8 Types Of Software Consulting Firms – Which One Do You Work For?

ConsultantI have strong opinions regarding software consulting and consulting companies, which is probably no surprise as I seem to have a strong opinion about most things :). It's not a bad thing, makes for some lively conversation over drinks, but it is also a bit of a pain as it makes it hard to choose what to write about. I'll regale you with my serious thoughts regarding consulting in another post (don't forget to subscribe to my feed so you don't miss it) – today we'll try to maintain a bit of a lighter tone.

A little while ago I read an interesting book called "The Nomadic Developer", if you are considering going into consulting I recommend you read it (although you would appreciate it more if you've already worked in software consulting). The book has some decent advice and information for budding/existing software consultants, but the thing that really caught my eye was the humorous classification of consulting firms found at the beginning of the book. It was titled "The Seven Deadly Firms" and I thought I would share it with you for a bit of fun as well as adding one more classification of my own to bring the total up to eight. I will quote and paraphrase as necessary – here we go.

BOZO Consulting

BOZO is a place with well-intentioned people who really want to please their clients. The only downside to BOZO is it doesn't have the slightest clue about how to achieve that goal. BOZO says yes to everything: "Yes, of course we will cut the estimate." "Yes, of course, we will lower our bill rate." The idea is to get the deal at all costs. To summarize, BOZO has a sales-driven culture that lacks the ability to leverage any sort of delivery capability it accidentally hires (thought from Skorks: that would have to be one of the most buzzword driven sentences ever, how can we "leverage" that).

FEAR Consulting

Firm founded on its ability to motivate software developers by fear. Micromanagement, abuse and/or Machiavellian management techniques are the tools this firm uses to generate mundane and uninspired results for clients. The best way to describe how FEAR stays in business despite such deplorable working conditions and treatment is to reference what is known as the Stockholm Syndrome (thought from Skorks: the funny/sad thing is that any consultancy can accidentally/purposely take on aspects of FEAR Consulting in certain situation (financial/project pressures etc.)).

The Body Shop

Contracting firm that pretends to be a consultancy. Sadly, not all consultants involved have been informed of this "minor" detail. The Body Shop has zero corporate culture. No events, no infrastructure and no interaction with fellow "consultants". Working for a Body Shop you run significant risk of getting the sack after completing your first gig if there is no work immediately available (thought from Skorks: does anyone else find it funny that the body shop is an actual company, unfortunately all they do is sell skin care products, but who knows software consulting could be in their future).

CHEAP Consulting

Some firms compete on quality. CHEAP consulting isn't one of those firms. This is a great place to work as long as eating and having a roof over your head are not huge priorities for you. CHEAP Consulting firms execute entire projects using hordes of low-cost developers, rather than small numbers of good ones. Ironically, this makes their projects, after all is said and done, come in far more over budget than the firms they competed against in the first place. The main feature of CHEAP is the heavy use of the word resource. (thought from Skorks: and you know how I feel about the word resource, anyway, probably not too many of these around in the first world even cheap developers are reasonably expensive if the cost of living is high enough).

Personality Cult Consulting

The only drink that this firm has in the refrigerator is kool-aid. And if you refuse to drink it – that is, decide not to indulge in the cult of local hero worship – you might not have a future here. Critical thinking skills are not the highest priority. Frequently, a person who combines charisma with a good measure of talents finds himself able to start a consulting company that capitalizes on these traits. What starts out as a small group of like-minded people with a mission grows into a creature called PC Consulting. Discussions in such a place are rife with appeals to authority; that is, if the cult leader says something, it not only is given a lot of weight, but is treated as gospel (thought from Skorks: you know what I said about me having strong opinions, I cringe at how quickly I, and most decent developers I know, would get their ass handed to them in a place like this).

Smelzer and Melzer Accounting

Accountant

Even the owners of this place, an accounting partnership, wonder how they ended up in the "computers" business. They know they make money from it but are unsure why, and frankly, they are not sure they trust these "kids" who have a lot of scary ideas. In most cases, accounting firms are run by accountants. And accountants frequently have significant issues with the way software tends to be developed. Software development methodology is chosen, based on what is perceived as predictable and developers often become the scapegoats when the expectations of predictability fail to materialize (thought from Skorks: this one is easy, Big Four anyone?).

