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New W. P. Carey MBA class: How to get the most from an outsourced project

What does a client need to do to manage a consultant effectively? This is Assistant Professor Dawson's research interest, and later this academic year he will bring what he has discovered in his research and lived in his consulting life to a W. P. Carey MBA Evening elective course. "Enrolled students will be very fortunate to have an instructor who has solid practical and academic background in this area," says department Chairman Michael Goul.

2011-08-02

August 2, 2011 — During the course of Assistant Professor Greg Dawson's 25-year career as a practicing consultant, he was involved in the implementation or outsourcing of hundreds of large system installations for a variety of clients. Now an assistant professor in the W. P. Carey School's Department of Information Systems, Dawson has been studying how companies handle consulting relationships. Dawson, who eventually rose to become a partner at PricewaterhouseCoopers, consistently logged some of the highest client satisfaction ratings in the company. "One of the things that struck me during my time as a consultant is that there are some people — some firms — that know how to manage a consultant very effectively, but there's a whole lot that don't," Dawson said in a recent interview. "The ones that don't manage well are at one of two poles: either they believe consultants need to be watched closely because they might 'steal every nickel I have,' or they decide they don't know what consultants do, so they sit back and simply trust the consultant do the right thing." Certainly some consultants are incompetent or try to take advantage of their clients, Dawson said, but the vast majority of consultants want to do a good job for the client. The road to great results, however, is a two-way street. "Those clients who managed effectively and appropriately invariably got a dramatically better outcome than those who tried to take either one of those extremes," he said. So what does a client need to do to manage a consultant effectively? This is Dawson's research interest, and later this academic year he will bring what he has discovered in his research and lived in his consulting life to a W. P. Carey MBA Evening elective course (part of the Information Management Area of Emphasis). Since, according to Gartner, 80 percent of all organizations outsource at least some of their IT projects, Dawson thinks students will be able to apply something they've learned in class to their very next day's work. "Learning outsourcing management in an MBA class is a very good way of gaining the needed experience," Dawson added. "People in the MBA program understand their business very well. That is necessary, but it's not sufficient for being effective in handling the complexities that arise in these relationships." More than an iron-clad contract Many companies think that the way to get the most from a consultant is to develop a "really good contract," Dawson said. The perfect contract is elusive, however, since many of the elements of consulting simply are not amenable to fitting into a contract. Dawson's research explores the effects of information asymmetry in negotiating these relationships. In fact, Dawson says, getting good results starts long before the contract negotiation, and involves much more than a contract alone. Any consulting project has a life cycle, he said, and the development of a strategy is the first step. Understanding the organization and the factors that drive its business will lead to a strategy for the project, Dawson said. There is no one-size-fits-all approach. Next is how to select a provider. There is no single provider, no matter how good a provider may be, that will be right for every company and every project, Dawson said. Finding the right one means knowing what category of consultant you require, and how to access the resources needed to choose. Once the project is in motion, it's incumbent upon the client to manage the consultant. The way compensation is structured will affect performance, but, Dawson said, the client needs to be more involved than that. Students in the class will get to experience the process during their project. They'll explore the parameters of a firm, select which project could be optimized through outsourcing, determine the correct outsourcing strategy, locate a couple providers to do the work, and decide how to compensate and manage the chosen consultant. Take it to work Dawson has tapped into resources developed by the International Association of Outsourcing Professionals (IAOP) to build the course, including training materials and cases. Senior IAOP leaders also helped shape the course. The IAOP is the global standard-setting organization for the outsourcing profession, with more than 110,000 members worldwide. The organization offers several tiers of certification for outsourcing professionals. According to IAOP statistics, over 85 percent of companies report that they get better results when Certified Outsourcing Professionals work on their programs, and 93 percent of those who obtained the certification said that it had a positive career effect. Dawson said that students will get some of the points they need for certification by attending his class. The companies that the W. P. Carey MBA Evenings students work for should see an immediate return, Dawson said. "Once a student has taken my class and learned how to do this, the organization that he works for will benefit. He will get the right firm in to do the work and the company will compensate the provider appropriately, so the chance of a good organizational outcome improves," Dawson said. "It's also good for the outsourcing firm, because they are being managed for mutual success." Benefits for the student include their association with a successful project. And, Dawson added, professionals with knowledge and skills in managing outsourcing see an increase in job opportunities and salary. Department Chairman Michael Goul said the course could not come along at a better time. "We're seeing a shift in the way IT is being managed in corporations. Relationships between IT service consultants/providers and organizations are evolving and become even more complicated. Take for example, Chris Filandro, CIO of Meritage Homes, who described this change quite well in a recent knowIT interview," Goul commented. "This course will deal with those emerging relationships. A student seeking the W. P. Carey MBA Area of Emphasis in information management will find this class a great way to gain the skills and knowledge that are very relevant to this changing IT service landscape," he added. "Plus, managing consulting relationships extends beyond the IT context to many other business arenas. Enrolled students will be very fortunate to have an instructor who has solid practical and academic background in this area."

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