Updated: Sep 16, 2020
It’s true to say that over the years, many consultants have learned how to take clients for a ride for their own financial gain. Our aim in this blog is to help you identify the particular traps used so that you are in a position to avoid the “rogue traders” and instead find a consultancy whose priority will genuinely be your business and its specific needs.
But it’s not just consultants that get the bad press. The client can also be held responsible if they don’t clearly convey their needs at consultation stage, or worse still, once a project is underway.
Let’s take a look at some of the methods adopted by less-than-honest consultancies to benefit themselves, and at some common oversights from the client side, to get a better understanding of how to avoid falling foul of these tricks:
This is at the crux of the deception by dishonest consultancies, who will intentionally advertise their services at a lower cost to what they know to be realistic. And why would they sell themselves short, you may ask?
Here at Dimensional Community, our director Ebbe Kjaersbo has 20 years SimCorp experience across the full SCD suite, covering implementation, project/programme management, product management and solution architecture. Ebbe explains: "The consultancy space is competitive so it is very common to provide a low cost estimate in order to get a foot in the door. Then when the 'real' scope becomes clear that is when the cost starts to increase".
These consultants know that they need to pitch low in order to gain the business in a crowded market. They won’t lose out themselves however, as they will be able to add extras onto the bill at a later stage, putting it down to necessary, and expensive, changes to the requirements that are needed in order to facilitate and complete the project. They know that once the client starts the project it is generally more financially viable to pay these extras to “get the job done” than to start over.
In order to avoid falling into this trap, it is advisable to ensure your RFP details all-encompassing requirements so that the consultant has to use a degree of flexibility and cannot therefore lump anything “outside the box” as a costed extra. If the consultant is uncomfortable with this format, it may be worth questioning whether they do in fact have your business’s needs at heart.
Overselling Unnecessary Products
Money can be made by selling the client products to facilitate a project, regardless of whether the need for the product is actually there. Whilst a simple resolution may well suffice, the more convoluted and thus expensive option will bring better financial reward for the rogue consultancies who can exploit margins and maximise the time taken to implement the solution.
"Many so-called solutions provided by consultants are a cobweb of complex customized setups that can take months to implement when a solution readily exists in the market that might not cover all functional requirements but at least it solves for what the client actually needs", says Ebbe.
The key is to remain sceptical about the products being pitched to you and to firstly examine whether they are really essential to the overall success of the project.
Overselling and Under Delivering on Quality of Staff
This is a widespread scam that catches many a client out. The consultant pitches top class delivery using senior contractors, many of whom may be previous or current employees working on other projects. The client may even find itself hoodwinked by the fact that these star players may actually be present at the initial sales meeting. In fact, when it comes down to it, lower tier contractors, without the similar experience, are used for the job.
Whilst more junior staff can be an asset for certain projects for which they do carry the necessary skills, this is only the case if the client is being billed in line with the lesser experience and thus makes a financial saving. The deception lies in the fact that underhand consultants will bill high on the promise of specific expertise, but provide a lesser service, enabling them to take a larger margin for themselves.
"When an organization selects a consultancy firm it is because of the people and the relationship with them, more so than the organization itself", Ebbe tells us. "Having the right expertise at hand is key for a successful implementation, so if the agreed resources are not provided from the beginning you are off to a very bad start".
The best way to avoid this scam is to insist you meet the key members of the team at the sales meeting and to scrutinise their CVs to ensure they genuinely belong to the relevant contractors. It is also advisable to write the key personnel into the contract itself so that, if not delivered, you have this to fall back on. You will smell a rat if there is any resistance from the consultancy, and may decide to reconsider pursuing their services.
Unqualified Consultants and/or Clients
In addition to the above point where a consultant knowingly delivers inexperienced staff, a more inflated issue occurs when a consultancy in its entirety is unqualified to handle a project.
At best, this is a basic lack of knowledge and skill required to achieve the desired end result. At worst, this is deliberate subterfuge. In both cases, the project cannot be a success and is allowed to run on, whilst wasting time, resources and a whole lot of money.
This problem is further magnified when the client side is also unqualified, in that it provides staff without the necessary expertise to oversee the project. The combination of the two can cause utmost disaster for a company as it will just run on endlessly with no chance of a favourable outcome.
"The foundation for a successful project is built on three components", Ebbe illustrates. "Firstly knowledge of the legacy platform. Second, knowledge of the new system, and thirdly a team of visionary experts or Solutions Architects who can create a competitive landscape for an organization. If one of those are not there, the outcome will be poor".
To avert these issues, it is important as a client to ensure your own staff have a full grasp of and the relevant expertise to oversee the project. It is also beneficial to set deadlines that the consultancy should meet, with specific targets to tick off as the project runs. If you need to re-act rather than pro-act, the creation of goals which can be used as markers of the vendor’s progress and aptitude, can assist in taking control of a project that may otherwise take a downward spiral.
Delaying the Solution
Similarly to the above point, this tactic is employed by consultancies in order to maximise the time spent working for a client and therefore increase the reward for the consultancy, which generally bills by the hour.
A simple technique, but craftily done, consultancy staff can easily waste large chunks of time on decision making. Whether this harks back to some of the other points above indicating that contractors just may not have the required skills to come up with the best solution; or whether it is an intentional ploy to string out the time spent on the project, both cause unnecessary delay and increase the man hours for the client who has to foot the bill.
"It is natural that people want perfect solutions and many organizations do not allow for a second phase where all the good ideas can be 'stored' for later", Ebbe says.
"Consultants are quick to create 'must-haves' once they get started on the project. Don't be led astray - it is better to go live with a near perfect solution and make an exception to your policy. Plan for a second phase and stick to the original scope. And once you are live, maybe it is time to consider another consultancy firm for the next phase - one that doesn't delay?"
The answer to protecting yourself as the client is to ensure that you have a good, experienced team overseeing the project so that these issues are avoided from the offset. You also should keep focused on your original goal and ensure that you are not led down a new, more costly, path.
In conclusion, we recommend taking the following checklist into consideration:
Create a detailed RFP listing all your requirements, ask the consultancy to confirm the price inclusions and make it clear you will not accept an increase.
Meet the actual people that will be working on the project and specifically write them into the contract.
Ensure your own team is experienced and educated on the project at hand.
Always keep your original brief in mind and be sceptical. Don’t be pushed to make unnecessary decisions or purchase irrelevant products.
Create deadlines and targets for the consultancy to meet as a way to track progress.