switch, unilaterally deciding to change strategies without giving the customer any options or choices. 

The common denominator in both situations is consultants who possess too much real (or perceived) power over the client. Although the best consultants always remember they are trusted advisors, unethical ones use their position to take advantage of the customer's weakness. The worst consultants intentionally manipulate the client into a position of dependency, by taking advantage of the customer's lack of knowledge. 

The signal challenge for enterprise buyers is hiring trustworthy consultants who will place the client's needs first. The difficult in accomplishing this is compounded when the customer has little experience in the subject area. To avoid these problems, buyers should dig into the consultant's references and look for subtle cues about the relationship with previous clients; ask for references on projects that did not end perfectly, to gain insight into the consultant's commitment under pressure. In addition, be sensitive to early warning signs of trouble; if something feels wrong on your project, get it out into the open, and have a discussion with your consultants. Its far better to raise awkward issues early than to wait until the blossom into huge problems.

Trust is the currency of relationship and value. Find ways to develop a relationship of trust with your consultants and keep a sensitive eye for things that do not look or feel right. In the end, the project is your responsibility to manage; although consultants can support your efforts, do not allow external third parties to become your de facto boss.

Please share your experience and advice on dealing with consultants!