Building an IS Consulting Business

Anita B. Leto and Daniel D. Roberts
(From "Information Systems Management" Magazine - Summer 1998)

Today's leading CIOs and IS executives are changing how their organizations conduct business. To compete with external consultants and myriad service providers, they are transforming their IS culture and workforce in building an IS consulting business. This article will explain step-by-step how to build such a business, provide examples of what has and has not worked, and highlight what makes change initiatives such as these succeed or fail. Taking IS from an internally focused, technology-driven organization to one that competes with external consultants for the privilege of being the provider of choice is a major cultural initiative. Such an initiative is not for the timid and should not be contemplated unless a company is absolutely, 100% committed to seeing it through to the finish.

IS organizations have been subject to many cultural initiatives over the past five to ten years; reengineering, TQM, cultural diversity, CASE tools. Many of these efforts have failed to bring long-term change to organizations and have left behind a wake of cynicism, people who are suspicious of any initiative even before it starts. In some cases the cynicism is well-deserved — IS management did not finish what was started. In other cases the cynicism is greater than it needs to be because IS management has done a poor job managing the process and explaining how all of these initiatives are linked. Building an IS consulting business is a major culture change initiative and a priority for many CIOs and senior IS leadership teams today. From the authors' work with more than 1,000 IS organizations from all industries since 1984, they have observed and documented the following steps or key learning points that separate the successful change agents and leaders from those who are not successful.

Provide a Clear, Simple Transformation Game Plan
Most plans of this nature are written at the 50,000-foot level. This is effective when the plan is being sold to senior management or the Board of Directors. It is not effective for providing a roadmap to IS staff members who need to understand how to conduct business differently in the trenches, day-in and day-out.

A plan should first and foremost identify what consulting means. Consulting is defined as influencing without direct power, which by definition includes everyone in IS from entry-level programmer to CIO. This helps to get beyond the negative stereotype of a consultant and avoid the incorrect assumptions around, "It is not my job, it is those folks called IS account managers, business consultants, liaisons, project managers, and leaders." With this definition, IS needs to know that influencing without direct power means letting go of coercive power, which is often stated to the client as, "If one does (or does not do), then IS will not support he or she or be held accountable."

Establishing trust with clients is another key element of the consulting definition. Trust is very complex and can be simplified by examining the day-to-day behaviors that build it: returning calls quickly, following through on promises, looking at the pros and cons of a client's idea or change rather than just painting a one-sided picture, seeking input from the client rather than telling the answer, and being willing to take ownership of tasks or problems. IS erodes client trust by being vague, arrogant (real or perceived), promising everything, and delivering inconsistent or mixed messages both individually and as an organization.

Looking at these trust eroders and builders, a challenge for the entire IS organization is to learn how to point out problems (or cons) without sounding like a wet blanket. Internal IS consultants often are so overcommitted and consumed that when a new idea is presented it is very difficult to look at the pros and praise the client before starting in on all the reasons the request/idea will not work.

Successfully competing with external consulting firms means having a policy for all IS members — a no response is not acceptable when a client is putting a new idea on the table. This simple technique alone builds rapport and trust. However, trust will be eroded by never saying no, so the following policy of "no" is recommended: Do not say "no" during the first presentation of an idea and be able to say "no" during the second discussion about the idea. This of course needs to be backed by a solid business case and with other options presented. No doubt, this will take more time. External consultants are very good at building trust with business clients whereas internal IS consultants often say they are too busy.

Communicate, Communicate, Communicate the Game Plan
And then communicate some more. Having a great transition plan alone is not going to deliver the results being sought. Successful CIOs take advantage of all opportunities (including several they create on their own) to get the message across and to help people internalize it. Through quarterly state of the union addresses, voice mail/E-mail briefings, and each senior leader making running IS as a consulting business an agenda item at staff meetings, CIOs constantly address the following:

• How becoming a consulting organization ties in with other strategic initiatives,
• Why it is critical to the success and survival of IS,
• What is expected from all members of the organization,
• What is being done to help members be successful in this new environment, and
• What happens to those who are not able or interested in making the transition.

An aggressive communication strategy will help to manage people's natural tendency to resist change.

An aggressive communication strategy also will help to manage people's natural tendency to resist change. It was discussed earlier how cynicism is natural and needs to be overcome. Based on IS' poor track record with change initiatives, the whole organization needs to be convinced that moving to a consulting business is not just another program of the month.

Through constant communication, this resistance to change can be managed along with other initiative killers:

• Denial — "This too will pass."
• Confusion — "What role to play? What can be done now?"
• Lack of focus — IS has so many major projects and initiatives going on right now — what is the most important?
• Lack of motivation — One-third to two-thirds of the organization will not understand the need or value of building a consulting organization.
• Sense of doom — Several people are so pessimistic about the future of IS they do not feel IS will survive.

The key lesson here: Deal with these head on, even if they are not seen. As a senior leadership team, address these initiative killers because they will sink change initiative efforts every time.

