What exactly is benchmarking?

Definition:

The simplest definition is "improving by learning from others". Benchmarking is the systematic comparison of processes and performance in organizations. In other words benchmarking is a system used in management and particularly strategic management, in which organizations evaluate various aspects of their processes in relation to best practice, usually within their own sector.

Origin of term:

The term benchmark originates from the chiselled horizontal marks or notches that surveyors made in stone structures. These notches or marks represented a given altitude and against which other heights could be calibrated or "benchmarked". Xerox is the first modern corporation to use benchmarking extensively and systematically.

Benefits:

Benchmarking is done usually to create new standards and/or improve processes. Benchmarking lets organizations develop plans on how to adopt such best practice for increasing performance. However, we should remember that rather than being a one time only affair, Benchmarking is a continuous process in which organizations regularly seek to challenge and improve their processes and practices. If properly and efficiently conducted, benchmarking can provide valuable insights into relative strengths, weaknesses of the organisation or it's processes. Further it can bring in fresh ideas, new insights of different kinds and show possible improvements.

Different kinds of Benchmarking:

There are basically four different kinds of benchmarking:

1. Internal - Here benchmarking takes place inside an organisation, e.g. between departments or business units
2. Functional - Here benchmarking is done for similar processes within the same field or industry
3. Competitive - Benchmarking operations/processes and performance with competitors in the same field or market is conducted here
4. Generic - Here processes/operations and performance is compared between organisations of similar size in unrelated industries

Another way to categorize benchmarking is by aims of benchmarking - Process benchmarking, Financial benchmarking, Performance benchmarking, Product benchmarking, Strategic benchmarking and Functional benchmarking.

When to use Benchmarking?

Benchmarking is very difficult. It requires the full commitment of the managers in the organisation. They must also be prepared to analyse everything methodically and be ready for the occasional unpleasant surprise. Most importantly all parties must be committed to accepting change.

The main question to be asked is: what do we aim to achieve with benchmarking?

Typically benchmarking answers the following questions:

• How good are we in all the areas we choose to investigate?
• Are we as good as the others in these actions?
• How can we perform better?

In order to justify the significant costs involved, benchmarking should be a systematic process and all parties involved should know why it is being done. The actual process may vary from organization to organization and from industry to industry. The real needs of the organization dictate the model or tool to be chosen. The five-phase model with planning, data collection, analysis, implementation and monitoring is a commonly used benchmarking tool.

Rather than being just an add-on, Benchmarking is integral to the business strategy and it should be practiced continuously. David Kearns, Chairman of Xerox Corporation once said "Striving for best practice is like running in a race without a finish line". Best practice models and tools may constantly change, but continuous benchmarking can help an organisation identify what it needs to remain in the race.

References:

• Spendolini, M.J. (1992). The benchmarking book. New York: ANACOM.
• Camp, R. C. (Ed.) (1998). Global cases in benchmarking: Best practices from organizations around the world. Milwaukee, WI: American Society for Quality Control: Quality Press.

Therefore do not be discouraged if you feel you don't have the necessary skills or knowledge to become a good I.T. consultant. The trick is to identify your specific I.T. skills, and find a niche in the market place for your particular brand of consulting.

On the other hand if you are fairly confident about your skills and knowledge and know where you are going, then it can be just a case of using a sound marketing strategy. Either way this Consultancy course will be able to identify the most appropriate paths and routes for you.

Just to give you a "taste" for what consultancy can be about, have you ever seen the series Hell's kitchen on TV with Gordon Ramsey? In Hell's Kitchen Mr Ramsey provides consultancy in the business of serving up good food and running a restaurant. Gordon Ramsey is an expert in his field. He usually lets his clients know (in no uncertain terms) where they are failing and advises them how to turn their business from making a loss, into a resounding profit. He has appeared on TV many times and has written numerous books on the subject.

Although we would not use the "Gordon Ramsey" approach in I.T. (after all, swearing, such as his on his "F" word program would not go down well with I.T. business owners) he does get his message across. The underlying theme of his work is emphasised by one word, (No not the "F" word as he likes to call it!), but "Passion"! To be a consultant you need to be able to provide expertise in your chosen area, and be passionate about it. Consultancy is not for the half hearted!

I also recommend the film "Hitch" with Will Smith. He provides consultancy on dating to prospective clients. However, in the end he has to resort to NOT using his skills on his prospective partner, as in this case it was a clear case of business and pleasure not being able to mix! If you are going to be a good consultant, the underlying theme is generally do not mix business with pleasure, unless you are taking a prospective client out to dinner or for a drink and trying to sell them your services. You should always have your "business" head on in this field.

However, if the thought of working for yourself, choosing your own hours, how much you will get paid, and being you own boss appeals to you then this will all help you in your cause, and it can be fun in it's own right.

This introduction hopes to be able to assist you in answering the following questions:

What are the advantages and disadvantages of I.T. consultancy?

What are your lifestyle and earning goals?

What are the factors that go into freelance work?

How do you gain experience prior to I.T. consultancy?

We can refine this further into the "Who", "What", "Why" and "How" of I.T. consulting.

Who are your prospective clients i.e your target audience?

What skills and knowledge can you offer?

Why do you want to do this?

How do you go about it?

We will aim to answer all these questions during this part of the course.

We will now aim to see what your motivations are, and where you think your I.T. skills can be utilised fully as a consultant. We have a questionnaire and a skills grid. Please answer these as honestly as you can. The questionnaire looks at your motivation for wanting to become an I.T. consultant, and the second identifies key areas, and skills in I.T. which could potentially be used in a consulting career.

By using the questionnaire and skills matrix you can recognise your own motivations and identify key technology areas where you may feel you could benefit from further training, or enhance the skills you currently have..

The I.T. Consultants Challenge Quiz

Here is the consultants challenge questionnaire. Read each question and circle the answer (A,B,C,D or E) that comes closest to your personal feelings. Please be honest in your responses, in order to gain the maximum benefit from the analysis of your responses, which is provided at the end of the quiz.

Q1 Do you enjoy solving I.T. problems?

• A) I don't mind solving I.T. problems during working hours, but when I go home I like to forget it.
• B) I always try to delegate the I.T. problem when I can. Let's just say I am using resources available to me.
• C) Yes, providing I.T. solutions on a technical or business level is all I am about.
• D) Yes, I like solving technical or business I.T. problems, but not both.
• E) I like to think that everything works, so that I don't have to solve anything

Q2 Can you set your goals and do you have a clear vision of where your I.T. consultancy will deliver?

