I decided to move into IT consulting in January 2007 after my position as a divisional vice president of IT with Pentair, a $3 billion diversified operating company, was eliminated during a restructuring. I knew I could bring my experience as a buyer of IT services to my new career and the service I provided to potential clients. In the 10 months I’ve been working as a consultant, I’ve learned a lot of lessons that other IT professionals interested in moving from a corporate job to consulting would find valuable.
Becoming an independent consultant is a popular career choice for IT professionals, especially if they are tired of corporate politics or corporate downsizing. IT professionals often view consulting as a relatively easy transition. Though mine has been smooth on the whole, I have made a few missteps as a newcomer to the profession. I share my lessons learned with you so that your transition to consulting goes just as smoothly.
1. Don’t disclose your rates until you understand the scope of the engagement
I recently got a call from a client seeking help with an offshore outsourcing project. The client gave me a one-minute overview of her company’s needs and asked me to provide my billing rates. I told the client that I was interested in their project but was not ready to discuss rates until I had a better understanding of what she was looking for. It’s a good thing I didn’t blurt out my fees when she asked; after meeting with her in person to discuss the project, I learned that her starting point for negotiation was half of my going rate. If I had shared my rates during that initial phone conversation, I would have lost the opportunity immediately. Negotiating consulting rates is a lot like negotiating your salary with a new employer. By slowing down the negotiation process and standing my ground on my fee, I secured the engagement and got the rate I wanted. Once I knew the client’s needs, I was in a better position to explain the value I could bring to the engagement, the rate I should be paid and the reasons for it. Let the client know what they’re getting for their money. Remember, you are selling your services and you have to convince the buyer to pay your asking price.
2. Don’t overbid
Don’t start with a bid for a prospective client’s work that’s too high because you could lose the opportunity, not to mention your credibility in the market. Start with a rate that you think is fair and competitive and stick with it. Clients respect that approach more than when a consultant starts high and comes down to meet their needs. I know I got turned off when I was a full-time IT executive procuring services from consultants whose rates seemed astronomical to me.
If you’re not familiar with market rates, you can ask other consultants what to expect from a particular type of service. Job sites such as Craigslist, Elance, Monster and CareerBuilder that post consulting opportunities will also give you a sense of market rates. Be aware that rates vary by city. Typically, IT management consulting engagements range from $175 per hour to $200 per hour for independent consultants. Those rates are higher for large consulting firms such as Accenture or IBM.
3. Understand your clients’ expectations
Ask a lot of open-ended questions early on when you’re just getting to know the prospective client and before you’ve even agreed to do business. I always ask the following questions:
What is your end goal? How will you know when you’ve achieved that goal?
The client’s answer to these questions will help you understand what needs to be done and how you are going to be measured and evaluated.
What work has been done so far? What are the roadblocks? What is preventing you from achieving your goals?
If you are brought in to solve a particular problem, it is good to know upfront what has been done and what the challenges are. This will help you assess whether you have the skill set required to overcome those obstacles.
What are the deliverables?
Knowing the deliverables will help you focus your efforts and define the scope of your engagement.
On your first day, set up a meeting with your hiring manager to discuss your understanding of the project: how you plan to accomplish your goals, how often you should report back to the client on your progress and whether you should e-mail or arrange a face-to-face meeting to do so. Also review with the hiring manager what you plan to do on your first few days to ensure that you’re working on exactly what you should be working on. I’ve had problems in the past when I worked in IT management with consultants who didn’t understand the work I needed them to do. On one occasion, I had hired a management consultant to help me assess the structure of my IT organization and recommend alternatives that would improve the business-IT alignment. Unfortunately, the consultant ended up focusing on assessing the skill set of the team and started requesting inappropriate information about staff. He created unnecessary friction within the department. I had to let him go and perform damage control on my own. That’s precisely what I try to avoid as a consultant with these meetings with the hiring manager.
The meeting with the hiring manager is a good time to find out if there are any other stakeholders—other people who are interested in the outcome of the project—whose opinions you should be concerned about. If so, meet with them, too.
If you don’t understand your client’s expectations, you run the risk of spinning your wheels—and theirs—which could result in your termination. You’ll never get repeat business or referrals from a client if they fire you.
4. Don’t take on a project you can’t handle
If you doubt you possess the right skill set to do the job, don’t take the engagement no matter how desperate you may be for work. Tell the client that the project is not right for you. It’s better to be honest with yourself and say no to a client than to take on a project that’s more than you can handle. Biting off more than you can chew will place an enormous amount of stress on you, and the risk of project failure will be high. You don’t want to take on a project that you won’t be able to complete successfully and that won’t result in a good recommendation from the client. If you know somebody who could do the job, recommend that individual. Clients always appreciate honesty and the extra effort you take to help them, and they will keep you in mind for other engagements.
