Taking sweets from babies

30 Oct 2003

The age-old way of coping with deficiencies in skills and expertise in organisations is to hire in ‘the professionals’ — the consultants who can bring all the answers and justify the big spends. Of course, they don’t come cheap, but they do produce impressive documentation and that’s critical in organisations that survive and thrive on ‘documentation’.

What a lot of people tend to forget, however, is that consultants are in business primarily to stay in business. There’s nothing in the world wrong with that. But it costs a lot to stay in business especially if you’re big. Someone suggested to me recently that the riding instructions from the typical senior partner is something to the effect that ‘if you can’t be part of the solution, make sure you remain part of the problem for as long as you can’.

This concept is euphemistically referred to as ‘client management’. This can translate into recommendations that either leave doors and windows of opportunity to the very same consultants to come back later to solve the problem or to a solution which, for some strange reason, locks the client into a long-term relationship because of some proprietary aspect of what they have proposed.

This latter scenario is quite common and is made possible by the fact that many people dealing with the consultants are not sufficiently trained to spot the wool being pulled. While it is not confined to the private sector, the public sector is particularly vulnerable because of the absence of a hard-nosed business ethos that you find in most private sector corporations. One of the consequences for the public service of the [recently departed] boom has been a drift of IT professionals to the private sector. It’s hard to blame them when the private sector offered juicy rewards way and above what could even be dreamed of in a world of controversial benchmarking, and grades tied to specific salary scales and vice versa. The net effect is that there are fewer really experienced and talented people to drive the IT agenda across the public service.

So, for instance, you might find a well-intentioned person stipulating that a particular system must be built on open architecture or open systems to avoid downstream costs when a system is being scaled up to full operation — some would say this is the very antithesis of what ‘consulting’ is all about. In such situations you may well find that the consultant nods in agreement at the wisdom of all this openness and then, when the contract is won, all sorts of problems start to arise that make it difficult, if not impossible, to pursue this worthy policy of open systems.

Eventually the client is ‘persuaded’ to go for the easier route of choosing the proprietary solution. Well, it works, and there’s no risk of delay. For many ‘consultants’ this is as easy as taking sweets from a baby.

The problem is that the costs then start to seriously mount. The way it works is that at negotiation time, the consultants tend to try to put the frighteners on the client about taking untried paths. The best deals, as far as consultants are concerned, are those where a lot of details are left unresolved — where costings are based on assumptions (such as the use of open systems and so on) that tend to become unravelled as the ‘solution’ unfolds. This then leads to very costly changes. ‘Change control’ is what they call it. You can be guaranteed that this is the area where they devote considerable time and effort during negotiations because, ultimately, this is where the gravy train really rolls.

But what can be done? It’s no use pointing the finger at the hard-working consultant because the onus is very much on the part of the client to proactively manage the relationship. While it’s fair to suggest that the consultancy houses will have to focus more and more on delivering actual, measurable value, the answer lies primarily in the way the business is transacted. We know, for example, that some of the big consultancy houses have specialists in deal making. These people are particularly talented at the kind of ‘ball squeezing’ that it takes to make big deals.

They may not be necessarily too aware of the technology, but they certainly know how to cut a deal. In a situation where we have a disjointed public service (the divided enemy, if you like) with little business experience to speak of, it stands to reason that the risks of being taken for a ride are enormous. And there are many well-documented cases of public sector projects costing far more than originally anticipated.

The secret in addressing this is in having people skilled in dealing with private sector contractors — people who can recognise the stiletto behind the smile and who know where the danger lies. But how many public servants have this skill? Is there a case for another type of expert other than the usual ‘techies’ that are left to do the deals? True enough, you need to have smart people who know the technology. But you also need the tough people who have a sense of what a good deal is — where the risks are and how to manage them.

I doubt very much if there are many in the Irish public service who have been properly equipped to deal with the ‘smiling predators’ that they frequently come up against. This isn’t so much a reflection on the individuals themselves — who no doubt are committed and dedicated to doing the best job they can. It’s more an indictment of the system that doesn’t see or hasn’t yet seen the need to have these skills available at the crucial stage of contract negotiation.

It doesn’t necessarily mean that they have to be in-house either. Paradoxically, the solution may well be available in another class of ‘consultant’ who is not aligned to any particular technology supplier and who is competent to act on behalf of the client in the tricky job of contract negotiation and management. One such consultant recently told me about the competing agendas of the classical consultant and the vulnerable client. As he sees it, the ‘big house’ consultant is looking for high complexity, early obsolescence, open-ended scope, room to add in costs through ‘change control’, devices to lock in the client, camouflaged complexity (what originally seemed easy turns out to be a costly nightmare), proprietary architecture, control of the client and, most of all, maximum return for his ‘big house’. On all of these, the customer or client has an opposing agenda.

Clearly, therefore, there is a strong case for using people who know how to spot what’s actually going on because they could save considerable downstream costs. There are those out there who are not burdened with earning big money for the [frequently foreign-based] ‘firm’ and who can be relied on to work in the real interests of the client. In the absence of in-house skills it makes sense to look at these both as doers and trainers — people who can transfer the skills that are needed more and more in a world of increasing outsourcing, contracting and high-cost projects — a world in which ‘sweet-takers’ should be recognised for what they are.

By Syl O’Connor