Someone asked me this the other day. I went through an automatic salesy response at the time that was likely not very informative. Now I’ve considered it since, here’s my (sub-2,000 word) response – beginning with the smallest bit of history.
In the Nineties, other than Ace of Base singles, the name “IT Consultant” was heard all over town. Structured programming (particularly around class usage and collaborative development) was barely used. ERP/CRM systems were being released/integrated; removing the human side of the business and replacing it with processes and management. Organisations were learning how to harness the Internet to propagate brand and later to do direct business. The underpinning (both technical and cultural) of the Internet (and its Intranet/Extranet friends) in particular was moving so fast that pretty much all enterprise organisations needed several specialists in order to translate what the technology alone meant for them: and if you need several specialists, a bunch of developers and need to be told what to do – you might as well deal with one firm that has it all – the IT Consultancy. There were thousands of arch/competing within a decade predictions which baited organisations further driving demand: Negroponte being the most well-known futurist. It was a sort of golden age but one that perhaps led to a misplaced understanding of efficiency and a loss of confidence in what people can achieve. Its apogee as a uncontrollable meme was MarchFirst which incorporated, traded at $52 and then went bankrupt all within a year in 2000/2001.
Fast forward two decades; the Internet (although still in infancy) is pervasive, stable and readily built-upon. Enterprise organisations have first-world problems – user “journey”, vendor lock-in, data quality, post M&A systems integration and the seemingly unending moving to the cloud. Employees can be highly tech savvy. The first flush roar of boundary-pushing through dotcom craziness has levelled to a gentle hum of industry. It used to be that instead of rediscovering fire for the thousandth time, an IT Consultant showed you how to use a lighter. Now everyone has a lighter or elects not to smoke. There will always be those who experiment with cheaper/faster/more sustainable methods (magnifying glass, flint/steel, laser etc.) in order to gain some edge.
With this in mind; in the current landscape – do we still need IT Consultancies and, if so – when?
Here we are talking specifically about devoted IT Consultancies (and systems integrators); either standalone or a wing of a larger management consultancy. In addition, many will have specific technology/platform focusses e.g. Oracle, Microsoft etc.
Probably do use them for:
- Resource availability. Who has the time in-house to own new projects? Few senior managers have the bandwidth to do this and maintain regular work. Also, bringing in someone from outside who does not have a vested interest in preserving the status quo, but just wants to get the job done and go home, can certainly push things along. Important for Y2K, London Olympics 2012 etc. A caveat though is if you need a critical system built: your organisation is so busy just existing that no-one senior can take point on a project critical to your success? Really? If this appears so, executive management should probably experiment with Parkinson’s Law in order to gauge the head-count/utilisation/efficacy sweet-spot for their organisation. There are also real seasonal reasons why IT Consultants are necessary.
- Risk management. Projects are well known to fail for a wide variety of complex/hard to foresee reasons. Options to compel larger IT Consulting organisations to legally and eventually deliver through fixed priced contracts for specific projects are attractive to many – especially now. It’s a little cynical but then so is software implementation.
- Technical expertise. Consultants (assuming they have worked on similar projects before) can add an element of experience and knowledge to projects that many in-house Systems Management/Operations resources simply do not possess. SME’s in particular can be critical in design and QA roles. A caveat – great SME’s increasingly become independent contractors – working their own personal brand due to a combination of a greater need for independence and higher salaries (both met by personal client contacts they have made throughout their career). Great/innovative developers and architects (the ones you need to give you an edge) are invariably drawn toward the still expanding start-up space especially the enterprise side. Good, however, is perhaps better than what you have and so use of IT Consultancies can make sense – for now.
Think twice about using them for:
- Large design/implementation projects. First off – why are you doing one? Don’t you know that the majority of these things fail? The recession doesn’t help your success rate either and neither does the majority of your workforce believing the project is doomed before it even starts. Isn’t there an existing cloud solution that you can maybe hook into (technically/commercially) and incrementally tailor instead? Things are going to be even harder if there’s another level of separation with your customers through IT Consultancies. We are talking here specifically about several month/dozens of employee projects: building systems essential to line-of-business or a speculative project that could catapult the organisation into a new sphere of business. This kind of work is historically IT Consultancies’ bread and butter since they are mainly composed of developers and engineers and consultant utilization is key to their bottom-line. They are extremely keen to sell them.
