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Business.com Guide to IT Consulting

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Contents

What Is IT Consulting? 4

Trends in IT Consulting 6

Benefits and Drawbacks of Offshoring IT 10

Business.com Checklist for IT Consulting 12

Three Steps to Choosing an IT Consultant 14

Writing an RFP for an IT Consultant 16

RFP Checklist for IT Consulting Bids 18

Glossary of IT Consulting Terms 19

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What Is IT Consulting?

IT is Information Technology, and IT consulting is an umbrella term for a variety of interrelated activities, including:

¾ Providing advice and expertise on the use of computers, telecommunications equipment, and distribution networks that store, retrieve, transmit, and manipulate data to effectively achieve business objectives, and assessing operational efficiency and capacity of your IT environment

¾ Planning, designing, testing, implementing, and managing IT technologies on behalf of a business

¾ Developing and supporting change management activities to transition users to new technologies and procedures

¾ Writing technical and user documentation

¾ Purchasing hardware and software systems on behalf of a business

¾ Providing and monitoring network security

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¾ Training and supporting employees and customers in the use of IT technologies

¾ Staffing technical job functions on a temporary contract basis

An IT consultant can be an individual (either a self-employed independent contractor or a professional employed through a staffing firm), a small, specialized firm, or a large national or multinational company. Generally, smaller companies offer specific competencies and/or serve smaller enterprises; they could also subcontract their unique skill sets to other IT consultancies that serve larger corporate clients.

Your IT consultant helps your business implement new technology and support the technology you have. The role of the IT consultant is to help you make informed decisions about how technology can better help you achieve your business objectives.

The role of the IT consultant is to help you make informed decisions about how technology can better help you achieve your business objectives.

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Trends in IT Consulting

Cloud Computing. The big attraction of cloud computing -- where your software and data are housed off-premises and accessed via a Web portal -- is that it’s generally less expensive.

Moreover, software updates are usually relatively painless, eliminating costly and time-consuming installations, reducing the need for IT consultants. But, as more companies move their data to the cloud, more IT consultants are needed to get them there. It’s not just the need to migrate to new technology in the cloud, it’s also the need to ensure legacy systems work in the cloud.

The big attraction of cloud computing -- where your software and data are housed off-premises and accessed via a Web portal -- is that it’s generally less expensive.

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Thoran Rodrigues, writing in Tech Republic about the new role of IT in a cloud-based world, says:

In our new world, IT must shift its perspective from owner to custodian. While it is still very important for IT departments to take a proactive approach in learning about and presenting new technologies and solutions to users, the most important side of the updated IT department will be its ability to act as a custodian of multiple technologies and systems. Instead of worrying about purchasing the technology and building out the infrastructure where it will run, it will have to work to ensure that all contracted SLAs are being respected, that the systems are interoperable and can work together, and that the service providers have long-term visions that are compatible with the direction that the company is heading.”

Big Data. Organizations have increased the amount of data they gather by orders of magnitude in recent years. To make use of all this data, companies needs to sift it. IT consultants can help parse this data into useful and manageable reports.

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In a story on big data in InformationWeek, writer Jeff Bertolucci quotes David McJannet, vice president of marketing for Hortonworks. “Big data isn’t this nebulous thing,” he said “Very pragmatically, it’s about building net-new analytic applications based on new types of data that (an organization) wasn’t previously tracking.”

It could make sense for your business to hire outside consultants for this specialized IT task.

Outsourcing. It is generally easier and less expensive to to have your IT needs handled by outside consultants, rather than developing the expertise in-house, particularly given the ever-changing dynamic of IT technologies and requisite competencies to manage them.

One of the advantages of outsourcing IT, according to an article by Colette L. Meehan in the Houston Chronicle online, is that “outsourcing allows management to defer the details to a specialized company. Removing the details permits management to focus on the larger issues within the organization.”

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Whether you outsource or not, the key to any successful relationship with an IT consultant is always the same: effective communication. You have to ensure that you and the consultant are always on the same page.

And that job belongs to you. The one thing you can’t outsource is leadership. You need to stay close to the consultant at the beginning to build a working relationship and ensure that objectives are clear and measurement of progress is well understood. Then you need to see how the new system is being received and provide feedback to the consultant that others may not feel free to convey.

You need to stay close to the consultant at the beginning to build a working relationship and ensure that objectives are clear and measurement of progress is well understood.

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Benefits and Drawbacks of Offshoring IT

A good deal of IT consulting is conducted offshore simply because labor is cheaper. That might help your budget, but there are disadvantages to working with offshore talent. It’s common, for

example, to outsource tech support, but accents and other language differences can make this tricky. Some offshore companies deal with this through better training of their consultants and screening for improved language fluency.

Another issue is security. With offshoring comes the risk of political instability in countries where the work is performed. For mission-critical IT projects, one has to consider the risk of war, strikes, asset nationalization, and even terrorism. When offshoring you IT functions, be sure to ask the consultant about disaster recovery plans.

For mission-critical IT projects, one has to consider the risk of war, strikes, asset nationalization, and even terrorism.

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Keep in mind that even when you’re dealing with a domestic IT consultancy, it may very well be outsourcing certain staffing and data warehouse functions to offshore operations. There’s nothing necessarily wrong with that, but you need to ask whether any of their services are outsourced offshore and, if so, how they manage it, how they ensure security, and how cultural and language differences among workers are minimized.

Keep in mind that even when you’re dealing with a domestic IT consultancy, it may very well be outsourcing certain staffing and data warehouse functions to offshore operations.