• A) I don't mind solving I.T. problems during working hours, but when I go home I like to forget it.
• B) Mmmm not sure about this. At the moment I do not have clear cut I.T. goals.
• C) Yes I set my own goals, but for one reason or another I don't always follow up on them
• D) My goodness, yes! My I.T. goals are as important to me as those scored by (Manchester Utd, Liverpool, Arsenal, etc etc, whatever your preference!).
• E) I am efficient, and therefore my goals set themselves.

Q3 Are you a self starter, do you find yourself solving I.T. problems in your head, even when you are nodding off to sleep?

• A) I don't see myself as a self starter at the moment, but willing to learn
• B) I am not used to making my own decisions, but I do like the idea of working on my own though
• C) I am an independent self starter, but sometimes I procrastinate and put things off. Once I get started though, I am away!
• D) If I had initial assistance from someone, then this would help me on my way
• E) I don't need any motivation, I love what I do and solving I.T. problems.

Q4 Are you confident about your I.T. knowledge/skills to get the job done?

• A) Not sure at the moment
• B) I consider myself to be an expert in my field
• C) I am confident, yes
• D) Not very confident
• E) With further training and study, I could be

Q5 Do you enjoy pursuing technological challenges to completion, despite the obstacles which will inevitably arise?

• A) I am very persistent
• B) It makes it easier when you have people around you who can assist with this
• C) Usually, but sometimes I avoid tackling technology problems directly
• D) I would settle for a "workaround" or temporary solution if it gets the job done
• E) Is any problem in I.T. truly ever complete?

Q6 I.T. is rife with rapid change, more than any other industry. Can you adapt?

• A) My middle name is change. Just make sure you fill out a change request first, and let's do it properly!
• B) It's easier to adapt to good changes, which are relatively easy to implement, than bad changes which may need to be reversed out
• C) Change happens all the time
• D) As long as it does not change me
• E) It's easier when things don't change

Q7 I.T. Demands a level of logical ability, however, your artistic and creative side does come into play. Where do you you stand on creativity and innovation?

• A) Not always, it is hit and miss
• B. I need to think about that one.
• C. Just give me a pencil and a piece of paper, and you will have your solution in 5 minutes.
• D. I don't see myself as a very creative person.
• E. I don't believe in re-creating the wheel, why not just use what we have already?

Q8 In your I.T. consultancy career, you may have to deal with people at various levels. What are your views on this?

• A) I prefer to work alone, if possible
• B) I prefer to take a project, and be left alone to work on it to completion, as long as people are on hand to communicate with in case I have problems
• C) I.T. consultancy is all about working with people, and that's what makes the job so interesting.
• D) Definitely, but some people more than others, however
• E) I prefer to work with those in authority, because they are the people who usually are leading a project

Q9 As an I.T. consultant, you will come up against all kinds of people, from the easy going manager, to the demanding company director, and the programmer resistant to change. The thing is this. Are you trustworthy, loyal, honest, and above all brave!

• A) What's the next question?
• B) I have other more important qualities, which are not mentioned in this list
• C) About half of these I think
• D) Well, it's hard to live up to, but I can say I am most of these, if not all
• E) Definitely all of the above. I see my clients as potential friends, not just people I do business with.

Q10 By definition I.T. consulting should be a nice earner and a great career. Given the questions previously asked, how interested are you in going down this route, given that it might actually involve the word W.O.R.K?

• A) Not sure at the moment. Just now I like things the way they are.
• B) Would .be interested if the word WORK, was more than matched by the word REWARD.
• C) One day I am going to win the lottery!
• D) My opportunities are unlimited, and I can't wait to get started!
• E) If I box clever I am sure that I would not need to work too hard

Now you have completed the quiz, you can analyse your score as described in the next section.

Introduction To I.T. Consulting Challenge Quiz outcomes

Please analyze the scores, and see where you are at the moment with regard to your motivation in I.T. Consultancy. The questions are numbered at the side, and score for each (A,B,C,D,E) is shown in the relevant box:

Totals

Final Total = A + B + C + D + E =

Analysis of scores:

25 to 50 Points

You are highly motivated by I.T. and, have right attitude required to make it as a consultant. Once you have identified where your I.T. technical/business skills lie, we would suggest that you concentrate on marketing your ideas and your services.

1 to 24 Points

If you are not sure of making the full leap just yet, perhaps you can build up your business on a part-time basis, alongside your day job, while you add to your skillsets and build up your contacts. You definitely have the potential to become a great I.T. consultant. We strongly recommend that you study this course, understand the basics, and find out how to grow your business.

0 Points

In this category you could go either way. We recommend that you complete this course, and take the test again at the end of the course, when you will have a clearer idea of where you stand on the subject at that point.

- 1 to - 24 Points

At this stage, it is more likely that you would be better keeping your current day job, but if you are still interested, perhaps you could run a part-time consultancy to try the "water". We strongly recommend that this stage you complete this course, then at the end take this test again. If, at the end of the course, your quiz results are similar, then perhaps being an I.T. consultant is not currently for you.

-25 to -50 Points

We would not recommend that you indulge in becoming an I.T. consultant until you can achieve a higher score. That does not mean however, that you will not gain great benefits from the course, and we recommend that you complete it. Even as an employee there are ideas in this course which should assist you in improving the daily work that you do, and you will be more appreciated at work as a result.

Skills Matrix

This part of the introduction is dedicated to your current skill sets and business knowledge, and tries to help identify possible niche markets for your consultancy. It may also be used to provide you with guidance for future skills and knowledge you would like to add to your portfolio. This skills matrix consists of a list of areas in I.T. or business, which are relevant to the skills you currently have. For example, if you are a confident Java programmer, you would fill the "Java" programming box. We also include a rating so that you can rate yourself on each skill, from 1 to 5. There is no written analysis at the end. The main objective of the matrix is to provide guidance of where you currently stand in relation to your overall consultancy offerings. The matrix should be printed out and kept as a separate document, and kept up to date. It should be reviewed every few months or so..

It may be that in some areas you are partly skilled, and perhaps you can "train up" in the areas where you feel you are weakest, hence the 1-5 rating you provide. The same rules apply to this matrix as for the challenge quiz, i.e. absolute honesty is required. Otherwise there is no point in using the skills matrix as a guide to your current and potential skill sets and knowledge areas.

