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Reframing the independent consultant debate

Reframing the independent consultant debate
| On September 12, 2013

Die Gelegenheit ergreifenMy July piece on the Underrated need for independent consultants proved to be a rock in more shoes than I expected. The comment thread aired out the issues and then some, but also left me wondering, ‘Where do we go from here?’

If only the answer was easy. But it would be a shame to let a chaotic discussion serve as the final word – especially on an issue with so much at stake. I believe the success or failure of enterprise projects rides on the proper use of independents, and more broadly, on autonomous and educated customers taking greater control of their projects.

So here’s my 11 point breakdown of what needs to happen next and the misconceptions we need to bust through.

1. The savvy use of independents applies throughout the project lifecycle. My last post focused on the role of the independent ERP consultant a.k.a. ‘the subject matter expert,’ but there should be independent views incorporated throughout the process, from vendor selection to implementation to optimization. Independent product experts should be supplemented by the periodic appearance of project auditors that can vouch for progress or flag concerns before they become crises or money pits.

2. No one is completely ‘independent’ – doesn’t matter. In the enterprise marketplace, we’re all funded by someone. The best we can do is disclose as often and as transparently as possible. ‘Independence’ is not some sacred label, but an argument for the presence of relevant experts with diverse views who do not have the same ongoing financial stake in the project as the ‘primes’ (the primes may be the vendor itself and/or lead consulting partners).

3. Incorporating independent views is a hassle, but it’s worth it. Yes, outspoken views are disruptive sometimes. Yes, it’s annoying to see the same person’s hand raised in the back of the room with another ‘Yes, but…’ contribution. But the messiness of such discussions are far better than massively bad outcomes. As blogger and consultant Steve Phillips commented on my first post:

Yes, there are consultants out there that refuse to act like adults. I have seen this on a few occasions. But remember, the client should be in charge of the overall project, set expectations with all parties in this area, and not tolerate a bunch of non-sense between consultants.

4. Independents must be politically empowered by the customer. If a customer decides to hire a outside expert but then does not politically empower them to make their views known, the prime SI will usually relegate them to a politically obscure role. That’s not diabolical, that’s culture. Chris Kernaghan, himself with an SI, commented that even other SIs can get sidelined. He added:

The client must empower the independent, or the SI will, through a force of people will obstruct the dissenting voice – even if that voice has the right (slightly less revenue) answer. All the good words in the world will not change the core thing – CUSTOMERS MUST OWN THEIR PROJECTS AND THEIR SAP SYSTEMS. If not then you might as well hand your SI a blank cheque or buy a SaaS solution.

I would just add that SaaS doesn’t solve these problems.  If anything, SaaS forces the question of innovative service delivery front and center. More on that shortly.

5. This has nothing to do with bashing SIs. Some of the consultants from big SIs who commented on the prior article were a tad defensive, though overall I thought they were really good sports and fair-minded. But this has nothing to do with knocking SIs around. A good independent cannot make up for a lousy prime vendor. The selection of the right services partner for your company and industry still matters. But even the right consulting partner is going to have an agenda. When big projects kick off, an additional perspective is always an asset.

6. Not every independent can become a trusted advisor. A big topic of debate on the comment thread is whether independents are even capable of having that customer-savvy to express views on project direction. True – not all subject matter experts are cut out for that diplomatic type of honesty needed for an advocacy role. Nor is that always necessary. Sometimes, a well-managed project just needs an expert that can carry out their product configuration marching orders.

While emphasizing it’s not easy to find independents with the professional polish to handle these politically charged situations, senior ERP consultant Greg Robinette had this to say about the independent as trusted advisor:

Many issues with ERP implementations stem from customer activities and behaviors. The independent voice is in a better position to help indicate when an end client needs to step up just as the end client is served well when the independent voice reviews and analyzes the plan and actions of the prime. This non affiliated view provides each participant a platform to excel and deliver value.

7, Customers’ consolidation of approved vendors is flawed. Forcing all contractors to run through a few approved vendors seemed like a great solution to the ‘wild west’ of the 90s, but it has caused some real problems:

  • Layers are formed between the independent and the customer.
  • These layers are usually marked up well beyond the value each ‘layer’ adds to the transaction.
  • Deals often fall apart because the layers chew into the rate to the point the independent walks away.

