What to Consider, How to Select a Consultant

Unless you have a full staff of professionals, chances are you will need the resources of a consultant at some time. The process involved when selecting the right consultant is an art that very few small business owners have mastered.

Having worked in the technical sector of the cable telecommunications industry for 23 years, I can speak with some authority in this area, as I have worked as a consultant for over 10 years. In the capacity of technical management, I selected and rejected numerous consultants.

I would like to share some practical tips on what to consider and how to select your consultant - From someone who has spent considerable time on both sides of the fence; I hope you gather some helpful information from my perspective.

Be assured that your consultant has actual hands-on experience working in the corporate or plant settings. Very few have even actually worked in the product manufacturing industry. Many, and worst case scenario, come straight from college. You can research this quite simply, by looking in the employment opportunity section of any industry publication. You will undoubtedly find ads for ``telecommunications consultant" seeking persons with 0 to 5 years of experience! Chances are that there are very few consultants who have the experience of having to manage a corporate quality compliance program or technical training department on a limited budget.

If you have someone straight out of school as your consultant, you are in effect paying him to learn while he earns. Your best bet is to hire a consultant with real and actual industry experience - someone you will develop a better rapport and communication with. Bright as the academic type may be, you need someone who has the ability to avoid or remedy a problem, not study a problem to death.

I cannot over emphasize this point. Do not, or why would you want to, hire a nationwide consulting firm with 100 offices in op-teen countries and 5 continents to design a few hundred or a thousand miles of plant for you. You are definitely asking for trouble if you do. "Why?" You ask; you will end up paying for the firm's huge overhead. You're paying for their vice presidents' worldwide travel.

The young college-boy engineer assigned to your crank-out-a-plant project is billed out to you at $200 a mile. His paycheck is closer to $25 an hour. The bottom-line leftover goes to pay for his firm's huge overhead. For small jobs, say under $50,000, you'll be much better off in most instances by hiring a small firm that specializes in the specific area of your interest. Most promising, and those like myself, are experienced independent consultants. Such are excellent candidates for these kind of small projects. Many are dedicated professionals who have left large consulting or engineering firms to start their own businesses.

You will be better off by paying considerably less per mile to an independent designer or consultant with comparable experience. The best of both worlds is that, they get to double their income and you save significant dollars! What's better than that?

In my experience, independent designers with good reputations are pride driven individuals who generally produce a higher quality of production work at a much lower cost to you. My experience also dictates that smaller design companies or individual consultants are generally more accessible and therefore responsive to their clients' immediate needs. Commonplace and new communication technologies (such as email, e-fax, voice mail, laptops, etc.) have ultimately closed the gap between large and small firms. Unfortunately, the unjustifiably high overhead charges for large firms remain.

The large firms of course, will sales talk you to death, spewing the great benefits of associating with their firm's vast array of experts, and the resources available at the snap of your fingers. In that, lies the bullshit! Sales talk! In most large firms the right hand has no idea what the left hand is doing. Resources are spread out so thin, that most of their employees have no idea what their associates are doing, much of the time. Large firm consultants and network designers are assigned to their own individual projects, and it's commonplace knowledge that they don't know who you are, and could care less.

If you need big by all means go big, if not then look elsewhere, for your own sake.

Here is a "red flag" tip. Have you really, truly, ever wondered or been approached by an engineering firm or consultant who claim themselves as a "full service company" and are "uniquely qualified" to do what you need? - Even before you tell them what your needs are. It's become more obvious within our industry, that any company with more than a half dozen employees is advertising themselves as ``full-service".

If the truth were told, NO ONE, - not any company, consultant, or engineering firm can provide full service to all clients.

Many large engineering or consulting firms exhibit very strong competencies in some areas but totally lack any expertise in another. When your project requires multi-talented expertise, these "full service companies, utilize the unique service of other qualified companies, a team effort - if you will. The largest firms available for the largest projects, with thousands of employees apply this approach to their client's projects. Absolutely nothing is wrong with this team effort, except that the mark up from each individual company's work ends up being paid by you. And again, you're paying that huge overhead or the 15 to 20 percent subcontractor markup!

