The first question to ask is do you really need a SOA Consultant?
In most cases the answer is yes.
The consultant has vast knowledge and experience and deeper understanding.
An Aberdeen Group survey finding supports the conclusion above.
Consultants participate in Best in Class (BIC) enterprises SOA initiatives more than in average enterprises. Laggards SOA initiatives include consultants even less often than average enterprises initiatives.
The next question to ask is: What kind of SOA Consultant should you hire?
I read a relatively old but interesting ZapFlash written by ZapThink's Jason Bloomberg in 2008. The ZapFlash titled: The Great SOA Consultant Squeeze discusses this issue.
The ZapFlash describes a scenario of Request for Proposal (RFP) send to three consulting firms: a large, internationally known firm, a midsize firm with a well-regarded technical focus, and a boutique SOA firm that focuses solely on SOA engagements. Surprisingly, the large firm, whom you expected to be the highest, proposes only 20% of the boutique’s price.
Be aware of cheap proposals
You can be sure that there are no free meals. The difference in price reflects the difference in consultancy quality as explained in the ZapFlash.
SOA or not SOA, you better ask yourself, why one proposal's price is a lot cheaper than its competitors.
Assume you are the bidder of the cheapest proposal, which is 20% or 30% or 50% cheaper than other proposals. In most cases, you can estimate the price of the other proposals, and you should have a good reason for bidding so low.
In most cases, your proposal is inferior in functionality and quality and also costs you less to provide the product, project or consultancy.
Now return to your role as the valuator and be aware of your real overall costs (including indirect costs) by choosing the inferior and cheapest proposal. In most cases the cheapest proposal will be the most expansive.
For example, an inadequate SOA implementation due to inappropriate consultancy could cost millions of dollars, with no Return On Investment (ROI).
Adequate and more costly consultancy could have a real Business Value Proposition.
Not all cheap proposals are risky
There are exceptions to the rule cited above.
My experience as consultant reveals some real world cases of cheap but good for the customer bidding. Following description of three examples:
1. The customer does not need the functionality
One of two competing products price was about 10 times higher than the other product. It is true that the second product was a better product including a lot of functionality missing in the other product. However, after I analyzed the customer requirements and wish list for the next three years, I concluded that the customer will use only the basic functionality included in both products.
My recommendation was: Buy the cheap product and use it. The product could be replaced by the second product after three or five years, in case of a need to use extended functionality. It should be noted that it is not a development tool but a product which is used by only three or four employees, so training costs are not significant.
2. First installation in a country
On product is a well established product with large installed base in a country.
The other is a newer and better product, but has no installed base in the country (There are already success stories in other countries).
The price could be cheap because the vendor must show reference sites in the country in order to sell it and its local team need a real world hand on experience.
3. Change of Distributors
A global vendor is an acquisition process of another vendor (common phenomena. See for example previous post: vendors Survival: Guide Supermarket Grocery and Kiosk).
The distributor learned that the result of previous acquisitions was a different distribution and support model: The local branch replaced the local distributor. The distributor may try to sale quickly as many instances of the product, before losing the business. He is ready to sell a good product in a low price, provided that the sale process time is short.
Consulting Large firm vs. Boutique firm
As an Independent Consultant I competed with large firms. In many cases they won because the customer thought that they provide the same quality service for higher price but for reduced risk (and because their teams included professional sales man and I am an expert and not a sales man).
ZapThink's Zapflash shows that in many cases a Boutique firm consultancy could be better than a Large firm consultancy. In the end of the day the client relies on the skills and experience of the actual consultant providing the service. The additional resources and the large company's knowledge base not always compensate for the skills gap between that consultant and a Boutique firm Consultant or Independent Consultant.
Another issue is conflict of interests. A Middleware solution selection consulting assignment I won competing with a large vendor is a good example.
I could not care less, which product will be selected as long as it is the best fit for the customer's needs.
Unlike me, the large vendor was one of the distributors of one of the products. In addition to choosing a product, the vendor aimed at executing the installation and assimilation of the product, to running projects based on the selected product and saling related software products.
The third question to ask: Which SOA Consultant to hire?
In most cases you should hire a SOA consultant with a deep understanding and a lot of experience. Avoid of choosing consultants having conflict of interests.
Do not hire the cheapest available SOA consultant.
The reality is that in many cases enterprises are choosing inadequate consultants. A survey finding showing that 4 out of 5 SOA implementations failed supports my case (and it does not matter if the survey is inaccurate and the real figures are one of two instead of 4 of 5).
The most difficult case is the half baked cake case, i.e. an enterprise, which is already executing a SOA initiative and looks in this stage for a SOA consultant.
In this situation the consultant needs profound understanding of SOA and creativity not only for doing it right but also for correcting mistakes that were done.
In most cases the answer is yes.
The consultant has vast knowledge and experience and deeper understanding.