5. Don’t expect a red carpet on your first day
When you become a consultant, you have to say goodbye to executive trappings and hello to humility. You can’t have any expectations as to how you will be treated within the organization: Some companies will give you a private workspace; others will give you a shared workspace. If you have to share an office or get stuck in a cubicle, don’t get hung up on it. Stay focused on what you need to accomplish—not on whether your workspace connotes status.
My first day as a consultant was an eye opener. It was so different from starting a new job as a full-time employee. There was no welcome breakfast with Starbucks coffee and bagels. Nor was I ushered to a new office. Instead, I was brought to a cubicle and left to my own devices. I had to find pens and paper on my own. Fortunately, I did have access to all the systems and applications I needed. If you expect your client to roll out a red carpet, you’re going to be let down.
6. Don’t pull rank
Consultants have to convince others to get work done since they lack the organizational power and authority that full-time, onsite managers can use to effect change and motivate people. Pulling rank or acting like a know-it-all won’t help your cause. I’ve found that the most effective way for me to get employees to follow my lead—whether as a consultant or IT executive—is to involve them in decision making. Early on in the engagement, I typically hold a meeting with an open agenda during which I discuss the reasons why I was brought in and what I’m planning to do. I make it clear that the purpose of the meeting is for me to get their input on the best way for me to complete the project I’ve been hired to work on, and that I’ll make a decision based on their input. I find that when I involve people in the decision making, I get more buy-in, and employees become more willing to own the tasks for which they are responsible. If you’re not good at involving many stakeholders and building consensus, consulting may not be a good fit for you.
The one time I did accidentally pull rank, I immediately realized the error of my ways. I had printed out an analysis I had done in Excel on 11-by-14-inch paper. The individual to whom I was presenting the analysis asked me if I could print it out on legal-sized paper. Since I was used to having an assistant who handled those kinds of mundane tasks for me when I was an executive, I asked the client if her assistant could print out the analysis. She told me that her assistant didn’t have time and that I should do it. I quickly realized in that moment that I was no longer an executive.
7. Avoid practical ideas
As a consultant, your clients consider you a managerial David Copperfield, pulling rabbits out of a hat just when they think they’ve exhausted all their options. They expect nothing less than great magic from you—that is, game-changing recommendations that will allow them to improve customer service, increase revenue or cut costs. Don’t feel you have to come up with realistic suggestions. They’re paying you to think outside the box, so let your creativity run wild. Your role is to suggest the best option, and that’s not always the most realistic one.
One of my clients was planning to implement a web-based solution to improve real-time communication among sales people. The solution required sales people to log on to the Internet to pull information about their accounts, such as the status of customers’ orders, so that they could incorporate that information into their sales calls. The problem was that the sales people resisted using the system. I challenged the client to think about alternative delivery mechanisms that would make it easier for sales people to access information about customer order status, customer complaints and new products. The client’s initial reaction to my suggestion was negative. They didn’t want to consider other delivery mechanisms because they had made a significant investment in this web-based solution. Ultimately, they decided to use different technology to push information to sales people in real time because it was a better communications mechanism for the sales force.
8. Brand yourself
Talk is cheap in the consulting world. You have to start building a brand. You are the knowledge worker who has to sell your services and demonstrate how you can add value. You have to be perceived as an expert with a specific skill set that is not available in your client’s organization. Branding will help you create a unique identity that distinguishes you from the legions of other independent consultants.
You can build your brand by:
- Writing articles in your area of expertise
- Taking up speaking engagements, which will help you build your network and exposure
- Writing a book to give you instant credibility
- Creating and regularly maintaining a blog
- Developing professional networks on the topics in which you specialize
- Doing the best at every engagement (reputation is very important)
Don’t focus these efforts too much on making money. The purpose of these activities is to get you exposure. The money will then follow.
While I’ve enjoyed the consulting engagements I’ve taken on thus far, I’m not sure it’s the best thing for me. I do miss the feeling of belonging that comes with being a full-time employee. You don’t get that as a consultant because everyone knows your work is short-lived. Believe me, they will forget you once you leave. In the meantime, I’ve learned a lot about marketing myself, influencing people and exploring different industries that will be invaluable in all my future endeavors.
Kamala Puram is the president of Chrysalis International, a management consulting company. She has over 25 years of IT management experience in various industries. Her company specializes in creating technology vision and strategy, IT organizational alignment, large global ERP system implementations and IT integration (mergers and acquisitions). Puram can be reached at email@example.com.