Coming In From the Cold

A consultant-turned-IT- manager offers firsthand knowledge and tips on how not to get burned by experts for hire. And he names names.

Steve Romaine, chief strategist in the technology group at Hartford Financial in Hartford, Conn., is a former IT consultant and author of Soldier of Fortune 500: A Management Survival Guide for the Consulting Wars (Prometheus Books, 2002). In his book, he candidly chronicles his experiences as a highly paid IT consultant for IBM, Bank of America Corp., Chase Manhattan Bank Corp. and other large U.S. companies.

Unlike other professions, there is no licensing requirement for consultants, Romaine points out. Anyone can do it. And they do, which he says contributes to a culture where politics rule and the most important objective in any consulting contract is to secure the next contract. Romaine says he wrote the book "to provide guidance in recognizing potential abuses and avoiding them in the future." He recently talked with Computerworld's Julia King.

You've been on both sides of the fence. Where would you say problems first surface? What are the early warning signs of potential abuse? What often happens is a consultant comes in and says, "We have a game plan we used before. It's a best practice. Get someone out of your business unit to be the project sponsor and head that up." Consulting firms say they need a high-level sponsor [at the client company] because it's important to make sure the business unit buys in. But the problem is that the client company is often getting such a senior-level executive that they're not there to run the project on a day-to-day basis. Senior executives don't understand the technology, but they don't want to appear not to understand, so it creates a dependency on the consultant. That's a huge issue.

You raise an interesting issue about best practices. Consulting firms like to tout their vertical industry expertise. But what value is it to Company B to have a consulting firm deploy the same systems and processes it deployed for Company A, especially if they're in the same industry? If it's something that's a core competency of your business, something you're hoping will give you a competitive advantage, don't bring in consultants who will learn on the job [and] then go across the street and work for the next guy. You have to be careful not to train the workforce of your competitor. Sometimes, best practices make a lot of sense if you can gain competitive information, but you have to put parameters around it to make sure you're not becoming a me-too operation.

If a company can identify core competencies to provide competitive advantage, that's not the place to bring in a vertical best-practices consulting firm who's going around to all of your competitors. On the other hand, it might be the thing to do if you're trying to figure out what your competitors are doing.

Consultants bill by the hour, which can get extraordinarily expensive for companies. Any tips for keeping a lid on their hours? Consultants get caught up in "analysis paralysis" because they're trying to bill out as much as they can. It makes sense for companies to define their [project] requirements before they hire an outside consultant or to divide up the work, because there's a conflict of interest if you hire the same consulting firm to do both [the requirements planning and the implementation]. For example, you're not going to see a firm with PeopleSoft consultants on their bench recommend SAP.

You write that many companies make the mistake of bringing in consultants to solve political infighting. Why doesn't this work? With businesses operating so much tighter today and people trying to reduce costs, a lot of companies are getting back to alignment between business and IT. There's still a lot of infighting in some companies, and there are turf wars. Consultants come in and play one group off another.

Here's a perfect example: A company's objective is to eliminate its data silos that were created by different business units all using different applications. The business model of some consulting firms is to have a consulting partner responsible for different parts of the [client company's] business. At NationsBank [now part of Bank of America], we had a consulting partner responsible for check processing and another partner for electronic payments. They were competing for the same business, and they had no incentive to eliminate the silos. One guy was there to get the check-processing business, and the other guy wanted the electronic payments business.

Consulting companies often promise to train a client's IT workers so they can maintain systems once the outsiders leave. How can a company ensure that this actually happens? Technical complexity is a best friend for some consultants. Knowledge transfer in the long run isn't going to help consultants get more business. So make sure it's in the contract upfront as one of the deliverables. This is a good place to separate good consultants from bad ones.

Steve Romaine of Hartford Financial

Steve Romaine

Current job: Chief strategist, technology group, Hartford Financial

Previous positions: High-level consulting and managerial positions at KPMG Consulting Inc., The Monitor Co., NationsBank Corp., Informed Technology Decisions and IBM

Home: Fairfield, Conn.

Most recent book: Soldier of Fortune 500: A Management Survival Guide for the Consulting Wars


Tips for Managing Consultants

1. Don't use consultants to broker vendor deals.

2. Thoroughly check the backgrounds, credentials and references of consultants.

3. Never shift management decisions to consultants.

4. Make skills transfer and training required components of getting paid.

5. Pay for consultants to fly coach class only. It forces them to mix with real people.

Source: Soldier of Fortune 500: A Management Survival Guide for the Consulting Wars

Copyright © 2003 IDG Communications, Inc.

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