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High-Value IT Consulting: 12 Keys to a Thriving Practice
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The timeline for executing an engagement can be wide open for this discussion anything from a month or two to multiple years in duration Your organization plan must accommodate a lot of unknowns For example, you do not know the detailed requirements of the engagement, nor the technology that will ultimately be used to build the solution Members of your engagement team may get promoted, win the lottery, retire, quit, gain other interests, lose interest, or be fired You will also need to accommodate ongoing client demands for special skills Some resources may only be needed for a concentrated time well into the project Other resources may be needed for a short time here and there, or on an ongoing part-time basis Different team members have different demands, stamina, and work ethics Resourcing Strategy To make all this work, you will need to have a flexible resourcing strategy that incorporates many different sources and can be scaled to your evolving needs Some common sources include the following: Internal consulting This is the bread and butter of consulting organizations Internal, permanent consulting resources draw salary and benefits in exchange for charging out at a healthy charge rate Many firms try for a profit margin of 30 percent to 60 (or more) percent on each billable resource The overhead of maintaining permanent staff can be crushing if the practice utilization goes down This is where some of the other sources are valuable for augmenting a core, high-in-demand, permanent consulting group for specific periods of time Contractors Contract resources are useful for scaling your practice in sudden times of need either with additional resources or specific skill sets Consider developing close relationships with independent contractors who have a proven track record for delivering quality, reliable service at a competitive price Offshore workers It is becoming a common practice to subcontract specific, well-defined pieces of work to companies in countries that have strong technical resources, but at lower fixed costs Countries like India and China are popular choices for offshore work However, any country that has a favorable exchange rate vis- -vis your own currency
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can provide cheaper technical resources The challenge, which many organizations have overcome, is communication, management, and quality control A strong methodology is required to pursue this route Vendors Another source of consulting expertise is to hire other consulting companies and software product vendors to provide expert advice on the engagement Internal operations Consulting organizations, especially the larger ones, have a core staff that is technically inclined, but dedicated to maintaining internal systems In a pinch, it is possible to allocate some or all of their time to client work and get them over the work hump Depending on the strategy you choose, you should enter into legal agreements with the external groups that will protect both your interests Figure 7-4 shows some of the major areas to cover in drafting a legal agreement Keep in mind that using inexpensive resources in the project team offers an opportunity to increase overall profitability Building the
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right external relationships offers a hedge against other project cost overruns The type of organization that is ultimately defined depends very much on the nature of the engagement and the client Building a Flexible Organization Being lean and mean is always a sound business objective However, it is too easy to carry this goal too far In an engagement crunch time, having few resources puts you in a lose-lose position overall The consulting resources end up working around the clock and may quit, the client is not seeing enough progress, and you re throwing money everywhere to keep the client happy Building an engagement organization that has a certain degree of redundancy in the first place will allow you to scale the organization to meet future demands Redundancy is required in terms of specific skill sets and the number of resources that can fill a role You need to manage redundancy carefully Rather than billing all the resources that are allocated to a project, keep the backup ones involved during meetings and documentation reviews, but have them working on another billing engagement The 80:20 rule applies here: 80 percent of their time is billable on another engagement, while 20 percent is billed to an engagement that they can get involved in quickly if the organization needs to scale up The following list identifies some of the key areas that require backup resources in IT projects to minimize risk and improve scalability It is unwise to make any of these areas your weakest link on an engagement These areas match up to the core team that was created in the pre-engagement kickoff organization Leadership You need an overall leader as well as strong team leaders Always try to have two perceived leaders in front of the client one on an everyday client management basis, the other as an executive Business Any IT solution must have a strong core business proposition The business analysts involved in the engagement from the beginning will have the best chance of driving a solution that matches a client s needs Always have more than one business resource on an engagement to back up the other one
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