"Push the SKU" Consulting

"Services" arm of a product company that ends up acting as a de-facto sales force for the product, while at the same time, getting paid by the hour from the client to sell…ahem, I mean… "provide independent advice". The incentive system tends to make this not the place for development of software that works independent of a particular product. Such an organization is not always a good place for software developers who have the interest of the client at heart first and foremost (thought from Skorks: does your software do X? "Sure, sure it does, it just needs some minor configuration …").

Band Of Freelancers (My Contribution)

A bunch of friends decide to form a company to build the next great product. But of course building products takes time and you have to live in the meantime, so everyone picks up some occasional consulting work to "keep the lights on". The only problem is, occasional means pretty much permanent and it is difficult to write a product while working full time on something else. So, all the "founders" keep on consulting and no product ever materializes, so the company turns into a perpetual band-of-freelancers consulting company. The real danger is that the "founders" actually do well as consultants and are able to hire more people at which point there is a real danger of this company turning into BOZO, Body Shop or Personality Cult consulting.

There you go, humorous – yes, but also rather accurate, wouldn't you agree? Of course all those are examples of potentially dysfunctional consulting companies. There are plenty of big and small consultancies (admittedly mostly smaller) that are great places to work, treat their people well and approach their software development with skill and wisdom. The thing to be aware of is that no matter how good a consulting company is, most will exhibit at least some aspects of the above 8 at one point or another. The trick is to know whether or not, it is just a bad patch – soon corrected and forgotten – or whether it is becoming more of a permanent situation. Anyways, go check out the book if you want to get the full descriptions as well as tips for recognising if you might, infact, be working for one of these companies. If you do work for a software consultancy, how would you classify the company you work for? Does it by any chance fall into one of the 8 categories above?

On an even lighter note, is it just me or does anyone else ever misspell the word consulting as consluting, can be a little embarrassing if you do it in any kind of semi-official document. The other one is conlusting which also works but is not quite as good :).

Images by orkboi and Venn Diagram

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  • http://conceivian.com Saqib Rasool

    Skork, fearing your blog and the book mentioned above might impact the minds of budding entrepreneurs, I am compelled to provide some rebuttal as food for thought using the same categories in your blog post. This also doubles as an advice on how to do a consulting firm:

    1. When starting out you probably dont know what does your service cost and get priced at. Do you first couple of gigs, take what you can get, sit back, analyze your cost, the market conditions, and attach a new price to your service. Constantly review your pricing. Never sell per diem services, and always charge for the value. It is not bad idea to get started with some introductory prices, but within first year, learn and renew. In my culture there is a saying, “it is not a sin to start as a clerk, it is a sin to retire as one”

    2. Body shop style consulting firms have done well. It provide a huge value for the client. Clients can take in experts where they are not strong, and absorb in their own culture. Certain type of consultants love going from Client to Client and enjoy have a taste of a different culture every now and then. Accenture has done well for itself being a Body Shop.

    3. There is nothing wrong with placing client in a highest priority. As a consultant your reputation is what you got, and most business you will get is through a word of mouth. If you are not in the business of making happy clients, you are a in wrong business. Go get a job somewhere, just not in consulting firm.

    4. A good number of really good consulting firms started around a personality of its founder(s) and have done well. People want leadership. There is nothing wrong in joining a strong leader in her or his practice and learn along the way. Booze Allen, BCG, Mackenzie, and some of the new ones like HashRocket are good examples of this. As long as the leader is not a tyrant and completely closed all outside ideas..

    5. Having pre-backed products and offering them as configurable solutions to the clients has an amazing value for clients and consultants. Imagine if you had to develop CMS from ground up every time client contracted you for content based website, vs. taking Sharepoint, or Drupal off the shelf and offering as a solution. Domain expert consulting firms find themselves repeating the same solutions for many clients, and eventually productize their solution. As a developer if you picked learning customizing the right kind of solution (like SAP), it could mean a revenue stability for you.

