Consultants provide an essential service to companies faced with IT decisions. But IT is now a huge industry, with an abundance of companies and a range of complex products. Under these circumstances, it is natural for consultants to focus on the big players, but does this sometimes force them into overlooking the precise needs of every client? The Big Five management consultants in particular, have developed such strong alliances with the major software developers, that a form of “partnership” through common interest has flourished between the giants of each sector.
Of course, a company does not become a market-leader without good cause.
Major players such as SAP and PeopleSoft have sophisticated, built-in features that make them highly desirable to large organisations. One example is Enterprise Resource Planning (ERP) – currently a hot topic in IT, whereby the accounts, personnel, marketing and all other relevant departments function on the same unified IT infrastructure. While this is a very useful facility, many firms, large and small alike, may not necessarily find it worth the extra expense – indeed they may be better off buying a product that is compatible with existing systems rather than replacing the entire IT network. This thinking is in line with the whole thrust of modern IT – connectivity between applications. This can apply across departments, operating platforms and companies, so often treated as isolated entities.
Smaller package vendors are often more flexible in their approach, allowing the customer the choice of buying, for example, accounting software from one vendor, and marketing software from another.
Another difference between large and small packages is the time factor.
Large packages are known not only for their highly sophisticated solutions for accounting software, but also for the length of time they take to implement. As the level of complexity rises, so does the amount of time for installation, and so too does the scope for error. In addition to installation time, staff may have to be trained for months before they are able to operate the system, and, invariably, a hidden cost manifests itself in the continual maintenance bills from real or imagined system complications.
Aside from technological complexity, smaller and larger players take a different approach to contractual issues. Concern has been expressed by customers that a contract with a major player binds them completely and that the vendor might be less helpful, in the eventuality that a client is not satisfied with the product and the advice of the consultant. Smaller vendors are often more exposed to criticism and, by definition, have a greater dependence on each client.
While client issues are, of course, the most important consideration for consultants, they also have an obligation to their customers to provide as unbiased and objective a judgement on the industry as possible. Indeed, consultants are partly responsible for the development of the industry.
If a select group of expensive packages remain the market leaders simply because no other is ever recommended, crushing all possible competition, there is a real danger that the market could become stagnant. Every market needs to remain fluid and forward thinking, allowing new products and innovative designers to enter the stage. Financial directors and IT directors are extremely vulnerable to criticism if they make the wrong decision – they need help and advice. Consultants are not only the best, but often the only, adviser able to provide directors with an objective opinion. While strong alliances can be highly beneficial to consultants, vendors and clients, consultants should bear in mind that the client relies on them to give a balanced view of the whole industry.
However, while consultants have a great influence on IT decisions, it is also the responsibility of the smaller vendor to achieve recognition in the industry. To overcome the lack of representation, such firms could consider appointing a single point of contact, usually the marketing manager, with the responsibility for maintaining relationships with consultancies and clients, since a proactive approach to the problem could help raise profiles. In short, both parties would benefit from a more open marketplace and, with this in mind, consultants should ensure they take an overview of the whole sector, perhaps by appointing a special team of consultants.
This team would, of course, run alongside specialists in the various market leading packages. Such an approach would ensure the customer was exposed to a wider pool of options – and reduce the likelihood of consultants missing the next SAP!
Richard Pierce is the marketing director of software company SquareSum.
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