Please note that some sections have been left deliberately blank, and marked "Other skills" for each section. This matrix only contains a sub-set of those possible in terms of I.T. business and Technical skills, and is to be used as a starting point only. Feel free to tailor the matrix to the appropriate I.T. technical and business skills you currently have.

It may be that you need to add a completely new section to the list. Hence the reason for displaying the matrix in individual sections for each topic area, so that it is as flexible as possible to accommodate your I.T. offerings.

Some items may appear in more than one list, such as "perl" which can be used for web based programming, or general "text" handling use, so you can rate your skills by context if you so wish. E.g. You may be a rating 4 for perl on text based applications, but using it for web based applications, not as proficient, therefore in this context you are a rating 3. In this way, you ave identified an area where you might want to expand your knowledge.

Please don't just include current skillsets, but skills you would wish to have in future or to work towards. Also, include any certifications you have, or would like to have. Feel free to include as little or as much information and I.T. related topics as you like. However, it is beneficial to add as much as possible.

We have provided a few examples, to start you off. These are only provided to guide you, and is not set in stone. There will be many I.T. technical or business skills not listed in this example matrix.

Once completed, please rate each subject according to the information provided below.

Each skill/certification area is rated by the following numbers:

5 = Expert in this skill

4 = Above average

3 = Average

2 = Further training required

1 = Aware of, or interested in this topic.

If you have no knowledge or skill or have no interest in an area you just leave the topic blank.

Other areas to include could be:

Qualifications

Business skills

Database skills

Mentoring/Training skills

Specialist skills

Any other areas you feel are missing from this list, as long as they are related to I.T. in either a business, or a technical capacity.

What makes a good I.T. consultant?

The challenge quiz attempted to identify your motivations in becoming an I.T. consultant. Motivation is a quality which is required, but is of no use unless you have some kind of "expertise" to offer your clients. You should not try to take on tasks which are beyond your knowledge and experience. However, a good consultant will know how to obtain the expertise that they currently don't have, or sub-contract/delegate tasks to others due to time constraints.

It helps if you are a good negotiator, in order to gain business with clients, and to sub-contract some of the work to programmers and other consultants. There are pitfalls to involving other consultants though, as (obviously) you don't want to lose the business to a potential rival. The boundaries of any deal with clients and others who may be able to assist you in your work would need to be clearly defined at the outset.

Interpersonal skills and technical qualifications also come into play. However, knowledge of the business of I.T. consultancy is just as (if not more than) important than pieces of paper. The bottom line with I.T. consultancy is that you are providing "value for money", just as is the case with any other consultancy.

In this case value for money can mean a number of things:

• Increasing your clients profits
• Reducing expenses
• Boosting efficiency
• Increasing employee retention
• Solving communication problems
• Persuading employees who are resistant to change
• Reducing operational risk

This can be summed up in one word, "Credibility". To have credibility you will need, all or at least some, of the following factors. In order of importance these are:

1. Previous achievements., including case histories and testimonials.

2. Professional referees.

3. Skills you can demonstrate e.g. oracle programming or database design experience.

4. On the job training or experience.

5. Awards.

6. Certificates and licences.

7. Higher education.

It may be that you are just starting out from college and therefore you will not have all of these skills. However, if you are confident of your ability whereby you know more than your potential clients on a particular topic, and you can find enough of these types of client, you could always build up your reputation on a part time basis or start out with what you know. It may be that you can gain some experience in other I.T. jobs first, which is a topic we discuss later on in this introduction.

N.B. The danger in I.T. consultancy is claiming you know more than you do about a particular subject. This is fatal as you would very quickly be found out in the real world!

Numerous I.T. consultants started out as contract programmers or business analysts, and added consultancy to their roles. Therefore it does help if you have "expert" knowledge of a subject.

Do you have the x-factor in I.T. consultancy terms?

On a totally unrelated subject, if you have ever watched the "X" factor on television. This is a talent show to find the latest musical talent. How many singers have you seen on the "X" factor who think they are wonderful singers, just to find out at audition time they were not good enough. This is similar to being a consultant in I.T. You will be judged on your results and deliveries, not on your claims.

However, this is not intended to intimidate you, only to warn of the dangers. You will know what you can deliver, you will know the levels of experience and knowledge you can offer, and only you will know your target audience, although we try to assist you with this aspect in the rest of the course. If you have motivation to learn and develop, then it is possible you will become an excellent consultant without necessarily having all the required skills at the outset. What we mention about expertise here is an "ideal", but "honesty", with your prospective clients, colleagues and sub-contractors is a must if you are to succeed.

Other attributes which are essential are: confidence (not arrogance), empathy (putting yourself in your clients shoes), adaptibility/flexibility, focus and commitment. You need a positive attitude which is realistic in terms of your own objectives and those of your clients.

What are the advantages and disadvantages of I.T. consultancy?

We briefly discussed some of the advantages of I.T. consultancy in the overview. The idea of working for yourself, choosing where and how much you will get paid and being your own boss are all very appealing.

Once you become established you will be able to decide the types of client you would wish to work for, and the type of work you will undertake. All this helps to make your work more interesting. For example, what was formerly a hobby area of I.T. could become an area you now choose to work in.

Still more benefits involve the fact that you will be making a direct impact on people's lives and their businesses. This will help to give a great sense of achievement. There is also the potential to grow your business and have other people work for you and sub-contract skills you do not possess therefore providing a wider service. Although it's not an essential advantage it is possible that some of your clients could become friends in personal terms and if you don't mind being popular this can all help to boost your confidence!

If you're passionate about your work however, you will look forward to the alarm bell ringing in the morning instead of dreading it!

When we look at the disadvantages of I.T. consultancy we can see that not everyone is cut out for this line of work. As mentioned I.T. consultancy is not for the faint hearted, or for those particularly sensitive to criticism. When things go wrong very often the I.T. consultant will be held responsible, even if the problem was not a direct result of the service. It calls for a special set of skills that not everyone has. Some people are better being I.T. employees rather than consultants.

Some people make better programmers or analysts rather than consultants due to their makeup. For example, a highly skilled programmer may be very productive when producing and designing code, but may not be very good at presenting I.T. concepts to none-I.T. people. This does not mean that such a person is not excellent at what they do on a day-to-day basis.

