Consultants vs. Contractors
There''s a difference between consultants and contractors. Contractors are temporary help. They may be incredibly skilled in a certain area or they may simply be the cheapest or fastest way to build an IT or accounting department. Contractors generally have roughly interchangeable skills. Many of the offshore coding houses provide contractors onsite, as well. Consultants are usually brought in to help decide how a problem will be solved, in addition to actually solving it. Consultants usually run in packs. In most cases, if you''re going to present yourself as a consultant, your clients expect you to bring along your own experienced laborers to actually implement the solution after you help them decide what it will be. Consultants who only participate in the problem-solving piece without the implementation piece have much more difficulty finding projects, and need more projects to keep busy since the decision phase is typically only about 10% of a project lifecycle. The implementation is where the money is because that''s where the manpower is required. There''s nothing wrong with being a contractor rather than a consultant. Consultant may sound more glamorous, but if you''re calling yourself by the wrong name, you will probably fail to be considered for those jobs you should get. |
Lately I''ve heard from a lot of readers who are "going into consulting." From what I can ascertain, it appears that most of them are coming straight out of school or some sort of formal training (if not degree) program. The rest of them are victims of dot com cutbacks.
Virtual Consulting: An Idea Whose Time Will Never Come
I wish you all well, but I have to warn you: There''s a lot less consulting work than there used to be. About once a month I get e-mail from someone enthusiastically asking me if there is any software on the market that would facilitate virtual consulting, or if I know of anyone doing it. These friendly readers had the original idea of offering consulting from afar, usually offshore, without any need for face-to-face contact. These entrepreneurs have looked at the highly inefficient consulting process and calculated how much money could be saved by businesses if they could hire consultants who didn''t have to come on site.
The only problem with this great idea is that the consultant-to-be doesn''t realize that work product isn''t the only thing he is selling the business. If this person is truly a consultant, rather than just a contractor, then he would play a role in boosting the confidence of the executives and has his or her own experience to leverage. The consultant may also provide political cover for the executive responsible for the project, as in, "We investigated our options for providing enhanced internal security, and with the help of KPMG, we implemented a robust, scalable solution." In high school, we called it name-dropping. In business, we call it credibility by association. And there''s nothing wrong with it if, in fact, the executive is relying on the expertise of the experienced consultant, rather than just hiring someone to implement a bad decision he''s already made.
The Value of Being On-site
If you''ve ever interviewed with one of the big consulting firms, you know that they''ll tell you to expect to be on the road at least 50% of the time. Chances are, they''re not going to send you to exotic locations, but to the Des Moines, Iowa school district to work on an e-procurement project for three months. Nowadays, everyone is wired to the Internet and there''s not a lot of technical justification for having everyone on-site for the length of the project. In addition to the cost of housing and feeding the on-site consultants, and the cost of getting them there and home with some regularity, there''s the cost of replacing these folks when they get tired of all the travel. Most of the work could probably be done remotely after a week or so on-site meeting the team, getting a schema walk-through, and learning the naming conventions and server names. Why, then, do all these big name consulting firms keep their help on-site when it only increases the bills for the clients with little of that money going into their own pockets (instead it''s going to Residence Inn)?
The reason these consultancies spend the money and burn through the employees by having an on-site presence is because they realize that consulting requires constant selling. When a consultant is out of sight and out of earshot, chances are, someone within the company is questioning his decisions or questioning his fees. Consulting rates appear exorbitant. To calculate a ballpark figure for your hourly rate as a consultant, take your annual salary, divide by 2000 (to get your current hourly salary), then multiply by four. If you make $65,000 per year, that would translate to $130/hour. You can see why an executive would balk at paying that price for people who are going to be working along side his own employees that make $65,000 per year. For that price, you''d better be doing a lot of selling.
How do consultants continue to sell their services? Every weekly status report is a sales brochure. Forget about a simple Excel spreadsheet showing hours worked on each task. Think in terms of a multi-page, multi-color analysis of what was accomplished, what''s planned for next week, and how everything accomplished fits into the project plan. Of course, the status report could be compiled offsite.
Consultants also sell themselves by dressing the way an executive wishes his own people would dress: as if they''re coming to work, not coming to play foosball. Project plans are printed on paper, not on white boards, and project plans are updated weekly with plans for meeting any milestones that appear to be in jeopardy.
Remote Consulting Not Impossible
Now that you understand why virtual consulting is virtually impossible, I''m going to tell you how you can still make it work. There are three things you have to do if you want to have even a ghost of a chance of doing remote consulting: specialize; gain credibility; and choose your clients carefully. Next week, I''ll go into detail about how you can make remote consulting work. If you do remote consulting, drop me a line and tell me how you make it work ... if you don''t mind sharing your secrets.
Alexis D. Gutzman is an E-commerce Technology Author and Consultant and author of The HTML 4 Bible, FrontPage 2000 Answers!, and ColdFusion 4 for Dummies. Her newest book, The E-commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena is now available. She can be reached at agutzman@internet.com
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