December 20, 2019 | Jamie Lohrungruang

How to effectively manage IT consulting firms to optimize your project results

What if I say hiring IT consulting firms will only be as successful as the amount of work you put in and the leadership you provide? Would you still want to hire outside help? Isn’t the point of hiring an IT consulting firm to reduce the amount of work you have to do? Well, let me explain.

Most companies bring in reputable IT consulting firms to assist with complex projects. But you’ve probably heard of horror stories about ERP implementation projects that took years to complete, and after millions of dollars spent, the company decided to scrap it. What about implementations that are half-baked but are moved to production anyway, because the company can no longer afford to fix all the issues. They end up with a system that nobody likes but have no choice but to use.

The root cause is you let the consultants drive the project and did not provide adequate management and support during the process. While most consulting firms come in with industry expertise and have considerable technical knowhow, they are not an expert in your processes, nor do they understand your company culture. Without adequate guidance, they will drive the project toward what they think is correct rather than what the company actually needs.

Whether it is lack of collaboration, lack of business support, or lack of leadership participation, the result typically will be a system that doesn’t match the company’s expectations.

Here are a few things that you can do differently to ensure project success.

  1. Understands the requirements and what success really means upfront – It starts from the beginning. Put together a set of requirements that is thorough enough for your RFP process. You also need to understand what success means, and this should be communicated to the IT firms. As you go through the proposal with them, make sure that they fully understand the needs of your company (this means that they pay attention). Selecting the right IT vendor is a significant first step toward a successful outcome.

  2. Get a tight contract in place – Once you have selected a firm, putting the right contract in place can help eliminate some of the headaches that may come over the course of the project lifecycle. Outside of price, scope and the terms & conditions, you also need to include other aspects such as performance, resource replacement, and travel. For example, I always put a statement that talks about the essence of the requirements in my contracts because this deals with questions that may arise about whether particular requirements are in scope or out of scope. The two parties shall review the essence of the requirements using a “reasonable person standard” to determine if it should be in scope or out of scope. I also include conditions surrounding the replacement of resources. When working with consulting firms, there are instances where their IT consultant may leave or may not be performing up to your standard. The language should include a statement that you can replace any consultant that are not performing at any time. It should also include a 2-week knowledge transfer period where you don’t have to pay for the services during the transition period. Lastly, you should put a cap on the expenses and make sure that they adhere to your company’s travel policy.

  3. Planning – When the consulting firm share their project plan, take the time to review and understand it. Meet with them to make sure everyone knows what each of the critical activities are. One example I can share is during one of my ERP implementations, we discussed the details in the plan for Blueprinting. I asked for clarification on some key activities, thinking that a demo of the ERP solution will be part of the blueprint. The consulting firm stated that they plan to show the process flows in PowerPoint. We felt that the PowerPoint presentation wouldn’t have the benefits as an actual demo. We revised the plan and it was beneficial. Most users are confused with process flow charts so having something to visualize is exceptionally useful in our case. The point is, understand the plan, and make changes to it to make sure things you want to be done are included.

  4. Project Execution – Participate and provide the support to the consulting firm. Help them drive critical decisions and provide the business participation needed. It is also important for you to clear roadblocks because these consultants don’t know your internal politics. If you notice that your existing consultants don’t live up to your expectations during the execution phase, replace them as soon as possible. The longer you wait, the more issues down the road you need to resolve. Helping direct the path of the project throughout the execution stage will help increase the chance of success.

  5. Organizational Change Management – OCM is often overlooked, but it is one of the most crucial aspects of any complex project. The consulting firm you hire should have strong OCM support. It is more than just training and communications. It should also identify how changes will affect the organization. They then need to map out how the organization should handle these changes while making sure that those impacted feel comfortable and understand the new process. Dealing with change is extremely difficult, so ask and make sure your OCM leads know what he/she is talking about and have a solid plan of action in their hands.

  6. Communications and Project Governance – Lastly, engage in the governance and communications process. The consulting firm should work with you to over-communicate because it is challenging to get everyone on the same page when change is implemented. Over communicating and then follow up with key stakeholders in the company may be required to keep everyone on board. You also need to make sure that proper processes are in place from a governance perspective. Utilize the steering committee to make critical decisions and then document and communicate the decisions made to all parties. If you are implementing a SOX controlled system, the type of documentation you need for future audits should be identified. The consulting firms must work with you to adhere to the governance process you want to have in place.

Working with an IT consulting firm is an integral part of most organizations. How well they work for you is based on how much work you put into the relationship. Follow these guidelines, and you will see how effective your partnership with consulting firms can be.

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