    6. Many successful consulting firms started as band of so called freelancers and developed their own product, and did really well. You need a strong leader(s) or organizer to be head of the group and really committed people to make this sort of thing work. If everyone is working on their own little startup, and get their own little gigs, there is a little chance you will be able to put product out. 37 Signals is a shining example of success in such category.

    Hope this helps.

    • http://www.skorks.com Alan Skorkin

      Hi Saqib,

      Those are all really good points, thanks for sharing your views. I just want to add a couple things.

      Accenture does have aspects of a body shop, but they do quite a lot of corporate bonding, training etc. so thay also have aspects of a kool-aid type of culture. It is difficult to pigeonhole a company that big into one category.

      You’re also right about the fact that strong leadership can often mean success, but you also give the key to this in that you always have to remain open to outside ideas and be aware that the leader is not the be-all end-all.

      It is fine to productize things, infact I would encourage it, but don’t fall into the trap of seeing your shiny product as the solution to any problem every client might have. Accept the fact the your product will only be a good fit some of the time. Many companies try to make their products everything to everyone.

      There is nothing wrong with starting as a band of freelancer, but you always have to keep your primary goal firmly in mind. If consulting is just a side gig for you, then make sure it doesn’t become your primary one. If it IS your primary gig, then make sure you’re aware of it from the outset. And I completely agree with you that you need a strong leader(s) or organizer to make this model successful.

  • http://www.marcky.es Marcky

    and so… which one do you work for, Alan? ;)

    once again, great post :)

    • http://www.skorks.com Alan Skorkin

      Haha, I am not working for a consultancy right now, although I have done in the past :). I needed a break from the consulting world, as I said, no matter how good the consulting company you work for, it can take on aspects of one of the 8 I described at times – that can really wear you out after a while.

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  • Korny

    Funny, I seem to have worked for three of those companies – all at the same time!

    One recurring pattern I see in consultancies is the “Trading in our reputation for cash” cycle.
    It works like this:

    1. Small consultancy starts with a group of friends, or some other clumping of smart people. They focus on quality, they hire carefully, and they may even talk sincerely about product development: “Consulting is just to pay the bills until our product line takes off”

    2. After the inevitable slow start, they find that word of mouth is spreading, and their skills are in demand. Folks will pay significant dollars for their people, and their reputation grows. As a result:

    2a. The best people are constantly in demand – in fact a few get “embedded” at big firms on long-term contracts

    2b. They need to hire more people – but it’s hard to go through an arduous interviewing processs, especially when the best people are unavailable to do it. It’s also hard to turn down merely average developers, when you know you can send them to big-faceless-corporate for $1000+ a day. So hiring principles slip, and the quality slowly slips

    2c. Product development? What’s that?

    3. Slowly, the good people leave – they have no corporate culture, they know the folks they are embedded with better than the folks they left behind.

    4. The quality starts to definitely slip at this point – but a good reputation is hard to kill; someone will always say “Hey, those FnordCo guys were great, can we get a few of them in for this next job?”. And there will be good folk amongst the dross for a long time, so the reputation won’t hit zero, it’ll just drift down from “awesome” to “ok I guess”.

    5. Eventually, you will have yet another bodyshop. Probably containing none of the original team of friends – those who were managers will have cashed in a pile of money and moved on, the rest will have just moved on. Some of them will have gone off to form a new consultancy, “this time we’ll do it right”…

    Sound familiar? This of course relates to none of the awesome consultancies I’ve worked in, or worked with, in the past…

    • http://www.skorks.com Alan Skorkin

      I completely agree, that is definitely a pattern I have seen before, very sad when it happens to a company that you have some emotional investment in.

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  • http://www.surgeforward.com SaaS

    Good post. Thanks for the humor and the truth. I think this is true of all business though. If you look you can see remnants of this type of humorous activity in many companies. Thanks for the book suggestion too I will be reading that book soon.

  • Bill

    I am doing a paper on investment banking for college. I really do not have any clue. Can you help?

  • Darshan

    Thats a quite nice list of the services provided by various IT companies and it also given me info about how to get cash flow in my own IT company.

    I am currently capturing venture capital for my startup and I am glad that future is very bright. I am interested in Inventive company.

  • dialus

    It is nice post.Thank you.