Commenting on a recent post on the non-value-added middleperson, here’s Jarret Pazahanick, who has been consistently outspoken on the need for independent consultants such as himself:

It is amazing how many customers want all their contractors to go through a preferred vendor (often just pass through middle men) who in the US want $50 to $75 per hour which equates to 100/150K a year extra cost for the customer. The sad truth is more often than not it means customers don’t get the really good independent consultants (due to the layers) but are often paying MORE for a less qualified candidate.

Fixes to this problem range from simple (require a prime vendor to allow consultants to pass through for a modest $10 an hour override), to radical (source independents directly from an online skills marketplace).  This one is on customers to address.

8. Better project outcomes are the direct result of more customer autonomy. My argument for independent consultants is a subset of a broader argument for greater customer autonomy on projects. That doesn’t mean cutting off outside SIs. But it does mean laying out terms and conditions when contracts are signed, which means agreements on all sides that independent experts and auditors will play a role. Characteristics of well-run enterprise projects:

  • autonomy over SI selection and ‘terms of engagement’ (often with assistance of third party vendor selection advisor.)
  • smart use of independents through project lifecycle.
  • ongoing involvement in relevant user, industry, and technical groups (and support of employee involvement in such groups.)
  • internal skills development plan, potentially culminating in internal centers of excellence intended to absorb knowledge from consultants and implant that in in-house teams.

9. Cloud changes this argument, but not much. I view the impact of cloud on this debate as part of a broader discussion on whether IT should be cultivated as an internal competency. I won’t settle that here. Some companies say yes, some say no, some are forced to say no to internal IT competency due either to budget or the difficulty of attracting top IT talent to their region or industry. Smaller, line-of-business focused projects are not immune from poor outcomes or overzealous salespeople either. Frank Scavo just authored an important piece on why SaaS customers should be vigilant about getting the right level of implementation services.

In a comment on how SuccessFactors changes the SAP consulting model, Pazahanick says:

Customers need to understand that the cloud deployment model is DIFFERENT than OnPremise so if their Software Integrator is trying to push the same model of a team of full time consultants coming site to do a SuccessFactors implementation there should be HUGE red flags and know there are cloud SI’s out there that have been living the new model for years.

Bottom line? Independent experts still have impact on cloud projects, even if they are less technical and more focused on an industry adviser role, or even if they are sometimes making their presence felt remotely. The best independents know their industry anyhow – tech virtuosos who don’t bring a business context are losing their sheen by the day.

10. SI delivery models need to change. We really haven’t seen the same ingenuity on the services side of the enterprise that we have on the software side via cloud/mobile/analytics. If existing consultancies don’t roll out of the options of virtual consultants, on-demand experts, and Consulting as a Service, upstarts will.

I asked Luke Marson to elaborate on the Consulting as a Service post and the changes afoot. He emailed:

I believe there will be a change in the consulting model soon to reflect the Cloud and this is going to have an effect on how projects are staffed. There are unlikely to be many large projects with armies of consultants and this is going to impact the bottom line of SIs. But also, this is going to give greater flexibility to clients and enable them to save money on these projects that they can – in theory – invest in quality resources. However, with such a clamor by SIs to get to the Cloud customers may end up with rock-bottom bargains but end up with rock-bottom consultants. It’s going to be a trick world and it’s already a Wild West in some areas.

11. The need for independents applies to all enterprise projects, not just ERP. This point came from Naomi Bloom on Twitter. She has seen as many HCM projects as anyone, of all varieties SaaS and otherwise, so her vote counts.

In that same email, Luke Marson summed up the value of independent consultants nicely.

It is clear that many see a role for an independent consultant to act as an unbiased advisor to the client and protect their interests from the SI. However, there is also a role in which an independent consultants can protect the project – and therefore the SI – from derailing due to a client focusing on trivial issues or “must have” functionality requests. An independent consultant has nothing additional to sell – if being professional – so they can be a trusted advisor to the client to ensure a project is well managed and the SI behaves with integrity. Although many SIs are hired to be a trusted advisor, the reality is that on big projects they see an upsell opportunity and can use subtle coercion to drive a customer towards extending the scope… and the cost.