- Industry/Market/Vision. Social/mobile is embedded into many B2C transactions and employees have sophisticated awareness right off the bat. IT Consultancies are not really needed to expound upon the art of the possible any more; certainly not for an organisation they may be unfamiliar with. More generally, even without industry insight – why would organisations pay to listen to anonymous salaried technology consultants from a firm (likely with specific vendor agendas) when they can listen to an entertaining executor who has built a $60M company from nothing and is crazy-focussed on the human element – for free? If they want additional specific/ongoing advice, the routine now is – they have these gurus on a retainer – maybe a couple hours a month. They Skype. It’s a cheaper and demonstrably better solution. You probably don’t want one of the hoards of generic social media gurus, a little more (driven by your CIO) specialisation is called for and there is a wide selection available; each with differing value adds to fit your needs – data portability, futurism in respect of social/money, social politics and connectivity etc. What are the competition doing? IT Consultancies typically sign NDAs and so this point becomes moot. Few IT Consultancies carry with them an understanding of B2B interfacing protocols/formats (too many & not historically a tech skill). Users? You don’t really need IT consultancies telling you about your users surely? If so – then you may have a larger problem and it’s one that your new IT solution will fix not a jot. Let’s say though you do need generic user advice – maybe adoption, best authentication mode, user-interface niceties – the guru model still holds – you can talk to one of those carving out a niche as a professional user.
- Technical skills transfer: The nature of finding a technical answer/approach has shifted since the 90′s from “Do you know how to do this?” to “How quickly can you find this out?”. Everything is readily available on-line for research. If you’re not finding something, you’re doing it wrong. In parallel, most IT Consultants, rather than burdening their memory with fast changing knowledge use a just-in-time approach (AKA search for it when you need it) – easily replicated by in-house staff. Its mainly about the process. While many IT Consultants are devoted specialists often with deep vendor accreditation, they are not usually recognised as thought leaders or indeed effective coaches. Many do not receive educator training and certainly on a busy project (are there any others?), skills transfer becomes the lowest priority. Consultants are also perceived, even now, as bringing with them a sort of two-for-one apolitical/objective input on management/support staff capabilities through project-based exposure. While this may well be true for selected management consultants (around the manager grade), it is typically not true of IT Consultants.
- Operations. Last year Microsoft delivered free/cheap live on-line technical support for Windows, Office, virus removal and general training. They are also partnering with telcos to deliver bundled support services. Apple have delivered free support for years with their Genius Bars. The trend for software vendors to offer free basic support will continue; becoming expected. The need for third-parties to intercede will diminish. Generic ITIL recommendations don’t really fly any-more. Also be prepared for clownishly deep pockets if you want to hand over your desktop infrastructure and apps to an IT Consultancy.
These are general recommendations for most organisations right now. Experiences will vary. IT Consultants still have some role for all but the tiniest of organisations. That role is diminishing though; particularly as organisations are discovering they need to rediscover the human element in dealing with their customers, cloud solutions (either pre-existing or built incrementally through partners) become the norm and enterprise software start-ups gain ever greater potency.
In order to be price competitive, many IT Consultancies utilise offshore development. This is fine. Software needs to be well specified and offshore resources really can work very well. The issue comes with the level of communication required. Telling an IT Consultant what you want and then him/her having to tell an offshore resource (and then report back on progress) is a degree of separation that simply put – adds risk. Much better to directly task/monitor offshore resources. There are plenty of offshore software development teams you can go to. Use of an IT Consultancy for offshoring would make much more sense if they retained a pool of offshore resources ready to work with the client for a few weeks before moving offshore except this is rarely a cost effective option.
Extending the Industry/Market/Vision point above, look at the entertainment industry. It is undergoing enormous change right now: tweets replacing press releases, music becoming essentially free (necessitating new business models), integrity – forged by honesty/sharing becoming a currency and use of previously fringe/decentralised distribution outlets. The entertainment edifice that has stood since Chaplin is falling. Celebrities and the organisations in their orbit that embrace a post-Empire approach are thriving. Look at Lady Gaga and her little monsters. The IT Consultancy in its current form cannot help. The skills needed to thrive right now are (in order) – creativity wedded to a deep understanding of how a particular industry operates followed by savvy, wide-ranged understanding of technological possibilities. If these skills are not held within your organisation by salaried employees – there’s a problem. It’s a problem because you need those skills, you’ll always need those skills and because IT Consultancies don’t have the first two.
IT Consultancies will focus on poorly run public organisations and redacting the appalling sum of tech journalism in the short-term. Computer Science majors and their desires for money, learning, travel, lifestyle and ideology will gravitate toward increasingly sophisticated/tailored offers from start-ups. Over time, the stock-in-trade of IT Consultancies will become generalised resource availability and risk management. They will morph into outsourced departments owning these functions for large organisations and the smaller ones will consolidate or fall. A very few may graduate to a sort of co-operative of gurus for back-office purposes e.g. taxation/economies-of-scale. I won’t wimp out on predicting a time-frame for this happening; but it will be the very convenient - within a decade.