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My Needs

Vendor 1

Vendor 2

Areas Needing IT Upgrade:

• Sales/Marketing• Customer Service• HR/Payroll• Data Warehousing• Other• Enterprise-Wide

Systems Needed to Support IT:

• Hardware• Software• Integrated Systems• Computers• Tablets• Smartphones

System Security Considerations

User Documentation

My Needs

Vendor 1

Vendor 2

Training and Support:• Employees• Customers• Online Service• Phone Service• On-Site Service• Video Tutorials• Remote Training

Available

Temporary IT Staffing

Offshore Sourcing

Selection Criteria:• Credentials• Qualifications• Certifications• Experience• References • Hourly rate• Flat Fee

Business.com Checklist for IT Consulting

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Three Steps to Choosing an IT Consultant

How can you be sure your IT expert has the expertise you need? No matter the scale of the project, success depends upon having a clear idea of what you want to accomplish, and then setting milestones on

how you expect to achieve it.

1. Write an RFPWrite a Request for Proposal (RFP) that defines the project scope and consultant selection criteria. An effective RFP not only maps a plan of action but also serves as a compass to select a consultant that can best follow the map. It’s important that the people most likely to be the primary users, or who are most likely to be affected by the implementation of the technology be involved in writing the RFP.

2. Conduct a Personal Interview Getting a response to the RFP is only the start of a conversation. Personal interviews are critical to consultant selection. Just as if you were hiring an employee, interviews are where you first gain a sense of whether you feel comfortable with the candidate and that you have a mutual basis for a good working relationship.

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3. Negotiate and Set Firm Pricing In most situations, costs are negotiable. You should be aggressive in stating exactly what you are willing to pay for, and what your budget allows. Most consultants will want to work with a reasonable budget, but your budget must be tied to specific deliverables and actions.

The only way to ensure you are getting exactly what you are paying for is to specify upfront exactly what you are going to pay for. Don’t leave anything open-ended, because anything you leave open is likely to be something you’ll eventually pay for (especially if the consultant feels they’ve come down considerably in price to fit your budget). It’s also a good idea to put a cap on all expenses -- the phrase “shall not exceed without written authorization” should be in all of your contractual pricing.

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Writing an RFP for an IT Consultant

Your RFP should:

¾ Define project objectives, key milestones, deliverables, timeline, and (perhaps most importantly) budget

¾ Describe what your current system does and how people use it

¾ Describe what your current system does not do, and what you would like it to do

¾ Specify the type of reports you want from the consultant and in what formats you want them

¾ Specify the intervals at which you expect to receive reports

¾ Rank by the importance your schedule, cost, performance, ease of implementation, lack of disruption, data integrity, and any other major factors

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¾ List consultant selection criteria, e.g., credentials, qualifications, certifications, experience, references, and fees

¾ Provide a sample contract, which essentially specifies or requests details on:

� scope of work � standard of conduct � deliverables � implementation schedule/action plan � list of project manager(s) and people consultant will work with � reporting requirements/milestones � compensation arrangement/payment schedule � ownership of final product (usually you) � provisions for non-performance/right to terminate � liability for inaccurate information or misrepresentation

of capabilities that results in impaired functionality � status as independent contractor (both the

consultancy as a firm and all of its employees/subcontractors provided to work on the project)

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RFP Checklist for IT Consulting Bids

Criteria Description

Project objectives

Needs prioritization

Scope of work

Implementation schedule

Key milestones

Deliverables

Budget

New features, functionalities, capabilities desired

Reporting requirements

Additional contract terms:

• Product ownership

• Non-performance provisions

• Legal relationship

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Glossary of IT Consulting Terms:

Access: Where entry is gained into a circuit or network.

Application Infrastructure: Software program(s) that deliver business applications.

B2B Web Services: A combination of IT services deployed in some combination of cloud and enterprise intranet platforms that appears to users as a single integrated package.

Best Practices: Methods and means most likely to achieve a desired goal with the most benefit.

Beta Testing: Trial run of a new system or application under actual usage conditions; the assumption is this is not the final version, but close enough to put to work. Usually a group of “beta testers” put the system through its paces to detect and correct any problems or issues before releasing for general use.

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Big Data: High-volume, high-capacity, and high-variety data assemblage that requires sorting and processing to yield meaningful information pertinent to specific user questions and needs.

Content Management Systems: Provides for collaborative workflows throughout an IT network.

Change Management: Activities that help transition individuals, teams and organizations to follow new procedures and implement new technologies.

Data Warehouse: Collection of data or the location where data reside.

IT Service Management: Used by consultants as a catchword to mean they manage networks from the customer’s perspective.

Key Performance Indicator (KPI): Quantifiable and measureable goals and objectives agreed upon between the client and the IT consultant subsequently used to assess both the success of the project and the performance of the consultant.

Letter of Understanding (LOU): A formal, written document provided by the IT consultant presenting its view of the scope of the project, key milestones,

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and what services will be provided and at what cost. This serves as a kind of checkpoint to ensure there is a complete understanding on the part of both the client and the consultant before signing a binding contract.

Platform: A system’s underlying hardware and/or; the platform defines a standard around which software can be developed and hardware added. For example, a Windows 7 Professional platform would require software and devices capable of working with that operating system.

Scope Creep: Signing up for more than you thought. The client thinks the IT consultant should write the documentation that goes with a new system implementation, but the consultant hadn’t considered this part of the project. Scope creep is often the result of an unclear RFP or an emphasis on the low-cost bidder without understanding what is missing from the bid. Scope creep is easily avoidable with an RFP that details exactly what is expected of the IT consultant on a given project.

Storage Area Network: Employs multiple, networked servers to increase data storage capacity.