The phone directories, web directories and the Internet (in general) are crammed with consultants. It is, perhaps, one of the most common words in the B2B and B2C world but what does it really mean?
- Does the word ‘consultant’ have any validity in the business word any more?
- Have we got to the point where it might be off-putting?
Like a lot of things on the internet nowadays, it is a matter of trust. We have, perhaps, been lulled into a false sense of security over the years by the large firms of accountants and large software houses who seem to get the lion’s share of the work from government, semi-state bodies and the corporate sector.
- Are they advisers or suppliers?
- Are they using your company as an R&D guinea pig for their products?
- If they’ve already ‘done it’ for one of your competitors, do you want ‘a copy’ your competitor’s system or one that is unique to you?
- If they translate your great business idea(s) into a great new system that supports and/or enables it, do you really want them to sell this on to one (or more) of your competitors?
I am particularly interested in new system selection and existing system enhancement. Too often I see huge amounts of money wasted on over-priced systems, systems that force the business to change instead of the system, and systems that are simply ‘not fit for purpose’ but implemented anyway.
The results include :-
- time over-runs
- financial budget over-runs
- system implementation conflicts
- system failures
- business failures
The fault often lies with the consultants and, more often than not, it lies with the organisations themselves who over-rely on heavily biased consultants’ opinions, and do not undertake due diligence themselves, or via a trusted, independent third party.
- If you do not know what you want (a formal Business requirements Document, or BRD), the supplier will be able to tell you what you want.
- If you do not know how you want it work (a formal Functional Specification of Requirements), the supplier will be only too happy to tell you how their system works.
- If these two important documents do not form part of the competitive tender document pack, potential suppliers cannot accurately quote a price for their products and/or services.
So, next time you are thinking about changing an IT system, or implementing something new … answer the following questions.
Is it ethical for a consultant to bid, or to take part, in a competitive tender that they are running?
- I don’t think so.
- Would you pay a car sales rep to advise you on what car to buy?
- There are too many conflicts of interest at many different levels, i.e. the client’s best interest and their employer’s commercial interest may be at odds with one another.
– selecting potential suppliers
– shortlisting potential suppliers
– system selection
– pricing and contract negotiations
– service level agreements (SLA’s)
Is it ethical for a consultant to project manage his/her own firm’s system delivery and implementation?
- I don’t think so.
- Again, there are too many conflicts of interest at too many many different levels, e.g.
– project planning, milestones and key dates
– scheduling, time and financial budget over-runs
– scope management / scope creep
– managing expectations
– interpretation of and adherence to SLA’s
Is it ethical for an auditing firm to assess the value, efficiency and/or effects of a system that their own firm (or an associate firm) has sold, delivered, implemented and/or project managed?
- I don’t think so.
- Once again, there are too many conflicts of interest at too many different levels, and what is in the client’s best interest may be completely at odds with their employer’s commercial interest(s).
- The consultant must be independent
- The consultant’s employer must be barred from entering the competitive tender process
- The client’s auditing firm must be barred from entering the competitive tender process
- Never lose sight of the fact that this is a business project, not an IT project
This is the ONLY way a business can be sure they are getting independent, objective advice and pragmatic help at every step of the system selection, delivery and implementation process.
The conflict of interest
In the aftermath of the Enron bankruptcy questions are being raised over whether it is appropriate for an accounting firm to sell so-called “non-audit” services to clients it audits.
In the Enron case Arthur Andersen had the dual role of auditor and consultant.
The concern is that the accounting firm would choose to be less strict and stringent during the auditing process to avoid upsetting the client and losing non-audit consulting contracts. These non-audit services include IT services, such as IT consulting and systems integration, which have become a big source of revenue for accounting firms in recent years.