Communication goes well beyond what is said or written. In fact, actions and behaviors will have the greatest communication impact and will be watched closely by staff as they gauge the true commitment to the change initiative.

Actively Participate In The Process
Building an IS consulting business is not a spectator sport. CIOs and senior IS leaders cannot sit on the sidelines and watch their lieutenants make it happen. Successful IS leaders balance the roles of players, coaches, cheerleaders, and referees.

As players, lead by example. Consult (influence and build trust) with peers and build partnerships with senior management. As coaches, develop and lead the IS team to ensure the ongoing use of the consultative approach. Specific coaching opportunities are as follows:

• Use the consulting methodology described later.
• Help IS drop the efficient yet deadly coercive power.
• Develop a forum, i.e., an IS consulting support system, where IS can discuss the difficulties in consulting and think through alternatives.
• Celebrate victories by recognizing people for their consulting successes at staff meetings and quarterly briefings.

Without coaching, most IS staff quickly return to what they are most familiar and comfortable with — the technical role.

As cheerleaders, IS leaders show their vocal and active support for this new way of conducting business and give the team a lift or a jolt to keep them marching down the field. This is critical throughout the process because change is hard work. The cheerleader role is not a one-time (or two-, three- or four-time) only role. This is an ongoing role.

Last, IS leaders need to play the role of referee. As the consulting initiative gets into advanced stages, throw a flag when players go offside. There have been cases where IS consultants have gone native, actually going too far as a client advocate. In these cases they have lost objectivity and actually stop doing what is in the client's, the corporation's and IS' best interest. Helping IS maintain objectivity and understand the playing field is the IS leader's role as referee.

Define the Characteristics of an Effective IS Consultant
The next step that is critical to transforming IS into a consulting business is to look at the characteristics required to be successful in this new role. In the authors' research they have identified three categories of characteristics necessary to be an effective, internal IS consultant: most important, important, and nice to have. Most important characteristics include enthusiasm, empathy, flexibility, and the ability to communicate. Business knowledge, political savvy, and analytical ability are listed under the important category, and things such as in-depth technical and product knowledge under nice to have.

Working with IS senior leadership teams, the authors have verified that the characteristics are right on target, for a couple of reasons. First, IS senior management painfully remembers an IT project that IS was not awarded, not because of technical skill, but because of an inability to communicate well and show enthusiasm and flexibility. In other words, IS organizations are losing market share because of the most important characteristics, not because of the nice-to-have characteristics.

One IS organization was called in to work with a new business unit. The head of this new unit explained their business goals, philosophy of doing business, and where they thought IS could help them. At the end of the presentation, the business unit head turned to IS. IS members were silent. Finally the business unit head said, "This would be a great time for you to at least smile." This is an example of an IS group with great technical knowledge, but little empathy and enthusiasm. Secondly, the most important characteristics are very difficult to develop unless an individual is highly motivated. Take patience or flexibility. These are challenging characteristics to teach someone.

Identifying this list will help:

1. IS staff know what is expected so they can focus on developing and refining these characteristics through training, mentoring, and coaching;
2. IS management performs hiring, development opportunities, and promotions; and
3. IS receives client verification on what characteristics they feel are most important, important, and nice to have.

Define Consultant Roles
A fifth key learning point to becoming a true IS consulting organization is to define the consulting roles that IS can use, see which roles are being used most, and determine which roles are best for the changing IS and business environment. The authors have defined (and taught thousands of IS professionals how/when to use them) four IS consulting roles: the technical wizard, technical assistant, silent influencer, and problem-solving partner.

The Technical Wizard
The Technical Wizard role is the one most IS professionals are most familiar and comfortable with. In this role IS decides what is necessary for the client and does it with very little input from the client. The answer to every problem is technology. This role is very ego satisfying for IS and requires little work from the client. On the negative side, the technical wizard knows little about the business and the client ownership is low. If clients make comments like, "This system doesn't work," it is a sign of the ramification of this role.

Technical Assistant
In this role, IS responds to a client's request and does exactly what the client asks. This role allows IS to establish a relationship with a client, and the client takes more responsibility for the solution. With the technically savvy client, the technical assistant role is an excellent opportunity for IS to learn about the business. On the negative side, IS takes a lot of risk by giving the client exactly what was asked for, especially when it does not meet the need. This role prevents the client from seeing other options and alternatives to the problem. IS organizations often are puzzled when they are working very hard to meet deadlines and budgets, but their clients award external consultants the opportunity to work on strategic business initiatives. This occurs because clients have pigeonholed IS into the technical assistant role, not seeing them as a resource for strategic issues or opportunities.

The Silent Influencer
In this role, IS provides input to a project without being directly involved — silent means indirect involvement, not without speaking. This role can be initiated by either the client or IS. As a silent influencer, IS provides objective feedback and helps shape events. The client listens and follows IS' direction and may or may not give IS credit for the input. This role provides little public recognition to IS, but certainly makes life easier when decisions have IS input from the beginning. On the negative side, this role is often criticized by other members of the IS team as being political and not producing anything tangible.