Even if you are potentially a very good consultant it helps if you're passionate about what you do. Consultancy is hard work. It isn't just about fulfilling contracts and hopefully earning lots of money (which, in any case is not guaranteed)..At least a third of your time will be spent marketing for new prospects, especially at the beginning of your venture.You will also be responsible for your own accounting, book-keeping, and generally running of the business, in addition to performing the day-to-day consultancy work. It acquires a great deal of other skills that are not just about the consultancy work.

As previously discussed, it is not essential that you are an expert in every I.T. subject you should at least have specialist knowledge of a few topics you can use in your own niche market. This can be a disadvantage if your skill set is relatively small. It is not advised to enter into consultancy on the basis of your specialist skills in one area, unless you can find a suitable market. It is better to be a good all-rounder in I.T. on both a business and technical level if possible, but this is not essential. With experience your skills will naturally improve.

Another disadvantage at the commencement of your business will be that your initial cash-flow will be very low or non-existent as you seek out your first customers.

One of the obvious disadvantages of working for yourself in any business is that you no longer have that (in theory) secure job where you are guaranteed to be paid every month. It is usually more comfortable to have a guaranteed salary being paid into your bank account every month than it is to rely on cheques, cash or electronic payments over the Internet. When you are self employed your payments have unpredictable payment dates. For this reason it is essential that ideally you have a few months salary in the bank to support yourself, especially in the initial stages of your business. However, once your business is established this should not be too much of a problem.

Another disadvantage (but could be an advantage, if you are cunning) is that you have to be able to make the best of the economy as it stands at any moment. It is easier to generate business when the economy is sound but not so good when there are company cut-backs and redundancies. It is unlikely that some companies will be unlikely to take on highly paid consultants when they cannot afford to keep existing staff.

The way to make the best of the situation when the economy is not so sound is in your ability in being able to make companies more efficient, and thus hopefully preventing redundancies, and helping companies to survive a turbulent patch.. In some cases though, you may have to recommend cutbacks. Therefore this can make you a hero or a villain depending on the objectives you have set out. Hence, another reason for being thick skinned!

In summary then, here are briefly the advantages and disadvantages of becoming an I.T. Consultant:

Advantages

• You are your own boss
• Being in a position to choose the types of client you wish to work for
• Being in a position to decide how much you will be paid
• Decide where you will work
• Only take on the type of work you are happy with. This could be an area of I.T. you are passionate about.
• You will feel a sense of achievement
• You should enjoy your work, and look forward to the morning alarm for instead of dreading it!

Disadvantages

• Not for the faint hearted, and it helps to be thick skinned!
• You will probably need to work harder than you have ever done before, as you will not just be a consultant, but your own sales person, book-keeper, and administrative clerk in the early stages
• Some people are not cut out for I.T. consultancy. Just because you are a brilliant programmer it does not mean that you can be a brilliant consultant. Consultancy calls for a mix of all round I.T. skills and business acumen.
• The more I.T. skills you posses, the wider the range of services you will be able to offer, unless you have a niche market and a sound customer base.
• You will no longer be in that secure job, unless, initially you work alongside your main job as you build up your business
• You will need to be business-savvy when the economy is not so good, in order to continue obtaining work

What are your lifestyle and earning goals?

The goals you set for your consultancy must be realistic. Set goals that you know you can achieve. However, you should allow for your goals to have an element of challenge to enable you to grow. Setting goals you know you can easily achieve to some extent will limit potential in learning new I.T. skills.

At the end of the day, it's down to you as an individual what your objectives will be, based upon your skills your motivations and your potential client base.

It helps in the early stages if you have friends and potential clients who you know will be interested in yor services. The I.T. skills matrix we looked at earlier should enable you to decide which skillsets you are going to market, and the skills you wish to add to your portfolio.

It is always best to start small, even if your ultimate aim is to make your business into a "big fish". By starting small you will learn about how bigger consultancies operate, and understand the pitfalls before you venture in "too deep" at the outset.

When setting your goals, have a short, medium and long term plan. The range of periods for these is up to you. In this case we have chosen the next month, the next 6 months, and from 6 months to the next 3 years.

In terms of I.T. consultancy, this should take the form of a plan. By fulfilling the steps in the plan, you can see where you are going and achieve your ultimate objectives.

E.G. A typical section of an I.T. consultant plan might look like:

Short term: Next Month:

• Phone 100 prospective new clients
• Commence work on the User Guide for the new accounts system for Prezzy Ltd
• Complete the unix scripts to safely shutdown the solaris server
• Deliver 1 day training course on Microsoft Office Word at Jackson Ltd
• Resolve the "file locking" problem at Integration Corp (2 days estimated)
• Continue current contract at Technologize Ltd

Medium term: 6 Months:

• Negotiate new contracts at Jackson Limited
• Complete payroll system design and recommendations for Hull Hospital
• Fixed term contract at Sudoku Ltd (3 months). Design Entity relationship model and build database in conjunction with their I.T. staff.
• Negotiate with contract programmers to fulfill ongoing contract work (B.T.).
• Take on 10 new contract agreements with new prospects
• Learn perl programming skills, to add to portfolio
• Set up website to market services

Long term: 7 Months to 3 Years:

• Look at gaining Microsoft certification
• Complete payroll system design and recommendations for Hull Hospital
• Look at employing programmer to fulfill some of the longer term programming contracts
• Need secretary!
• Compete for the B.T. contract. Tenders deadline by end December, 2008.
• Learn Java, take Software Configuration Management course, and arrange to take Project Management certification
• Find new office premises in the next 18 months
• Go on that American holiday and buy a new car, as a reward for establishing your business, and having at least 4 employees in 3 years time!

Pricing

Where pricing is concerned you will need to do some research. You will need to find out what other I.T. consultants are charging. If you decide to undercut the competition, you may find that you are working long hours for very little reward. It is always best to aim for the middle ground. For example, if the range of hourly rates is £20.00 to £40.00 per hour for specialist skills, such as designing a database, you should aim for the middle ground, say £30.00 per hour. If you do decide to charge more than average you should always be in a position to justify this to your potential clients if they challenge you on your costs. To some extent this will rely on your own confidence in the services you are offering.

Partnerships

You may also be considering working in a partnership. This is fine as long as it is clearly specified and understood what the roles of each individual partner is. Some partnerships start on the basis of a friendship. However, these kinds of partnerships are prone to break-ups, sometimes due to the different approaches to performing tasks.

