People hire consultants for all sorts of tasks, from refitting a new building to installing a new intranet system. No matter what sort of business you run, there are consultants out there who will come in and help you out. The trouble is that consultants are out to make a lot of money, so it is in their interest to rinse you of as much cash as they can. Here are a few tricks that consultants use to make more money out of you.
Building New Programs To Extend Their Stay
In the 90s, the programs were things like staff health programs, or personal enlightenment, personal growth programs and p-driven leadership. They were things like “building awareness” seminars that extended into fortnightly sessions that came with their own journal.
Nowadays, consultants set up collaborative online software as a way of extending their stay. No matter what reason the consultant was first brought in, the consultant tries to “improve” your business in very generic ways. For example, if your business is mostly an in-office business, then a push is made for remote working and outsourcing. If your company has lots of in-house servers, then a push for Cloud computing is made. The goal is to create programs that appear to modernize a company, where their actual purpose is to extend the stay of the consultant so that you have to keep paying them.
Setting Up Systems That Only They Can Monitor
This is a very common trick whereby consultants are able to set up business systems, and they are so complex and sophisticated that only they have the skills to maintain them. For example, we are seeing a lot of new financial technology that most accountancy and bookkeeping staff are simply not trained on. The consultants come in, they install the new technology, and they are the only ones who can operate it. You need to keep paying them in the short term, and in the long term while your staff slowly become masters in financial technology.
Digging In With Ongoing Processes
Like a virus, a consultant will come up to complete a task. While there, the consultant pitches and starts up other tasks. Before you know it, the consultancy firm has its fingers in so many of your pies that your company would be crippled if they were to walk away.
You are forced to extend contracts and keep paying them to complete the jobs and projects that they themselves suggested. It is like a car mechanic when you take your tires in to be fixed, but the mechanic notices your leaky exhaust, your rusty springs, your odd sounding engine, and before you know it you are paying for a service and complete overhaul.
Stating a Price For Services But Not For Completion
This is a very simple sleight of hand trick. You are given a price for the services, and not for the completion of the project. It appears like you are getting a price for everything required to complete the project, but that is not the case. Your contract states that a certain number of people will be doing certain things and will be doing them within a certain timeline. These factors should come together to complete your project (in theory). But, in reality, the actions are undertaken, but the job is not complete, so contracts need to be extended. Many consultants will only contract for time and resources and not for results because they know they can’t always achieve the results, and they do not want to risk not getting paid.
Misrepresenting The Time Required For Projects
How is something as simple as misrepresenting the time or staff needed for a project supposed to help consultants make more money from you? It is simple. They come up with a timeline and a plan that seems perfect. In fact, it seems like there is ample time to get the project completed. However, along the way, there are unexpected problems and delays that drag on for so long that the project is nearing the due date and is woefully behind.
The consultants then offer to put more people on the project, but of course, this emergency action is going to cost significantly more than expected. The project is then done on time but is massively over budget. In truth, the consultants have played the game long enough to expect the delays that occurred, but the customers didn’t know to account for the delays, so the due date/deadline seemed reasonable, and it seemed like enough time was allotted when in fact there wasn’t.
The skill in employing a consultancy successfully is to pay attention to the contract. Make it as tight and buttoned down as possible, ideally without any loopholes.