On Using Consultants

Reprinted from "Consumer Goods Technology" October, 2000, used with permission
A consultant is someone from out-of-town with a briefcase.
A consultant takes your watch and tells you what time it is.
If a consultant is a hammer, every problem you have soon looks like a nail. 
A creative consultant can invent a business case impressive enough to justify exorbitant fees...
The list of consultant jokes continues to mount, as do both the horror stories and the success stories of using them.

Past surveys of consumer goods and retail executives have repeatedly revealed that all but one or two of the top ten obstacles to proceeding with some major type of technology implementation that is already recognized as important and valuable are what consultants provide. 
That’s why most companies can’t progress quickly enough without consultants. So here is the combined advice of numerous consultants, consumer goods executives, and ex-consultants about whether to retain a consultant, how, and what to do during the engagement.
When Should You Hire a Consultant?

1.           When you don’t have the resources, skills, or knowledge in-house.
2.          When you need an objective point of view to avoid company politics and help win buy-in from affected parts of your company.
3.          To reduce the risks of undertaking a big project on your own. 
4.          To bring in knowledge of best practices from your industry–or from other industries.
5.          So that your employees can focus on current priorities.
6.          When your staff does not understand what’s available in the marketplace or the pitfalls in implementing such an initiative.
7.          When you are not fully certain that your problem is the problem, or just a symptom of the real problem.
8.          Avoid retaining a consultant to solve leadership problems.
Avoid the Common Pitfalls Or How to Hire a Consultant

1.     Make sure you have a clear idea of your goal up front. You could establish one in a first meeting or have the consultant prepare a diagnostic study at relatively low cost.
2.     Make sure you have the commitment within the company for the consulting project to avoid uncooperative entanglements and suspicious employees.
3.     Make sure you have the resources within the company to continue the project after the consultants leave and that those resources will have obtained the knowledge and skills needed.
4.     Create milestones for measuring the success of a consulting project, and pay the firm based on those. Some prefer a fixed-fee contract, so that you know the price up front.
5.     Hire a consultant based on highly specific recommendations, not based on a safe-sounding brand name.
6.     Firms do not have the knowledge and skills you need; people do. If you retain just a specific firm rather than specific individuals, you could be buying ghosts. A firm with an excellent name or reputation does not always deliver excellent results. Name specific consultants in the contract.
7.     Make sure you and your consultant have a cultural fit. Trust your gut. Avoid people with whom you feel uncomfortable.
8.     Beware “scope creep.” Most consultants are seeking a long-term relationship with your company-the longer the better. Some want you to become dependent on their services. Many seek opportunities to “grow the assignment” once they are retained. You have to control the scope of the assignment. Make this clear from the beginning.
9.     If knowledge transfer to your staff is needed, make it part of the contract.
10. Avoid false business cases. You might be surprised how often the numbers get cooked to make a favored project more likely to be approved. 
11. Review plans for education, training, and change management with the knowledge that most companies grossly underestimate this step, and that consultants often skimp on this budget too.
12. If possible, work with a consultant that has local offices or move people temporarily to reduce travel expenses. Even information technology offers remote access, face-to-face contact is still important.
13. Choose a consultant that knows your business sector and can speak your employees’ language.
Top 10 Obstacles to Implementing Technology-Enabled Supply Chain Initiatives:
1. Staff/resources needed are already committed elsewhere
2. Business case not yet developed
3. Incompatible systems
4. Lack of proper alliances with outside organizations
5. Unreliable or poorly performing systems
6. Inadequate payback indicated from business case
7. Can’t recruit sufficient IT staff
8. Lack of industry/technology/practice standards
9. Lack of skilled/qualified end users
10. Users resist supporting it
Source: Consumer Goods Technology Supply/Demand Chain Survey, 1999