It started with the ERP boom after Y2K. Massive software projects, such as SAP implementations, were led by consultants and typically came in over budget and behind schedule. While consultants can and should be a vital part of any project that involves new technology or unfamiliar areas, it's important for organizations to retain ownership of the overall project and not leave everything at the mercy of the consulting company.
Part of that is insuring that contracts are creatively designed with a combination of time and materials plus incentives (and/or penalties for not delivering on certain tangible objectives). Fixed-fee contracts only tend to work when the scope can be defined precisely and agreed upon. Otherwise, the consulting company may make unwanted sacrifices to stay within budget. Time and materials without any incentives or penalties (or at least a "not to exceed" limit) puts all the risk on your organization. Incentives work better than penalties as it facilitates more positive collaboration. Vendors will be reluctant to accept penalties unless scope and the means to achieve it is crystal clear.
This doesn't mean that pride should get in the way of benefiting from a consulting company's tried and true methodology, merely that the leadership, ownership, and accountability of the efforts should remain in-house. Part of this accountability is insuring the right contracts are negotiated.
This oldie-but-goodie below from CIO Magazine is from 2002, but is still relevant today. It explores further the pitfalls of consultant-led projects and offers some sage advise. Some things have changed since 2002, but one thing hasn't. Suffering from the residue, organizations are still struggling to get value out of their expensive ERP products. Don't make the same mistakes they did back at the beginning of the millenium. Take control of your projects.Take Control Consultants-can't live with 'em, can't live without 'em - ENTERPRISE PROJECTS - CIO Magazine Jul 15,2002
Labels: accountability, cio-perspective, collaboration, erp-project, methodology, sap-project, value, value-management