Partnering with another consultant is fine, but it is always recommended that you work with someone you know well, and can work with on a regular basis. Once again, you should clearly define the roles of each consultant, so that the "professional rivalry" which sometimes happens will not surface. Partners should work towards the common goal and end result, not be in competition with each other. Sometimes it is better to work in a partnership as you learn skills from each other.

How do you gain experience prior to I.T. consultancy?

As a general rule, the decision to become an I.T. Consultant is based upon several years experience in industry. However, even those with limited experience may have specialist skills and knowledge which would be useful in consultancy work.

In the past you may have gained experienced as a programmer or as a helpdesk analyst. It may be that you have worked for several companies gaining different perspectives in industry which could be in the private and/or the public sector. If you see yourself as an aspiring I.T. consultant but you are not ready to make the big leap yet it is recommended that is you try and gain some experience in the working with consultants, programmers and/or business I.T. specialists. Another way to gain experience of providing advise and support to others in I.T. is to work on a helpdesk. If you are still at college it would be a good idea to gain experience on a work placement. Seeing how other consultants in I.T. work will give you some idea as to what is involved. Unlike programmers and Web designers consultants usually have a better understanding of the overall objective i.e. the bigger picture and where I.T. fits in with the business.

A very useful way of gaining free knowledge and expertise is to join online forums and newsgroups where other professionals can assist you with I.T. problems. You can also gain insights into approaches that other I.T. professionals use. There are many such newsgroups available and if you wish you can also pay a small fee to join web sites which provide expertise on various I.T. matters. There are many websites offering expertise in I.T. matters. If you have a problem you wouldn't normally be able to resolve and do you know where to look on the Internet finding a solution isn't usually too difficult.

Another useful strategy is to study courses and take certification in aspects of I.T. consultancy which are used in the real world. It may be that your employer will sponsor you on courses which will take you down the consultancy route. Most learning schemes have several compulsory modules and optional modules which combine to provide certification.

Certification on its own will not provide you with experience but it should open doors to provide you with more opportunities to gain some. Examples of the types of courses you may take in I.T. consultancy are, project management, software engineering, programming languages, database design, business studies, service management.

Reminder

Have you completed the following exercises?

• Completed the I.T.consultants challenge quiz
• Completed the I.T.consultants skills matrix, and tailored it for your own reference.
• Looked up various newsgroups, and websites as recommended in this introduction

Tick each box when you have completed the exercises. Then you can move on to the assignment that follows.

Summary

1. In this introduction we have looked at the advantages and disadvantages of it in consultancy, your lifestyle and earning goals and the various factors that go into freelance work. We have also looked at how you can gain experience prior to becoming an I.T. consultant.
2. We have looked at who your prospective clients are, what kind of skills and knowledge you will need your motivations for going down this route and how you are going to go about it
3. In either to clarify your skills and knowledge you took part in an I.T. consultants challenge and filled in a skills matrix for you to keep updated. This enables you to identify at any time, the skills and knowledge, you can offer as an I.T. consultants and identify areas were, you can improve your knowledge.
4. We also looked at identifying your target market, and what you will need to initially approach this career
5. We also took account of various risks of I.T. consultancy, and the type of qualities required to survive in a competitive career.
6. Finally, we looked at planning your consultancy, and your goals for this in terms of short medium and long-term plans. We provided an example of a typical diary/plan for an I.T. consultant.

• Hiring Relatives

  Consultants, reading this, grab for the Pepto. The idea that "family" won't steal from you has been disproven so often the obverse is true... Family Will Steal From You. Further, you won't lock up Family. Secondly, other employees are put on the backfoot. They could complain to the "boss" about the Office Manager playing dominoes all day, or being rude and unreasonable. But they can't complain to the Aunt of the offensive employee. This means employees will quit, will unwork, will harbor resentment, and the business will suffer. If you have to hire a family member, give them very narrow responsibility and prevent their need to interact with staff.

• Overruling a Manager

  Fire a manager if s/he isn't performing. Never leave a manager in place if a decision has been made which you disagree with. If a manager fires someone and you decide to reinstate that person, by undercutting the authority of the manager you have now given him or her an all expense paid vacation in your office. The manager will never attempt to interfere in the behaviour of the employees. S/he will hide in the office, the workers will do what they please. If the manager is not to manage, make sure this is built in the Terms of Reference. All hiring and firing is done by committee, or you, or a board, and the only authority the manager has is to "report" the employee. If a manager reports an employee and the decision is to keep that person, explain why to the manager. If not, you are in the position of overruling a manager, which means, there is no manager.

• Changing Systems That Work

  Before you change anything; from a schedule to equipment, examine efficiency. Just because what you are doing or using doesn't conform to whatever you are being sold, doesn't mean change is necessary. Nothing that is working is obsolete. Only where you are losing efficiency do you think of change. Many systems need so much tweaking to do what you want them to do that unless you can do the tweaking yourself, you've invested in inefficiency.

• Sacrifice Freedom for Security

  Many businesses become so worried that a customer might steal they enact systems which make customers cease their custom. Most people are not thieves and do not like to be treated as potential felons. Customers need to try on clothing, need to see the color in sunlight, or compare different garments. Many want to physically examine an item before purchase. If there is a problem with any of these activities; i.e. not allowing customers to try on clothing, preventing access to natural light or preventing a customer from examining a possible purchase, they will simply walk out without buying a thing. You can deal with the entrance and exit points while leaving the shopping area virtually free.

Sales clerks are not police officers, let them offer to help in a friendly manner, and if dismissed, do not stand on the shoulder of a shopper. Some women are very sensitive about their weight. They don't want you to see them take a size twenty two. Some may not want you to be watching the cup size. Teach your clerks to watch unobtrusively, and always be alert to assist. If you can avoid these four errors, you have laid the foundation for a successful business.

The advantage of becoming a consultant by joining an established firm is that you get benefits and less risk. The downside is that you are still working for someone else and not making the maximum dollars for your time. However, you may actually make more when you factor in the benefit package and very little time without work.

Working for a consulting firm will give you a wider range of experience in your field. You will be moved from place to place. Every company does the same job in a different way and with different equipment. Each assignment prepares you for bigger and better things. It also makes you more efficient at your core responsibilities. As you get more experienced, your value to the company goes up.

