Whom Do I Hire, Consultant or Contractor?

[caption id="attachment_332" align="alignright" width="225" caption="Who Are You Going to Hire?"]Young woman leaning against something[/caption]

Unless we change direction, we are likely to wind up where we are headed.  – Chinese Proverb

Continuing the discussion from two prior posts, “Blood Type of Consultant” and “Blood Type of a Contractor“, an obvious question is when should a consultant or contractor be hired.   Given that these terms are often used inter-changeably these days, it is perhaps best described with the following example.

As an executive, you find yourself in unfamiliar waters.  You have a groundswell of demand for collaborative and Web 2.0 technologies and many are currently used within your organization.  While you have concerns over reliability, security, availability, on-going support, and a variety of other topics, you realize the value of these technologies and know that the promise they show will be of tremendous value.  Given your extensive knowledge and relationships within the company, you know that of the 360 degrees on the compass in which you can direct your company, you have narrowed the down a possible directional choices to “generally northwest”.

Hiring a consultant at this point would provide significant leverage for you and your staff.   Given the magnitude of the decision on the organization, you may wish to bring in a consultant for each specialty discipline.   For example, you may bring in a consultant for understanding and plotting a direction for the organization, process, and business model implications to be addressed.  Another consultant may examine and advise on the technology platform, technical architecture, and data integration issues.    With the solid frameworks and experience of the consultant(s) coupled with the understanding of the uniqueness of your organization which will be provided by yourself and key people in your organization, you should be able to narrow your direction from “generally northwest” to “15-18 degrees north-northwest”.  Part of this precise direction will be road map and set of actions to be taken to move you towards your goal at a pace with which you are comfortable.  Financially, the premium you will pay for consultants will pay for itself many times over through focused implementation, quicker time to market, and greater confidence in benefit realization.

Given that this is new territory for you, it is likely that you do not have the sufficient talent on hand with both the  experience and availability to execute against the road map which you have completed with the consultants assistance.  Enter the contractors.  The term contractor has fallen out of favor today as the term consultant has come to mean all external labor.  Contractors are exceptionally talented people who execute relentlessly and efficiently against the defined road map.  Bringing in talented contractors will also bear with it a price, while less than the cost per hour of consultants, you will expect to use them for a much longer period of time as implementation will typically take many times as long as direction setting.

The reality of the situation is that firms which provide services of both consultants and contractors (one stop shop) will have a very convincing story to tell and you will most likely be able to minimize the vendor management impact by going with a single “consulting” firm for both stages of this engagement.  It is important to remember, that there are two distinct phases in this plan, and that these are carried out by separate types of people.  Consultants and contractors have different strengths and correspondingly different blood types which allow them thrive in their respective roles.

At the end of this engagement you should be confident that by using the right blend of talent to support your staff, the great uncertainty and uneasiness which you started with is replaced with a confident in that you have capitalized on an opportunity and leveraged your organization into a better place.

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