This is a networking role whereby IS proactively seeks to show value, gather complaints, and keep in touch. One IS organization was completely outsourced primarily because they stopped utilizing this role and neglected to influence silently IS management, IS peers, and clients.

Problem-Solving Partner
In this role, IS and the client share risks and responsibilities, working together from beginning to end. IS learns a lot about the business. Clients learn a lot about information technology. Much more conflict will be surfaced when IS takes on this role. However, the outcome of this role is that the investment in IT is "ours" not "yours." This role will take more time on the front end, preventing IS from having to do things over again. A classic problem encountered in the problem-solving partner role: IS and the client agree to work together, sharing risks, responsibilities, and tasks. The client group becomes very busy with different priorities. IS thinks a deadline must be met and continues working on the project, taking on the client's responsibilities. The project still gets completed but the client is very unhappy with the end product, blames IS, and hesitates to partner with IS again. IS is confused, not understanding why the client does not recognize or appreciate all the extra work. How does this happen? IS, in the interest of meeting deadlines, switched to the technical wizard role and, as a result, received the negative side effects of that role. Many IS organizations do not even realize when they are slipping into the technical wizard role until after the project is completed. Instead of jumping in and taking over, discuss with the client the potential repercussions and risks (to them) of IS taking on the technical wizard role.

One other decision to make is which, if any, roles should an organization outsource? A large insurer had outsourced the problem-solving partner role and responsibilities in the early 1990s. Both IS and the business have found this to be a strategic error and are now struggling to completely reverse this model so that the technical roles are outsourced and the partner role is managed internally.

The authors work with several IS organizations who are outsourcing the technical wizard and technical assistant roles (remember the nice-to-have characteristics) so that their time, attention, and training are focused on strategically influencing and partnering with the business. Their headcount may be smaller, but their impact is greater.

Provide a Consulting Methodology
Have a clear methodology for the consulting practice. This brings consistency in the way an organization goes about consulting and shows clients that they have a process. Without a consulting methodology, IS members will follow their intuition when consulting with clients. Some members have great intuition and do fine. Clients, however, get confused when working with different IS personnel who utilize different approaches to consulting. Use the methodology as a guideline, not as another set of rules or rigid standards.

The 11-step consulting cycle in Exhibit 1 was developed by the authors' firm and is a roadmap utilized by IS organizations across the country. As an organization, decide what should be accomplished in each step of the process. How do other methodologies, particularly systems development methodology, fit in with this one? The most important aspect of the methodology is ensuring that everyone in IS knows what it is and consistently uses the same process. Having a methodology will increase the confidence of IS members because they no longer have to consult on the fly, guessing at what the next steps should be. It will also increase the confidence of clients who see IS, like external consultants, in a leadership position.

Having a methodology will increase the confidence of IS members because they no longer have to consult on the fly.

Develop a New Skill Set
If a company is going to compete against the Big 6 and other hungry service providers, it will need to make developing a new skill set across the organization a priority. In addition to technical and business skills, it will need to develop individual and team skills in core and advanced IS consulting, communication, negotiation, and marketing as shown on the IS skills continuum in Exhibit 2.

Identify skill-building training that is IS-specific and practical, not general or theoretical. Invite clients to participate in the training — they too will benefit as will the partnership. And make sure that the training can easily be applied and linked back to the staff's real-world IS environment.

As mentioned earlier, the senior IS leadership team needs to participate in the training process. The successful IS leaders the authors have worked with have participated in two ways. First, they took all of the required training themselves. Regardless of the length of the process, they were actively involved in every single day.

Resist the temptation of the executive briefing, typically a one-day, high-level, gloss over of the training. This will come back to haunt an IS leader again and again as the staff challenges his or her real commitment level (usually covertly) and as he or she finds that his or her skill set no longer fits the new business model, hence becoming unable to play the coaching role and speak the same language as everyone else.

Second, IS leaders have kicked off every professional development training program (about a 15-minute commitment) and reinforced why IS is moving to a consulting business, how they are helping staff get there, and what is in it for the staff. This, along with participation in the workshop wrap-up (another 15-minute commitment) to discuss where IS goes from here (and how can I/we help you get there), sends a strong message about commitment level. This also keeps the IS leader closer to the pulse and progress of the change effort (remember the initiative killers).

Two additional recommendations: ensure that the training and skill building has follow-through and is tied to performance reviews. Again, a consulting support system, where IS members can meet voluntarily and spend an hour building new skills and discussing what has and has not worked, will reinforce the change initiative. One client of the authors facilitates this support system through the use of Lotus Notes.

Conclusion
Moving an entire IS organization to the consulting model described in this article is a significant undertaking. The authors wish continued success to those CIOs who have already started down this path and are confident that the key learning points, examples, and methodology presented in this article will strengthen their position and conviction, and help them get there.

For those CIOs who have not started down this path because they do not see the value, have the time, or the expertise, this article hopefully will help them rethink their position, priorities, and strategy. Too often, the authors have seen those who leave their destinies in the hands of others (disgruntled clients and external service providers) who do not have their best interests in mind.