I recently read two articles I thought I should summarize and review here. The articles provide two opposing viewpoints of consulting and some lessons learned for service buyers.
This article on CIO about “7 Dirty Consultant Tricks (and How to Avoid Them)” [FN1] caught my attention. Especially the part about ways consultants try to “extract money from their clients…”:
IT consultants are among the most slippery of the bunch. Among their favorite tricks: Using “scope change” to line their pockets, claiming expertise they do not actually possess, promising you their superstars and then sending in the rookies, purposely delaying decisions and sowing confusion as they rack up billable hours, and collecting kickbacks from other service providers. The worst ones may even hold your company’s intellectual property or systems hostage until you pay up.
The article title notes it is the consultants but in reality it is the SAP system integrators who pull these types of tactics. While the scams and shams happen all too often it is the system integrator that uses the “scope change” tactic, does a “bait and switch” with “con”sultants who have little experience, etc. The CIO article does concede that not all consultants are this way.
The Seven Consulting Dirty Tricks to Separate You from More of Your Money
1. Bid low and bill high – some SAP SI’s will deliberately bid low and then change order or customize you to death. Even though you start out with a project you believe will cost “X” they will constantly work on ways to leverage more and more revenue from you.
2. Bait and switch – they sell the “A” team but deliver the back benchers and water boys. Sometimes they pad their RFIs and RFPs with first class resumes for consultants who never show up for your project. Some of the placement firms bring fakes and knowingly help them create fraudulent resumes as well (see Screening and Interview Methods to Find the Right SAP Consultant and the follow-up piece Screening and Interview Methods to Find the Right Consultant – Part 2)
3. Using stall tactics and distractions – they avoid creating momentum and enable indecisiveness.
4. Hostage takers – build special “trap doors” into their solutions, use password protected infrastructure, or create contracts that give the consultant / company all of the legal rights to any solutions.
5. Kickbacks – consultants may push a product, solution, or other consultants that they get paid for.
6. Selling you far more than you will ever need – does it meet the business requirement, or is it a sledgehammer to swat at a fly when you really need a fly-swatter?
7. Empty suits or vampires – both will bleed you dry. Incompetent or unqualified consultants end up on the project and bleed the budget and timeline until there is nothing left.
What an absolute mess! Unfortunately these 7 ways you get scammed, shammed, or are taken advantage of are pretty common. The article I referenced provides some great suggestions on how to protect your company. It’s worth the read.
The Alternatives to the Consulting Fraud Factories
In contrast to these practices, or maybe because of them, we are beginning to see customers use small firms and individual consultants more and more. While this is a trend that many sophisticated SAP customers are beginning to use there are also things to be concerned about here as well. Another post presents a great counterpoint to a trend for quality consultants that is beginning to take hold [FN2].
Unlike their larger counterparts, these small one to five person consultancies seem to be more principled in their approach to growing the business. Some of the common values adopted by smaller firms and missing from the larger include:
1. Do not promise what you cannot deliver
2. Do not overextend your resources and get a reputation for poor performance.
3. Do not tell the customer what he or she wants to hear. Tell them what they need to know. They will respect you for it.
4. Network constantly on professional sites such as Linked In. Hit the “Answers” feature and accumulate an “Expert” rating from your peers in your field. This allows buyers to not blindly trust that they will get the right resource but be certain in advance.
5. Blog like there is no tomorrow. A blog is quite different than a web site. Provide good, solid information free of charge and use blog searches for synergistic businesses to team with. Teaming is an absolute necessity these days.
6. Be prepared to provide information, samples and valuable service gratis as a marketing tool. Introduce yourself and then immediately engage the client with your presentation tools available to bring your expertise to whatever topic they are interested in. Let them take you where they want to go with their concerns and their needs. Apply your presentation tools and expertise dynamically on the fly in a sincere manner to those concerns and needs and you will be in demand for follow up business.
7. Quote and bill what the client can afford and grow with him (in content and resources).
8. Be dedicated to working yourself out of a job with a specific customer and having your client take over by training him. He will remember you and recommend you to 10 others.
9. Remember growth is a function of persistence and foresight. Know where your market is headed and get their first – then write and speak about your success indirectly by helping others. Demonstrate humility and a satisfaction in helping others succeed. They will find ways to give you credit. There are ways of tooting your horn without making peoples’ lights go out.
10. Word of mouth advertising from pleased clients is a sure ticket to success.
There are a number of small firms and individual consultants who do outstanding work. They deliver great results and help you to mitigate project risks while delivering a high quality work product.
And with this introductory post I will be starting a series on the tactics, strategies, and scams used by system integrators in their sales cycles to gain your business. In the end they are less concerned about delivering results than they are about collecting their fees.
[FN1] CIO online, April 11, 2011 – http://www.cio.com/article/679330/7_Dirty_Consultant_Tricks_and_How_to_Avoid_Them_
[FN2] The Return of Boutique Consultancies…