Though Luke’s points are provocative, it’s clear there is a win/win here for a smart customers.

Final thoughts

That’s a pretty good call to action list. I plan to use this as a framework for future editorial, fleshing out some of these individual points with Q/A features and case studies.

If there is any doubt remaining in your mind, I’ll refer you to the now-dormant blog of ‘SAP me sideways’. This anonymous individual documented a troubled project in sometimes excruciating detail. It has all the tell-tale signs that can be avoided by autonomous and networked customers.

The project had no user group involvement to speak of; the author seemed to know very little of what other companies in their industry do to maximize their ERP investment. The consulting partner made flawed or borderline incompetent choices and seemed to have no accountability once the paperwork was signed.

The employees, including the author, seemed to be muzzled into ‘lunchpail’ roles where they had no ability to raise a hand and point out a serious problem. In his countless demoralizing posts, there are no anecdotes of independent experts calling BS or even employees or project leads being encouraged to speak out or share crucial feedback.

These stories are still too common; the project failure headlines keep coming. Proper use of independents is hardly a cure-all, but I hope that a broader discussion, provoked by those who have nothing to lose as the status quo changes, can help in some way.

Image credit: Die Gelegenheit ergreifen © cirquedesprit – Fotolia.com

SAP is a diginomica premier partner at the time of this writing.

Jon Reed

Jon Reed

Jon Reed has been involved in enterprise communities since 1995, including time spent building ERP recruiting and training firms. These days, Reed is a (cough) blogger/analyst and also counsels vendors and startups on go-to-market strategy. He is an SAP Mentor, Enterprise Irregular, and video content producer.
Jon Reed

@jonerp

Enterprise Irregular, diginomica co-founder + SAP Mentor who blogs/videocasts on the enterprise, w/ dash of bootstrappin' + media hacks. OK, I rant sometimes.
Jon Reed
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4 comments
Michael Doane
Michael Doane

Excellent article, Jon. One small addition. While I was covering services firms at META Group, the single most annoying phrase (which I heard far too often) from services leads was "Michael, you must know that we are our clients trusted advisors."  I learned to silently count to five before answering. "No, you are not. You never can be. Your clients know that you always have much, much more to sell them. (Beat). I am a trusted advisor because I have nothing else to sell than advisory." 

In this context, third party independent consulting is more "trusted" and, to your great point, clients who engage independents are themselves more engaged in the projects. Client ownership is thus served and we avoid "leaving it to the experts".

rugbyshrek
rugbyshrek

Great article John.

I think the best takeaway from this is that trusted advisors are hard to find and extremely valuable. Whether they are SI or independent their value lies in being able to speak truth without concern for their own status.

"A bad system defeats a good person every time."

jonerp
jonerp moderator

@Michael DoaneMichael thx - appreciate your validation of the content here as you have seen this from all angles in the field. I was glad that this point shined through: "clients who engage independents are themselves more engaged in the projects".  Some have taken these articles as a bang on the drum of independents, which is true to a point, but it's really a drum for client ownership of projects, with savvy use of 'independents' playing on key role in that. It's a topic (client ownership) I'd like to return to, perhaps we can collaborate on something down the road. 

In terms of the obstacles smaller shops can face, Dave had a good comment on the prior piece I did he said I could repost here: "here we have been successful in getting SAP customers to take advantage of our independent KPI's and benchmarks they realise we have provided them with very valuable and powerful information which they can use to manage and monitor the ongoing performance of their SI's. The problem is this information needs to be made available and acted on at the CXO level and it's very difficult for a small independent to get access to this audience and get them to take actions that differ from what the incumbent SI is telling them. That's why so many opportunities to make major cost savings and process improvements remain unexploited."


jonerp
jonerp moderator

@rugbyshrek Greg I'll go with that. It's not easy to speak to a higher ground beyond your own vested interests, we've all struggled with it. That said for customers who recognize this, the best thing is to have multiple trusted advisors with different agendas or funding sources. In other words a well-run project, from a customer angle, is less like picking a marital partner and more like assembling a (small) orchestra. :)