This will prepare you for either a better consultant job or to make the step to be an independent consultant. During this period, build a contact list. If you have signed a no-compete contract, this can be a little difficult. The trick is to find those people who are not using consultants now that may be able to be tapped for work later.

If you decide to stay with the current firm, you can always funnel these into their client mix. Most of the time, companies are just concerned that you do not raid their current customer base. Once you have established a list of fifty or so real prospects, try to land some clients for work on the side.

When you reach enough business to require more than twenty hours per week to service, you will have acquired a sufficient number of clients to step out on your own. It is important that you are charging enough to cover your new overhead. Things like professional insurance, workman's compensation, self-employment insurance to the government, and other business expenses must be included in your hourly rate.

If you were being paid $30 per hour by your employer, you will need at least $75 per hour on your own. Even amounts above $100 per hour are not unreasonable. You need to charge enough to cover your time on the job and your time between jobs. If you can find out what others are charging, it will help you set a rate.

A good rule of thumb for you would be to charge about 20% less than the established competition. If you do not do this, you will have trouble getting work. You can raise the rate when customers start to call you.

Two final thoughts that are important to consider. Take a hard look at your sales ability and work ethic. If you cannot sell things, you will not sell yourself. You have to be able to make the calls and persuade companies to use you instead of the competition. If you have a tendency to like to play games and hang out with friends in place of going to work, self-employment is not for you.

The second thought concerns your financial position. If you do not have enough resources to ride out the early problems of keeping enough work, you need to keep the independent consulting as a sideline. You need to have at least enough money put back to cover six months worth of expenses. If you are good enough that your work never slacks, you will just build a bigger estate. Most people find that it takes more than a year to stabilize a new business. Having a nest egg to rest on will make the difference between success and failure.

At this restaurant are eight waitresses. There is no custom to justify eight. Four would be useful at certain times, where at others, two could adequately handle the work. The eight sit around and talk and argue, and patrons, seeing this, leave. As each one of the waitresses has to be fed, those are eight meals the chef has to make. And there is only one chef.

At this accountancy firm there is a "chain of command" in which a worker reports to a Senior Worker who reports to a Supervisor who reports to...  All of these "staff" positions; what is the purpose? People are hired to perform work. They must know what work they are there to perform. An office manager can route work and whether it is a law firm or a data entry center, one manager can be kept occupied.

I have sat in on meetings which argued over the protocols of who complains to whom, and how the "chain of command" was breached or not breached. What is being produced during these meetings? When workers are not fully employed, they fill their time with their social life. They spend hours on the phone, playing games on the computer, doing what they please. This idleness produces unworking habits which, at busy times will be extremely detrimental. When downsizing; start at the top. Assistant managers who act as megaphones can be replaced by megaphones. Everyone must have an actual job.

When you reach the floor keep your eyes open for telephone talkers, walkers, socializer. Don't be fooled by industrious appearing people; often they are playing games on the computer. Do not attempt downsizing until you are so familiar with the business that you could manage it. You must know every single department, what each person does. Sometimes, streamlining an area solves problems. The mindset when you enter is that each worker has to justify employment.

To protect yourself and your business, choose wisely. When considering a consultant ask him or her what they intend to do. You want a response as simple and clear as possible.

You are listening to hear for something like; "I intend to walk through all aspects of your business as a client," or "I intend to join your work force as an employee".

You don't want to hear the long words and complicated concepts some recent graduates throw around to make their job seem so very technical.

I recall once telling a C.E.O. I intended to watch telephone usage and he became livid. "That's all?" "No, but it's a start."

He considered me a complete duffer and hired a firm which cost him an arm a leg and his favorite kidney which basically notated telephone usage to see which employees spent most of the day on the phone not working.

Of course, they made other recommendations, as I would of, but when it comes to an immediate need to downsize yesterday, this is one of the knee jerk responses.

In one "clean-up" situation I came in to find that another consultant had seen the computers running a Legacy system, instantly settled that this was the problem, and had the company purchase a dozen new computers running the latest Gatesware.

The business came to a dead stop as twenty years of work which was saved under the encryption of the Legacy, could not be read by any other system.

The old computers had run the Legacy with memory to spare, but couldn't have run Windows '98. Of course, if one doesn't use memory gobbling software, one does not need a great deal of memory.

This business ceased to function until I located the one person who had this Legacy system and could reinstall it.

What boggled the mind was how any one calling him or herself a consultant could look at the physical machines and not at the program it was running or the work it was producing.

This is the key feature; it's not the color of the walls, it is the material that makes up the walls. A good consultant can see the plyboard or the concrete, a pedestrian one, that the wall needs painting.

Before you hire consultants, make sure they know what they are doing, can explain it to you in simple language and are prepared to walk through your business, from top to bottom to ensure that the advice they are giving is tailored to your company, not paragraph 876 from a text book.

The employer assumed she used these supplies, after all, she was very busy and didn't have time to look over every single purchase, that was done by one of the secretaries.

It doesn't take much analysis to understand the secretary, realizing her boss oblivious to the expenditures, did what she pleased.

On investigation, I learned everyone in that outer office from the other secretary, to the messenger, to the driver, was getting a weekly "top up" of their salaries.

There is no sense in being so busy you become an easy target for this kind of scam.

Imagine sitting up all night with a brief or presentation or new campaign, and the payment you have worked for going into the pockets of staff you already pay. You may begin to appreciate that being so "busy" is costing you.

Further, once your staff practices this kind of scam, it means they have lost respect for you. When your employees do not respect you, there is no further insult that can be paid.

You can rest assured any private or personal business your staff is aware of is made public knowledge, and any error you may make will be blown out of proportion.

It is not so much the dollars they steal from you, it is the 'sense'.

Begin to consider; do you really go through one hundred and twenty five pieces of paper a week? That is the only reason you would need to order a ream every month.

Twenty CDs? How much data are you collecting?

A dozen pens? Are you giving them away as gifts?

Where are your supplies? When was the last time you looked?

Another clever practice is for an employee to talk a boss into buying a large number of items at one time. This makes stealing so much easier.

Buying a dozen toner cartridges in January, going back for another dozen in April will often be accepted.

That eleven cartridges are hidden behind the file cabinet, and will, as soon as the money is dispensed, appear on the shelf, would only be caught by an employer who is not too 'busy' to find out exactly how long a cartridge should last.

Depending on how big your business is, you may lose hundreds, thousands, millions of dollars via this kind of scam.

