Is Your Cloud Consultant Losing It?

In recent years, cloud implementation consultants are acting like they’re losing their minds. If you think their actions or stupidity won’t affect your and your project, you’re wrong.

Unless you do system configuration and implementation work internally, you depend on your cloud consulting representative to complete projects. If they make mistakes, your entire project could be at risk. Or, if your project is completed correctly but they can’t make a profit, they may eventually bail on you. This means you must do your homework when working with technology consulting and cloud consulting companies.

While we’re dependent upon proper operation in competitive markets, participants typically don’t do well in unhealthy markets. You’ll see it first through desperation in vendors and it shows itself later as failed projects. Even though the market for cloud consulting services is booming, the market isn’t healthy.

The cloud consulting market is facing many challenges. Here’s why:

• New vendors around the world are trying to compete and blowing the bottom out of the market. Using low-end vendors typically means more monitoring and management for clients. You may never consider these vendors, but they’re still taking margins out of the business for everyone.
• Since cloud vendors are innovating constantly, technology platforms are more complicated. It’s common to need to learn a new language or toolkit every year. This means fewer consultants are fully competent and up-to-speed on the latest.
• Clients aren’t doing their homework or dedicating enough resources to the project. In fact, they don’t really know what they need. Even without requirements, they’re getting fixed-price bids before initial discovery takes place. These situations often lead to lawsuits.
• Clients don’t treat their cloud computing software as a long-term corporate asset and aren’t taking their project seriously. Keep in mind, even if you don’t control the hardware and operating environment, it’s still IT.
• Many believe the myth that cloud technology consulting projects should cost around “1x the annual license revenue.” If you consider the annual license revenues of most cloud vendors and compare it to on-premises software, you may expect the multiple to be much larger. This price expectation is unrealistic and dangerous.

So, What Does This Mean?

You may think, “Great! More competitors mean a lower price AND they’re battling to improve systems and products.” The problem is when everyone in the cloud starts making bad decisions, others will follow suit and no one wins.

Cloud consulting has taken a turn in the last few years. The following are a few observations:

• Clients are focused on price, not the value it brings to their business. With very little trust and a higher emphasis on micromanagement, this creates a bad situation for all parties involved.
• The rates of winning the bidding wars have lowered. This means vendors are lobbing out proposals without giving them much thought. While the project cost has risen, opportunities for project innovation has declined. This results in one-size-fits-all solutions and lower client satisfaction.
• Sales reps are quick to say, “Yes,” before knowing what the client truly needs and if the technology available can meet their demands. The sales rep simply makes the sale but the issues are noticed later as the project begins. These late changes can result in a project costing upwards of three times what was originally quoted or huge change orders (including cancellations or lawsuits).
• Clients are quick to use resources from overseas with little thought. Not only is distance a factor, but so are time zones, business culture, and language barriers. This can lead to big problems later in a project.

Our Best Advice? Take Your Time

These issues can be alleviated by taking your time as your research vendors. Be thorough in your final selection for technology consulting. Spend a little money on the initial discovery and analysis with a consultant before your project begins and screen consultants thoroughly.

If you don’t trust your consultant to make good decisions for your company and deliver high-quality results, you’re already headed the wrong direction. You should cut ties and exit the relationship as early as possible.