I’ve known people in the business world that don’t believe in using consultants. These people believe that consultants are over-priced hacks who “borrow your watch to tell you the time”. Like any industry, there are consultants that provide poor service and give their industry a bad name. When a company pays anyone to provide a service, they need to do the due diligence to make sure they can do what they promise. But once a company finds a consulting firm that is good at what they do, their rates can often scare them away. So why would anyone in their right mind pay those high consulting rates?
Why you would need a consultant
Let’s look at three main reasons for which an organization might hire a consultant
To bring in an expert
Perhaps the work you need done is not your core competency. Using a personal example, let’s say your job at home is to be the dad. You may be a great dad, but your plumbing skills are just not up to par. When the kitchen sink starts to leak into the cabinet below, you have two options. You may try fixing it yourself and risk making a bigger mess than you already have. Or you could hire a plumber who knows what he or she is doing – allowing you to use your own time more productively.
I consider myself to be pretty handy around the house. I have tools and I’m not afraid to use them. But aside from tightening the occasional washer, plumbing is not my strong suit. When there is water in the kitchen cabinet, I recognize that I’m the dad and not the plumber. I’ll be several dollars ahead paying an expert to take care of it.
When a pharmaceutical manufacturer develops a new drug, they need to follow stringent federal guidelines to test that drug’s effectiveness. Most of these firms recognize that their specialty is in the design and manufacturing of drugs. There are firms that specialize in clinical studies to test the outcomes and comparative effectiveness of drugs. The manufacturer can hire a firm to do the studies for them so they can focus on developing new drugs.
To perform a project
As I said, I’m pretty handy. But if I decided to build an addition on to my house, I would hire a general contractor to manage the project, coordinate the appropriate electricians, carpenters, carpet-layers etc. to do a quality job that meets our local code requirements.
A business organization may have its own IT staff that competently maintains their existing technology infrastructure. But when the company decides to start a major project requiring significant custom software development, management will usually bring in a consulting firm that knows how to manage the project and do it right.
To temporarily augment their staff
At home, you may have enough time to get all of your work done around the house in a typical week. But your job could assign you to an out of town project that requires you to travel Monday through Friday for several weeks. On top of that, your son is busy with soccer practice every night after school and games on the weekends. Suddenly you’re short-handed around the house. You could just let the grass grow out of control, use your precious weekend time mowing the lawn yourself, or you could hire a neighbor kid to do it for you until things settle down.
Most companies have an IT staff to maintain their existing systems. If a new set of requests or a new government compliance requirement comes up, they may not have enough staff to complete all the work within the required time. Rather than going through the cost of hiring full-time employees when help is only needed temporarily, the company may opt to contract with consultants to come in for a period of time to complete the work.
The value of a consultant is in the flexibility of bringing in an expert, managing a large project or having access to specialized skills for a specified length of time. Consultants are usually more expensive on a per-hour basis than an employee, but it costs much less in the long run than hiring full-time staff and then laying them off when they are no longer needed.
Consultant’s billing rates can cause sticker shock in the freest of spenders. But when you compare the cost to the actual value they provide, they can be one of the biggest bargains you can find for your business – or your home.
Why else do you think an organization would you need a consultant?
If you would like to learn more about working in consulting, get Lew’s book Consulting 101: 101 Tips for Success in Consulting at Amazon.com
As always, I welcome your comments and criticisms.