If you really are too busy to make yourself aware of what is going on in your outer office, consider hiring a consultant who can monitor what is going on.

This consultant should be hired on a temporary basis, and given some excuse such as doing a Masters in Office Management, or helping with a category of work.

Do not hire any full time assistant to prevent adding another hand to the division of spoils.

Remember, once your staff ceases to respect you, it is time to get a new staff.

It wasn't just "free" Internet, traffic was so bad that it was no sense in getting into it. I also learned that many of the employees would leave their homes before six, arrive at seven, and amuse themselves until eight thirty when they punched in.

If this didn't scream for flexitime, I don't know what does. Breaking the workers into a seven to three and an eleven to seven shift seemed obvious.

Interestingly, the C.E.O. had no idea what time his workers were actually arriving or leaving. That they were putting in a virtual twelve hour day for eight hours work was a bit much, and he quickly set about implementing a new schedule.

I suggested he make it voluntary and see what the workers chose. Where there was a problem the standard could remain, where there was not, let the workers have their off time.

The reason I would discern what he did not, is because fresh eyes of an outsider are often the most efficacious method in examining a business.

This is why one hires an outside consultant.

Consulting can be an exciting and profitable business, can enable you to pick the type of employment that most interests you. You can also work full or part-time. You set your own hours. You are your own boss. Consulting is also a low start-up investment business.

Of course, as with any business there is no guarantee of income or clients, nevertheless, if you have expert information and are a self-starter, then this is quite possibly your type of business. If you are a retired person seeking some type of part-time employment, consulting is ideal.

The American Heritage Dictionary defines to consult as "to seek advice or information of." A consultant, then is a person who gives expert advice as a profession. If you're looking for freedom, independence, and creativity in the work that you do, then you can built your profession around consulting.

You can consult by writing articles, booklets, and ebooklets, you can consult via email or telephone and/or you can consult in person. To consult in person you must have excellent communications and people skills, have enthusiasm, and the ability to sell or market yourself and your consulting services.

Almost every person reading this article has an area in which they can offer their consultation services and their expertise. People want to improve themselves in all kinds of areas. Hence the popularity of "how to" and "information" books, booklets, ebooks, and ebooklets. These are generally the top-selling books. How to and informational articles are also popular.

You can offer your consulting services to individuals, groups, and companies. You can even consult on how to set up a consulting company.

Let's say you're a business professional. What are the areas of your knowledge? Start-up companies, fundraising, financing, business management, market analysis, advertising, import/export, etc. Then you can consult in these areas.

A freelance writer can consult on writing projects. A housewife might consult on refinishing bathrooms or organizing household finances, a gardener might consult on almost any gardening project, including container gardening or landscaping. If you're an excellent reader, you can consult on literacy or teaching literacy.

Your type of consulting company depends upon your knowledge and your personality type. To have your own business you must know how to work according to a schedule and be self-motivated. Your personality type determines whether you consult via writing, mail or email, telephone, or in person. In addition your client must be amenable to your type of consultation. For example, if your client only wants in person consultation and you consult via telephone only, then this is not your client.

As a consultant, your demeanor must always be professional and your consultant service must be run and managed as a business, whether home-based or office-based.

Guidelines on selecting a consultant field

Write down the area(s) in which you have expert knowledge, and/or you have ready access to expert knowledge and information. These should also be areas in which you are interested in consulting with clients either in writing, via email, mail, telephone, and/or in person.

For possible consulting areas look through the yellow pages, classified ads, and consultant's directories. These suggest areas in which you yourself can specialize.

In general, make a list of the things that people want to know. For example--how to save money? how to spend money? how to make money? how to invest? how to garden? how to read? how to cook? how to clean house more efficiently? what are the most nutritious foods? how to order wine at a gourmet restaurant? how to buy antiques? how to write how to books? Do you have expertise in any of these areas?

Go to Amazon.com . Make a list of how-to books. Do you have expertise in any of these areas. Include these books in your consultant's library.

Ways of getting clients

Advertise advertise advertise. In addition, you need to have testimonials from satisfied clients. Consider writing a series of articles and/or self-publish a book on your area(s) of expertise. These articles, books or booklets can be sold and/or distributed free to potential clients.

Low-cost advertising includes press releases, classified ads, brochures, postcards, etc.

For information on financing, bookkeeping, licensing, supplies and equipment there are many small business books that provide useful information for every type of small business including consulting. These books are available from Amazon.com or your local bookseller. In addition there are many books on computer consulting, business consulting, investment consulting, travel consulting, franchise consulting, home-improvement consulting, self-improvement consulting, career and job consulting, advertising and marketing consulting, and consulting opportunities in general. You can also find many free guides on consulting and free articles online.

Being a consultant is not simply knowing but you must have the ability to do research to find out what you don't know, including interviewing other experts.

Fees

You can charge by the hour or per day. For example a consultant might charge $20-$100 per hour or up to $500 per day. If you consult in writing, then the consultation fee is the cost of the book or ebook. If you write articles as information resources, then these articles can be the basis of your consultation and can be easily revised as books, booklets, ebooks, or ebooklets and self-published at Lulu Press or Xlibris .

SAP has designed an R/3 application module for business functionality in every business area in a company. R/3 application modules are integrated. So when a change is made to one application module, R/3 automatically updates the corresponding data in the other application modules. The automatic update of information in R/3 occurs as soon as data is entered into the system. This is referred to as “real-time” processing.

The application modules are integrated into a work flow business events and processes across department and financial areas. Any business that wants to fully integrate its business processes must use on source for customer, product, and supplier data. R/3 allows for this by providing a set of master records for the enterprise. This means that an entire company can share the same customer or material information that is entered in the R/3 master records.

The integration of application modules in real-time allows all the employees in your company to see the most up-to-date information in real-time at their desktops. It also reduces data redundancy. Globalization is one of the biggest challenges facing any organization seeking to integrate its business processes. A business system must be capable of supporting all of an organization's offices, across the globe. The R/3 system has no organizational or geographical boundaries. It is designed for international use and supports multiple languages, currencies, and taxation systems.

To examine what application modules do and how they connect to each other in more detail, let's take a look at the following application modules:

• Sales and Distribution (SD)
• Materials Management (MM)
• Financial Accounting (FI)
• Production Planning (PP)

Let's say a customer has ordered 100 motors from your company XYZ. You use the Sales and Distribution (SD) application module to enter the customer's request for the motors into R/3. This is done by creating a sales order. Once a sales order has been created, the Sales and Distribution module generates a delivery document, which contains information needed to ship the motors.

