The Measureable value of maintaining B2B relationships

Most of my posts are tech related.  This one is too, but more importantly it is both personal and business related.

I’ve worked now at many customers sites over the past 12 years.  Some of those have been in Asia, Australia, Europe – but most were right here in the United States.

Some of those gigs have been short term with limited engagements.  This is fine if the scope of the project is very well defined and measurable – like completing an install of a specific product suite on a platform or another “known” quantity of work.

But what happens when the quantity of work is unknown and/or continues (even sporadically) for years?  Is the customer better off re-bidding the project each time to the lowest bidder or the person who fits the award criteria closest?  I would say no.  Let me make a short case study of why.

The Short-term value of the Consultant to the Customer

If you are a professional consultant your short term value to a customer is to get the job done.  The problem with this is that “The Job” does not exist in a vacuum.  Every customer organization is different.  When you come in you have to learn the culture.  You have to learn the regulatory processes.  You have to learn the working relationships within the company that make everything work.  Something as simple as installing software can turn into a long list of requirements no one thought of up front.  And since each organizations infrastructure is unique the lessons learned are best remembered.  When “The Job” is done you now have intangible equity that can be capitalized on by the customer.

The Long-term value of the Consultant to the Customer

Case in point: Two years ago we did a very difficult installation of BMC/Remedy products in a certain customer environment.  This was a Solaris non-root install of the ITSM product suite and we ran into many problems.  Most of these were tied to permissions on Solaris, the non-root installs, and the fact that we were running multiple instances of the server on each box.  We were not doing anything special – we were just installing

• BMC Remedy ARS 7.1
• BMC Remedy Atrium CMDB 2.1
• BMC Remedy Incident Management 7.03 (and related necessary items – Assignment Engine, etc)
• BMC Remedy Service Level Management 7.1

The total install time for this project was over 3 months for 4 servers.  THREE MONTHS!  On a simple Windows platform this is an install that can take as little as a day.  I’d say I was embarrassed but we had BMC engineers (not tech support – actual engineers) helping us and they were mystified too.  During the course of that period of time we registered a large number of bugs that were unique to our situation.  Server process kept dying, core dumps kept happening, etc. etc.

Fast forward two years.  The same customer has another division that is going to upgrade to this same software.  I was once again involved as the only outside consultant.  We ran into literally all of the same problems previously.  However, our prior knowledge solved the problems in very short order.  One issue that had hung us up for 3 weeks was literally resolved in 10 minutes.

To be conservative we saved 14 weeks – that’s 70 days, or 560 hours.  A standard rate for a consultant in this role is $125/hr – so figure this saved $70,000 over bringing in another outside resource.

Sure, that person might have solved the problems.  We’ll never know if it was faster or slower though.

There are many reasons to switch vendors.  I believe the above illustrates a reason not to (assuming the vendor is satisfactory).  Having a good working knowledge of your organization and architecture is something with great intrinsic value.  If I was a hiring manager I’d choose the average consultant with exceptional local knowledge over an outsider who was exceptionally skilled and had no local knowledge.

If you are a consultant you should always be learning the culture of your customer.

If you are a customer you should be mindful of which vendors are actually interested in forming that long term relationship with you and which would rather try to get in and out fast.