Shaking IT Up: Consultant or Employee? That Is the Question

by Kevin Vandever

Life is full of choices. Stop for a moment and think about how many decisions you've made since you woke up this morning. First, you probably pondered whether you should even get out of bed. After that tough decision was made, you might have anguished over what to wear, what to eat. Your morning commute stress-tests your brain and glands: Should you stop or speed up at the yellow light? Which radio station should you listen to? Should you pull that son-of-a-gun over in front of you who just cut you off, making you spill your café mocha, and teach him a lesson in driving etiquette?

(Don't worry; no motor-vehicle operators were hurt during the writing of this column.)

The point is that our lives are filled with making lots of decisions every day. Corporate America is not immune from decision-making, either. One of the forks in the corporate IT road that I have been particularly close to in the past is the decision to outsource IT projects or to complete them in-house. Having been a consultant myself, I have seen this decision made many times with little or no forethought, afterthought, or any thought at all.

While I can't help with your decision about whether to get out of bed, I can provide some information to help you decide when to hire a consultant and when not to. As painful as it may seem to the consultants out there (and I feel your pain), there are times when using a consultant is not the thing to do. However, there may be times--especially in this struggling economy--when hiring a consultant or contract programmer is exactly what you need to do. In fact, one of the common misconceptions today is that during these trying economic times, one should not even consider hiring a consultant because of the cost, but if you think about it a little further, and use some of the guidelines that follow, you will find that the factors that help to define the decision to hire, or not hire, a consultant or contractor remain unchanged.

There are three primary reasons to hire a consultant or contractor.

1. When you have a problem or a project that is beyond the knowledge and experience of your staff, this is a great time to bring in a consultant. A good example is when a company decides to go to the Web. This is the time to bring in an expert in the new technology to get you started while your staff gets up to speed. The consultant also may be able to help train your staff.
2. If you are faced with a critical project that exceeds your in-house resources, you should solicit extra help, especially if getting the project done on time is of the utmost importance. Isn't it always? I have seen this happen a lot. Maybe you have a huge RPG project, and although you have plenty of RPG programmers on staff, it is imperative to the business that the project is completed on time. Why not bring in some temporary RPG help, especially if after the project is done the workload will go back to normal?
3. When you have one-time projects and require minimal ongoing support, this is the perfect time to bring in a consultant or contractor. Maybe you have a conversion project that will take a couple of months to complete and will require little support. You could hire someone to come in, knock out the conversion project, and go away, without disrupting your current projects or irritating your staff by giving them undesirable work. There is no undesirable work for a consultant or contractor, only paid work.

There are also times when you probably don't want to hire a consultant or contractor, two of which come to mind.

1. Don't hire a consultant to perform work that can be reasonably done by internal staff. This seems obvious enough, but many times the ability of internal staff is not always understood (more on that in my next column). Management may believe that something is beyond the ability of their internal staff or that the internal staff is too busy to accomplish the project. By understanding your staff and workload better, you might not need to bring in a consultant or a contractor to bring your business to the Web, because the very quiet Suzy and Johnny, way back in the far cubicles, have been taking classes and studying on the side and are ready, willing, and able to do this Web work for you. But first you have to ask and really listen (which is another segue into my next column).
2. Don't hire a consultant to work on an isolated project that will require extensive, ongoing support. I worked on an electronic-data-interchange (EDI) implementation project as a consultant, and for years after it went into production I was the only one who understood the details. As far as I was concerned, that was awesome, because the company never wanted to let me go, but looking at things from the company's point of view, it probably would have been best served if it used internal staff to handle such projects.

I mention consultant and contractor as seemingly interchangeable terms, but they're not. Besides the fact that saying you're a consultant usually enables you to charge more for your services, a consultant is someone who should demonstrate knowledge and expertise that is unknown to the internal staff. For example, you might bring in a consultant to help design an EDI system, or help your Web developers communicate with the legacy systems and DB2 databases on the AS/400 or iSeries, because that knowledge may be beyond the scope of your RPG programmers. A contractor is usually someone whose skills are available within the internal staff and in the job market. You might contract an RPG programmer to help your internal RPG programmers finish a critical project by a specific deadline.

Cost is also an important factor when deciding to outsource. You must determine if hiring a consultant is going to cost more than doing the project in-house. However, when measuring the cost, you must make sure you do it correctly. You cannot simply compare an employee's salary against a consultant's rate. You must take into consideration other tangible costs, like employee benefit costs, training, and how much time employees spend in meetings when they could be working on...sorry, where was I? Oh yeah, there are also intangible costs to measure, like experience and expertise, which affect quality and timeliness, which, in turn, will affect support costs after the project has been implemented. So even though it may look at first glance like a consultant or contractor will be much more expensive, after further analysis you might see that the cost will be comparable to that of an employee. In some cases, it will be much more cost effective to hire the consultant or contractor.

Decisions, decisions. They're everywhere. Hopefully, I've made some of them easier by providing some useful guidelines to determine when to hire a consultant or contractor. If only I had some guidelines like this to help me decide if I should get out of bed in the morning, I'd be all set.

I would like to thank Jim Coker, IS director at Behr Process, in Santa Ana, California, who helped me gather the information used in this article for a presentation we used to deliver at COMMON, and for never, to my knowledge, cutting me off on the freeway.

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