I was new to the industry once, and I got my start at the bottom, guilty as charged. How would I know what goes on behind those big mahogany double doors?

Have you ever released your project to some bigwig firm, with the understanding, assumption, or even the promise that some Project Manager with 20 years of experience will be dedicated to your projects? Have you ever done any follow-up on that promise? I would not hesitate to say that you would found out that some college-boy with 0 - 2 years of experience is now working on it. Or - studying some problem to death!

Be very specific in demanding that the person promised to the project will be the one actually working on the project. Stipulate that any personnel change must be made with prior written consent from you – after all, You Are the Client.

5. Watch Out for Billable Quality Assurance.

Never gave that one a thought did you? Or maybe you found out the hard way. When reviewing any proposal from any consulting firm large or small, always take note of the number of hours proposed for QA (Quality Assurance) review. The normal practice for many of the larger firms, consultant, and engineering alike, is to put in these hours as justification to keep their top executives more billable.

There is one basic fundamental reason why I take great exception to charges billed for quality assurance.

Consider this scenario, We'll use an hourly rate for simplicity.

You've decided on a company for your HFC design project, they promise to assign "their best" system designer and Project Manager at a rate of $140 per hour for 100 hours. And at the same time, the same company wants a Senior Quality Control Technician to spend another 20 hours at $250 per hour to "review" this "ace" designer and "uniquely qualified" project manager's work in order to assure quality! Hello, does that make sense? Quality is not the reason here. Some Senior Executive needs billable hours.

Quality assurance is the lifeblood of a professional, weather it be a consultant, engineer, designer, or line-worker and should be built into the rate, hourly, miles, piece-rate, the whatever of the person assigned to the project. It is part of the firm's cost of doing business – its overhead.

6. Withhold final payment and provide incentives and reward.

It may be in your best interest, especially if dealing with a large consultant or engineering firm, to hold back at least 10 percent of payment until you are completely satisfied with the status and progression of your project. Remember that it is your right as a client to be specific and make demands. Such may be the case on projects that are large, or have specific phase deadlines and/or projected savings to you; it's not uncommon to include a penalty clause for missing a projected deadline and on the other-hand, a cash bonus or incentive for early completion.

7. Manage Your Time-and-Material.

If you are contracting a consultant or firm for time and material, it is imperative that you watch, study, and review his time spent on your project very carefully. You should ALWAYS put in a "not-to-exceed" or ceiling amount when signing a contract of this kind. You would be surprised; probably even amazed how many consultants will come within a nose-hair of your ceiling amount. In trade jargon, it's known as the "don't ever leave any money on the table" doctrine. I once heard of a young college-boy academic type, who almost got fired because he left money on the client's table by trying to be efficient.

Another truth in fact is; you need to be able to manage consultants, as well as make a good selection. You must make sure that you do have money left on their table.

8. Be Wary of Specification Changes

I was once with a major CATV product manufacturer/engineering/consulting firm in New York State many years ago, I spent a good number of hours preparing system distortion calculations and design specifications for our clients cable systems. Now I must admit that particular company knows the cable and telecommunications business, inside and out. This little tidbit of relevant insight does not pertain to my personal experience. However, depending on what the engineering or consulting firms' deliver to you up-front, versus how many times vital data changes could be causes for major concern. I do know of an instance when a system owner got so concerned about the cost over-runs that they demanded a tracking system be set up and the numbers of hours spent by each consultant on different tasks be reported on a monthly basis. As I was told, they were only too happy to comply with their client's demand. That meant an extra 15 hours per month for the engineer to prepare the spreadsheet and submit the monthly report to the client. The client paid for the time to track cost over-runs charges as well as the actual cost over-runs. Good work if you can get it.