An Aberdeen Group survey finding supports the conclusion above.
Consultants participate in Best in Class (BIC) enterprises SOA initiatives more than in average enterprises. Laggards SOA initiatives include consultants even less often than average enterprises initiatives.
The next question to ask is: What kind of SOA Consultant should you hire?
I read a relatively old but interesting ZapFlash written by ZapThink's Jason Bloomberg in 2008. The ZapFlash titled: The Great SOA Consultant Squeeze discusses this issue.
The ZapFlash describes a scenario of Request for Proposal (RFP) send to three consulting firms: a large, internationally known firm, a midsize firm with a well-regarded technical focus, and a boutique SOA firm that focuses solely on SOA engagements. Surprisingly, the large firm, whom you expected to be the highest, proposes only 20% of the boutique’s price.
Be aware of cheap proposals
You can be sure that there are no free meals. The difference in price reflects the difference in consultancy quality as explained in the ZapFlash.
SOA or not SOA, you better ask yourself, why one proposal's price is a lot cheaper than its competitors.
Assume you are the bidder of the cheapest proposal, which is 20% or 30% or 50% cheaper than other proposals. In most cases, you can estimate the price of the other proposals, and you should have a good reason for bidding so low.
In most cases, your proposal is inferior in functionality and quality and also costs you less to provide the product, project or consultancy.
Now return to your role as the valuator and be aware of your real overall costs (including indirect costs) by choosing the inferior and cheapest proposal. In most cases the cheapest proposal will be the most expansive.
For example, an inadequate SOA implementation due to inappropriate consultancy could cost millions of dollars, with no Return On Investment (ROI).
Adequate and more costly consultancy could have a real Business Value Proposition.
Not all cheap proposals are risky
There are exceptions to the rule cited above.
My experience as consultant reveals some real world cases of cheap but good for the customer bidding. Following description of three examples:
1. The customer does not need the functionality
One of two competing products price was about 10 times higher than the other product. It is true that the second product was a better product including a lot of functionality missing in the other product. However, after I analyzed the customer requirements and wish list for the next three years, I concluded that the customer will use only the basic functionality included in both products.
My recommendation was: Buy the cheap product and use it. The product could be replaced by the second product after three or five years, in case of a need to use extended functionality. It should be noted that it is not a development tool but a product which is used by only three or four employees, so training costs are not significant.
2. First installation in a country
On product is a well established product with large installed base in a country.
The other is a newer and better product, but has no installed base in the country (There are already success stories in other countries).
The price could be cheap because the vendor must show reference sites in the country in order to sell it and its local team need a real world hand on experience.
3. Change of Distributors
A global vendor is an acquisition process of another vendor (common phenomena. See for example previous post: vendors Survival: Guide Supermarket Grocery and Kiosk).
The distributor learned that the result of previous acquisitions was a different distribution and support model: The local branch replaced the local distributor. The distributor may try to sale quickly as many instances of the product, before losing the business. He is ready to sell a good product in a low price, provided that the sale process time is short.
Consulting Large firm vs. Boutique firm
As an Independent Consultant I competed with large firms. In many cases they won because the customer thought that they provide the same quality service for higher price but for reduced risk (and because their teams included professional sales man and I am an expert and not a sales man).
ZapThink's Zapflash shows that in many cases a Boutique firm consultancy could be better than a Large firm consultancy. In the end of the day the client relies on the skills and experience of the actual consultant providing the service. The additional resources and the large company's knowledge base not always compensate for the skills gap between that consultant and a Boutique firm Consultant or Independent Consultant.
Another issue is conflict of interests. A Middleware solution selection consulting assignment I won competing with a large vendor is a good example.
I could not care less, which product will be selected as long as it is the best fit for the customer's needs.
Unlike me, the large vendor was one of the distributors of one of the products. In addition to choosing a product, the vendor aimed at executing the installation and assimilation of the product, to running projects based on the selected product and saling related software products.
The third question to ask: Which SOA Consultant to hire?
In most cases you should hire a SOA consultant with a deep understanding and a lot of experience. Avoid of choosing consultants having conflict of interests.
Do not hire the cheapest available SOA consultant.
The reality is that in many cases enterprises are choosing inadequate consultants. A survey finding showing that 4 out of 5 SOA implementations failed supports my case (and it does not matter if the survey is inaccurate and the real figures are one of two instead of 4 of 5).
The most difficult case is the half baked cake case, i.e. an enterprise, which is already executing a SOA initiative and looks in this stage for a SOA consultant.
In this situation the consultant needs profound understanding of SOA and creativity not only for doing it right but also for correcting mistakes that were done.
Comments
Thanks Avi, interesting points.
Also, I think that a SOA consultant should also have a BPM understanding since some of the SOA consultants are very strong in Integration but less on the "Business" - the B part of BPM.
Posted by Einat Shimoni