For example, the delivery document informs warehouse managers which motors to collect from stock. Once the motors have been shipped, an invoice is created to bill the customer. Materials Management (MM) application module is now used for procurement and inventory management. Elements of this application module include:

• Invoice verification
• Material valuation
• Vendor evaluation

The Financial Accounting (FI) application module manages and reports on sub ledger accounts using a chart of accounts that is defined by your company. Examples of these sub ledger accounts include:

• The General Ledger
• Accounts Receivable
• Accounts Payable

The Production Planning (PP) module is used to plan and control the manufacturing activities of a company. Some of the elements of the Production Planning module are:

• Bills of materials
• Sales and operations planning
• Material requirements planning
• Production orders

Let's look at R/3 integration by examining how the Sales and Distribution application module integrates with other application modules when you create a sales order.

• When a sales order is created, integration occurs between the Sales and Distribution module and the Financial Accounting modules. This is because R/3 checks the customer's credit limit, which is stored in Financial Accounting. Another reason is that the creation of the sales order updates your company's cash forecast, which is also stored in the Financial accounting module.
• When you create a sales order, Sales and Distribution integrates with the Materials Management module. This is to verify that the ordered material will be available on the requested delivery date.
• Sales and Distribution integrates with the Production Planning module when materials entered on sales orders use a planning strategy, such as make-to-order. When this happens, R/3 automatically creates a production order in the Production Planning module.

Application modules share a common user interface and architecture. They are also navigated in the same way. So in addition to being integrated technically, they have an integrated look and feel.

Other R/3 application modules include:

• Controlling (CO)
• Fixed Asset Management (AM)
• Project System (PS)
• Work flow (WF)
• Industry Solutions (IS)
• Human Resources (HR)
• Plant Maintenance (PM)
• Quality Management (QM)
• Enterprise Controlling (EC)
• Investment Management (IM)
• Treasury (TR)
• Service Management (SM)

When R/3 is first installed, each application module will need to be customized to suit a company's business needs. The groups of employees from a company who implement and configure R/3 are commonly called the project team or the implementation team. Sometimes companies implement a core group of R/3 application modules, and then add additional modules or functionality over time.

Project teams can customize R/3 tables, reports, and interfaces. R/3 project teams configure the application modules to increase the efficiency of a company's business processes. R/3 can process and generate information in several ways.

Batch input is R/3's standard method for entering a large number of records from legacy systems or routine interfaces. The R/3 business work flow links company-specific work processes to the business processes of R/3. The business work flow processing capability is a way an R/3 event can trigger one or a number of other events. Work flow applications control the flow of information and documents from one work center to another.

Let's see how the business work flow applies to handling a customer order. When a user is processing a sales order for a customer who has exceeded their credit limit, a supervisor might need to approve the acceptance of the order. As a result of R/3's business work flow, a message is then sent to the supervisor's inbox. The message informs the supervisor that a sales order is waiting for credit approval (Each user on R/3 has an inbox that is part of the R/3 mail system. This mail system handles internal and external mail, system notifications, and work flow items).

R/3 records business transactions and activities by creating documents for them. This is called the document principle. R/3 uses the document principle to record information for the business activities your company carries out.

A key feature of successful business integration is that information should be entered only once. R/3 facilitates this requirement by rolling information down the business process. Rolling information means that the system copies or transfers data from one document into another, thereby reducing data entry and making problem resolution easier. For example, during the customer order management process, information in the sales order, such as the customer name, materials or services requested, and so on, is copied into the delivery document. And all the information from the sales and delivery document is copied into the invoice.

The management of a company needs to be able to retrace the steps of a business process in order to see what caused a situation. They can do this because all R/3 documents are linked and because R/3 has drill-down capability. Using drill-down capability, one can establish the document numbers of all documents connected to a sales order.

The chain of documents in R/3 is called the document flow. The document flow provides the history and status of related documents in R/3. The output processing capability allows to exchange information between a company's business partners and employees. One way you can use the output processing capability is to send confirmation of an order to a customer. Another way you can use it is to bill a customer for a delivery.

R/3 provides several ways to send and receive information. R/3 provides several ways to send and receive information. These include:

• Print
• Fax
• E-mail
• EDI (EDI is the acronym for Electronic Data Interchange. It is a standard for the transfer of data between companies using networks such as the Internet).

The information that is sent to business partners using R/3 defaults from the electronic documents contained in the R/3 system. For example, much of the information entered on the sales and delivery document is transferred to the invoice.

The conditions processing capability allows a company to decide how R/3 will calculate the values of company-specific data or process a document in the system. Conditions are used to determine prices, discounts, surcharges, requisition release strategies, and work flow output.

Let's say your company manufactures engines and has created a condition to price them. Suppose a customer would like to order engines from your company and that you must create the sales order. Because a condition has been created to price engines, the price of the engines will default into the sales order. This saves you from having to enter a price manually.

The reporting tools in R/3 are flexible and meet internal and external reporting requirements. Reporting tools are useful for analyzing your company's performance so you can develop future business plans. R/3 includes two types of reporting - Standard reporting and Information Systems reporting. Standard reporting allows users to view transaction level data in each R/3 application. Information Systems reporting allows users to view summary-level statistical data from R/3 applications and external applications. This means a single report can display information from different application modules.

One can import data or export R/3 reports to external systems. One can import or export reporting data to and from Microsoft Access, Microsoft Word, Microsoft Excel, and many other applications. One can run reports for the whole of your company or for sections of it. It is possible to create a report for a section of your company by specifying which organizational unit you want to report on. Organizational units identify the hierarchical structure of an organization.

Let's say your company has divisions in the USA, Canada, and the United Kingdom. Each division forms an organizational unit called a "company". A company is an SAP term for an independent legal entity. A company can be further defined into smaller organizational units, such as plants and purchasing organizations.

R/3 provides a number of standard reports. However, one can also define your own reports to display information in a way that suits your company's needs. The archiving capability allows you to transfer information from R/3 onto storage media. To do this, one can use the ArchiveLink application. ArchiveLink is a communications interface between the R/3 system and an optical archive system. This allows you to store R/3 documents on optical disks that can't be overwritten.