In many ways it is much more difficult to evaluate a consulting partner for implementation than it is to choose the software which you will be implementing. In my career, I have worked in all capacities: as a customer, as a software vendor and as an implementation partner. With this perspective I found the implementation to be the biggest wildcard as it holds the largest number of unknowns.
It is always amazing to me to see how easily very smart people can be swayed to focus on the wrong things like price.
My wife works in sales too, as a successful real estate agent. It has been very interesting to see the parallels between the work that each of us do, the way in which we interact with our customers during the engagement process and how things shake up competitively. In her world there is a tactic used by some agents known as “selling the listing”. In the process of evaluating agents to represent a listing, the agent will ask the obvious question of what the customer believes the value of the property to be. As you may expect, it is rare that a customer come back with a list price that falls in line with market values. More commonly, the price they believe it is worth is significantly higher and based on comparable properties that are, in reality, not comparable.
Most honest agents will propose a more realistic price with which the property will sell in a reasonable timeframe. They will usually go so far as to perform a current market analysis for a more analytically focused view of the property’s value. The unscrupulous agent (or savvy, depending on your perspective), knowing there is competition for the listing will then agree with the higher price, tell the owner how brilliant they are for choosing it and proceed to sign a listing agreement and put the house on the market. Inevitably, the house will languish on the market for months with little action. All the while, the agent keeps coming back to the seller with price reduction after price reduction. After enough reductions, the property will eventually sell at something close to the market value originally cited by the other agents. Knowing that most sellers have a specific price at which they need to sell the property, an agent can easily take advantage and lock the seller into a multi-month agreement.
A similar disingenuous tactic is used in the management consulting business. Despite what a perspective customer may admit, budget is always at the forefront of decision makers’ minds when evaluating a consulting partner. Sensing tough competition, a consulting partner may choose to undercut their bid to appear less expensive. Once they have secured the deal, have their people hard at work on the project they can safely come back to the customer with change-order after change-order. When all is said and done, the total investment is likely to be similar to the other vendors.
In both cases, the price was used to win the competition sometimes to the exclusion of more important factors such as project scope, talent and experience. Specifically, consulting is so subjective that it isn’t possible to commoditize the functions enough to make an apples to apples comparison on price alone.
When in doubt, keep it small. Keep it simple and live to fight another day. A smaller project that delivers on its promises is certain to help get the next project approved.
