IT consulting game gets a brand new rule book

Back when I first began to provide IT consulting, it was considered unprofessional, if not immoral, to undertake assignments where the fee was contingent on the benefits obtained. It was too easy for the consultant, or the client, to abuse such an arrangement. The consultant could force down inventory levels to increase their fee, even if the effect on the client was negative. Clients, in turn, had the ability to adjust the numbers in such a way as to deny the consultant fair compensation.

The consultant was expected to be a professional and always work towards the overall best interests of the client. The best consultants did behave in this way. Harvey Gellman, one of Canada’s first IT consultants, lived by the adage that “The client is king!” He passed on to me, and to all of his associates, a commitment to always putting the client’s interest first. It made no sense for clients to offer Harvey a fee contingent on results, as they would automatically get his best efforts.

Times change. The Canadian Association of Management Consultants ( now recognizes that there are situations in which the consultant’s fee can be contingent on benefits or results. Their Code of Ethics specifically allows contingent fees, but requires that the risks, assumptions and measures be clearly identified before the assignment begins. Indeed, some of the large outsourcing contracts almost demand a risk and reward sharing arrangement between consultant and client.

There has been a gradual shift away from consultants being retained to provide advice for clients with concerns, often quite general in nature. The rationale for such assignments doesn’t have the dynamic punch now required in business. Clients today have specific and particular problems. They retain consultants to solve those problems. It’s all far more focused. And with this more focused approach comes a requirement for more focused consulting qualifications.

The potential consultant needs the specific and particular credentials that will prove to prospective clients that the consultant has the knowledge required to solve their problem. For technical problems, there are a raft of vendor certifications which can be used to prove the consultant has the requisite knowledge. Having the knowledge and knowing how to use it effectively are not always the same thing, but having the knowledge is an important first step.

Technical knowledge, backed by the right vendor certifications, is increasingly important for consultants early in their careers. Process knowledge becomes more important as consultants advance into mid-career. The client wants someone who knows how to solve such things as the project management problem or the IT service delivery problem. In many cases there will be a vendor-independent certification to prove required process knowledge, e.g. project management or ITIL certification.

The alternative to this proof of knowledge approach is to become part of an outsourcing team. The team, or the outsourcing vendor behind the team, has the resources required to share risk with the client. The client solves her problem with X by retaining an outsourcing vendor to take over responsibility for X. It doesn’t always work out quite as expected, but one can almost hear the initial sigh of relief from the client as the vendor steps in and assumes “full” responsibility for the problem.

The old image of the consultant as a trusted and professional adviser has largely disappeared. Increasingly, the consultant is present to solve specific and particular problems, not to be a trusted adviser. The business coach has significantly taken over the advising role. The advice is directed to one person and is a one-on-one personal activity. It may address a similar psychological need, but the dynamic is different — and so are the credentials.

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— Fabian is a senior management and systems consultant in Toronto. He can be reached at [email protected].

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