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Hire Authorities
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July 22, 2002
By Jonathan Feldman
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There's an old story about a company that calls in a consultant because a critical assembly line machine is down, and it's costing the company bigger bucks by the hour. The consultant arrives, looks the machine up and down, then whacks it with a hammer. Amazingly, it starts working as good as new; the assembly line springs to life, and the day is saved. Soon, the consultant's bill arrives: $10,000. Outraged, the foreman demands an itemized account, which the consultant gladly provides: "Hitting machine with hammer: $1. Knowing where to hit machine: $9,999."
Nowadays, knowing when to call in a consultant, choosing the right one, managing the relationship and making sure you get the most for your money are priceless. To offer you the best strategies, we've spent the past few months grilling consulting companies, analysts, industry groups and end users for their experiences, tips and lessons learned.
Stating the Obvious?
First, let's define the key term. By consultant, we mean someone who offers point expertise in a specialized field for a limited duration, usually to address a critical need. You call a consultant when you're happy to pay for someone's deep knowledge, to avoid costly mistakes or quickly recover from a mistake you've already made.
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Think everyone knows what a consultant is? We encountered some confusion in our research--particularly from vendors who offered to take over staffing functions for, say, PC management. Sorry, that's outsourcing.
As columnist David Willis, an analyst with the Meta Group, puts it: "Consulting is what you want when your need is strategic. Outsourcing is what you want when your need is not strategic." Consultants are usually hired to improve or fix, but never to maintain a process or function.
Only you can decide what is strategic for your organization. In general, it's the projects that help a company achieve its broadest goals. For example, changing an e-mail system will have a relatively minor effect on a business that uses e-mail primarily for internal communications. However, we interviewed an ISP that used consulting services to improve e-mail services for its customers, as e-mail is a strategic component of its business.
Making a Road Map
Regardless of how you define consulting, there's no doubt it's big business. Gartner Dataquest predicts that by 2003, total consulting in North America will grow to $8.2 billion--up 8 percent from 2001 and up 12 percent from this year. Not surprisingly, nearly all respondents to a January Gartner survey of consultants reported technical architecture as their primary competency. What we found surprising is that those respondents were developing competency in business strategy more than in any other area of expertise. (See graphic "Consulting and Systems Integration Vendor Competencies.")
We distributed two surveys of our own--one to consultants and another to our readers--to supplement this information. We asked the top revenue-producing consulting firms to tell us the specific technologies for which they offer services. The answers vary widely--with EAI (enterprise application integration) at 100 percent, CRM (customer relationship management)/ERP (enterprise resource planning) at 92 percent, VoIP (voice over IP) at 33 percent and directory services at 25 percent.
Meanwhile, our e-mail poll of readers gave us anecdotal evidence of the kinds of technology consulting you desire. The spread was fairly even, with security topping the list at 17 percent of respondents and VoIP near the bottom of the list, at 4 percent.
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