Overpriced IT consultancies
The other side of the coin
So, last week I tackled the problem of Melbourne Transport as an example of how a lot of government departments take the easy way out of labyrinthine structures that have been patched, broken and re-patched over time. That’s not to say that only government departments face this. I’ve been confronted plenty times by private companies who, instead of using an opportunity to streamline their business, just push it to “the software” to implement.
But, of course, I’m not letting the software companies off the hook either. Going back to Friday’s example, the myki system is “almost three years late and $350 million over budget.”
There aren’t too many industries where you actually get paid MORE if you screw up. Consider a project. You bid for it at, say, $100million for one year’s work. You do the work, you get paid. That’s it, end of story.
BUT….
Consider a project. You bid for it. In the second month, the business decides they need Additional Features A, B and C. You say okay, for an additional $20 million. But, at the end of the year, not only aren’t Features A, B and C in the new system ready, but the new system itself — the core functionality — isn’t ready either. “It’s all your fault,” the software consultancy firm/company tells the customer. “If you didn’t want to shove in extra work (aka “scope creep”), this wouldn’t have happened.”
Now, the company has two choices. It can either tell Software Consulting Company to take a hike … with $120 million down the tube. Or it can grit its teeth and just tell Software Consulting Company to get on with it. And, three years and $350 million later, you still get a half-wonky system.
It’s also a problem of size. There are some very big consultancy companies out there. Are *you* going to tell them to piss off? No. And they know it. So it can actually pay for them to be as inefficient as possible as a way of gouging more money out of the customer. I do believe that’s where all these expensive consultancy “partners” show their true skill — not in technical stuff, but in knowing just how far they can push the customer, how much schmoozing they can do, how many honeyed lies they can tell, so they can squeeze more and more money out of a “fixed-price” contract right up until the moment when it’s about to go sour and — at that point — they deliver The System. Everybody breathes a sigh of relief, the press releases get announced, and the consultancy firm moves into the Maintenance phase of the project to “fix” all the problems they didn’t plan and design properly in the first place (billed on a time & materials’ basis, natch!).
Nice work if you can get it, and about a dozen companies worldwide have it completely sewn up, baby.



