Consulting with others is a powerful way to refine our understanding and judgment, stripping away the emotional biases that often cloud our decisions. This insight is particularly relevant for IT managers today. According to Gartner Group, about 2% of IT staff are external consultants. While consultants can bring immense value, they also require careful management — sometimes even more so than your internal team. This task often falls directly on your shoulders without the assistance of your HR department.

In this post, we’ll explore how to effectively manage consultants in small to medium-sized projects, offering practical insights to ensure your collaboration is successful.

The Challenges of Managing Consultants

Consultants, like any other external resource, can become a burden if not managed properly. Common complaints arising from poor consultant management include:

• Consultants lack sufficient experience and skills.
• They rely on standard solutions that may not suit specific problems.
• Consultants bill based on time spent rather than the results they deliver.
• They often overlook the human costs their work imposes.
• Consultants focus on trivial details rather than addressing core issues.
• They work in isolation from the business, offering impractical recommendations.

Poorly managed consultants can lead to failed projects, wasted resources, and dissatisfied employees. To avoid these pitfalls, you need robust processes in place. Properly managing consultants can be time-consuming, but correcting mistakes is even more so.

Understanding the Costs of Consultancy

How do consultants determine their rates? David Pietsch, a former software and consultancy firm owner before becoming the IT Director at Associate Retailers in Melbourne, shared some valuable insights. He explained that consultants typically start with an annual base salary plus allowable expenses and taxes. For example, a base salary might be $70,000, with an additional $30,000 in overheads. This total of $100,000 is then often doubled to account for factors like training and marketing, bringing the figure to $200,000.

This sum is divided by 1,650 hours (based on a 37.5-hour workweek over 44 weeks), resulting in an initial hourly rate of around $125. However, this rate can increase depending on the consultant’s reputation, the nature of the work, market demand, and expected benefits. Understanding these calculations can provide you with leverage in negotiating consulting fees.

The Benefits of Well-Managed Consultants

When managed effectively, consultants can:

• Significantly enhance your IT department’s capabilities.
• Provide expertise and skills that go beyond what’s available in-house.
• Offer objective and focused perspectives on business issues.
• Operate freely within the organization without being entangled in internal politics.

Steps for Successfully Using Consultants

To ensure success when using consultants for small to medium-sized projects, follow these steps:

1. Carefully Select Consultants

Don’t pick the first name in your contacts list. Define clear criteria for selecting consultants in advance. Ensure you know who will work on the project, who will supervise them, and who will manage the contract. Review the qualifications and past work of these individuals. If a consulting firm lacks internal oversight, ask how they ensure the quality of their work. Research their previous clients to gather insights into their performance.

2. Define the Scope of Work

Make sure the contract clearly outlines the following:

• Who is responsible for the work and under what conditions the contract can be terminated (e.g., failure to perform).
• The inputs, expected processes, and outputs of the project, including content, format, and scope.
• A timeline that includes key milestones and review points.
• The roles of external participants (e.g., business stakeholders or vendors) and their responsibilities.
• How knowledge transfer will be conducted and success measured. Ensure that critical information doesn’t walk out the door when the project ends.
• Clearly define where the consultant’s role starts and ends. Often, internal staff might step back and watch a consultant-led project fail, so it’s crucial to delineate responsibilities clearly.

Finally, agree on how to handle budget increases or decreases. Incentives can be powerful motivators, but be careful that they don’t lead to shortcuts that compromise the quality of work.

3. Properly Orient Consultants

Ensure consultants are well-briefed on your organization. If your company has a formal onboarding process for new employees, include the consultants in it. If not, provide them with sufficient background on the organization, its history, goals, culture, key staff, and expectations.

Consultants need to know your organization to deliver valuable results. Introduce them to the people they’ll be working with and make sure everyone understands their roles and the project’s objectives.

4. Provide Necessary Resources

It’s surprising how many companies pay consultants high daily rates, only to seat them in crowded corridors without proper tools or support. Ensure your consultants have access to the resources they need to be effective, including workspace, communication tools, and administrative support.

Assign someone to guide the consultant through your organization, introducing them to key areas and individuals. This person can also facilitate the transfer of knowledge from the consultant to the internal team.

5. Monitor Progress Regularly

Small projects can quickly spiral out of control if not monitored closely. Make sure your project plan includes regular review sessions. During these sessions, ensure the consultant provides summaries of their proposed reports so you can confirm they are on the right track and identify which reports are necessary.

Seek feedback from all project participants. Everyone involved should feel responsible for the project’s success, so there should be no surprises at the end.

Compare the project’s progress against the timeline. This is often overlooked, but it’s crucial. Remember Rudyard Kipling’s advice: regularly ask the consultant who, what, where, when, why, and how questions.

6. Educate Consultants

You might wonder why you should educate consultants when they’re supposed to be the experts. However, it’s important to remind them of the costs they impose on your organization. For example, if a consultant charges $1,000 a day and takes 20 days to complete a 20-page report, that’s $1,000 per page. Ensure that every page of that report provides value to your organization.

David Pietsch offers two additional valuable tips:

• Invest in Long-Term Relationships: Building a strong relationship with your consultants can yield better results over time.
• Remind Them of Your Priorities: Consultants are there to help your organization succeed, not to criticize it. They should understand that implementing changes is challenging and that you are their boss.

Conclusion

By following these guidelines, you can ensure that your consultants are an asset rather than a liability. If you don’t manage them properly, you might end up spending more time correcting mistakes than achieving your project goals. Keep in mind that while consultants can provide invaluable expertise, they must be carefully selected, oriented, and monitored to deliver the results your organization needs.

Checklist

1. Do you have a clear definition of the consultants’ activities?
2. Do your selection criteria reflect the necessary skills and qualifications?
3. Have you thoroughly researched these criteria during the selection process?
4. Have you arranged adequate briefing sessions to clarify your expectations?
5. Do these expectations include planning, reporting, monitoring, training, and knowledge transfer?
6. Have you incorporated consultants into your organization’s onboarding program?
7. Are all team members aware of their roles and responsibilities when working with consultants?
8. Have you made it clear that the success of the consultant is tied to the overall project success?
9. Does your briefing include considerations for business, technology, organization, process, and people (BTOPP)?
10. Have you scheduled regular reviews of the consultant’s progress?
11. Have you provided consultants with access to your organization’s handbook (if available) to ensure they understand your standards and policies?
12. Have you introduced the consultant to all key personnel they will interact with?