IT Departments use external people regularly. While definitions can vary, here is what I use:
We use contractors for staff augmentation. This can be situations where we need more developers or where we need a skill part time, like a DBA.
We use consultants for deep technical expertise. Examples include a major new software product or the learning to use a new ERP module.
Let’s look at how we can be smart about using these types of resources.
Portions of this article are excerpts from my book, The I.T. Leaders’ Handbook, available in paperback and ebook from fine bookstores everywhere.
Treat Vendors with Respect
I have been on both the vendor and customer side of these relationships. Approach the relationship with a win/win attitude, and good vendors will reciprocate. If you treat a vendor as disposable, or always argue, the vendor will protect themselves. When they are providing you good people at a fair price, it is in your best interest to have them be successful. Act accordingly.
There is usually a top level Services Agreement that sets out the rules for how your two companies will work together. A Statement of Work (SOW) or Work Order (WO) covers the individual work tasks. I have found it useful to create an ongoing support SOW to cover questions, small tasks, or research that comes up. This is especially helpful for consultants as it allows your team to tap into their expertise without creating a new SOW each time.
Small Vendor List
Stick with a small number of companies that can reliably provide good people when you need them. Depending on your needs, this may include a large company with a large variety of skills and small companies that focus on one area.
Time & Materials (T&M) vs. Fixed Bid
While there are Pros and Cons of each, I prefer T&M contracts for most contracting and consulting situations. I feel it gives you better control over the spending and keeps the motivations aligned. If the vendor’s estimate is significantly off either high or low, the vendor will act in their best interest, which is not the same as yours.
The careful use of consultants and contractors can boost your IT department’s capabilities and performance. Be thoughtful and strategic about how you use them and they will make your own department and organization more successful.
Photo by John Bredesen