- There are increased sales that come from partnering with consulting firms.
- There are major downsides that marketing often does not consider.
This article presents the other side of consulting partnerships that are often ignored by marketing and sales at software vendors.
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How Major IT Consulting Firms are Configured
For decades the major IT consulting firms have been dominated by their SAP and Oracle practices. This is because these were the profit-maximizing vendors for the consulting firms. Software vendors that try to make friends with major consulting firms to try to get them to recommend their software are barking up the wrong tree. SAP developed the most successful consulting partnership. However, they also have the most hands-off approach of any software vendor. They literally turn over the entire consulting contract to the consulting firms. They only have a minimal number of advisory consultants that work for SAP on most of the accounts. As consulting firms have more of an appetite for billing hours than taking projects live, this has resulted in what I estimate to be the lowest quality control and lowest value to the customer of any software vendor. Nearly all of the largest implementation failures, failures that reach the billions, have been with SAP software. This is no coincidence.
So what does this have to do with marketing?
Well, who a vendor decides to partner with within consulting is part of the marketing strategy of a vendor. The consulting company markets and promotes the vendor they are partners with, but the vendor needs control of the consulting firm in the process. Probably the most confrontational interaction in my consulting career was with PwC, who were staffing what was, in my view, completely inappropriate resources at my client when I was working for a software vendor. I was put in the proverbial rock and a hard place. I was trying to have a successful implementation, and PwC was interested in billing the maximum margin for weak resources. If I continued serving the customer that I felt obligated to do but with which I had personal relationships, it placed me into outrageous arguments and conflicts with PwC. This is the position that the consulting resources for vendors are placed into when partnering with consulting firms.
Misreading the Risks of Partnering
In the marketing and sales space, partnering with consulting firms is normally thought of as a “slam dunk.” However, this is because marketing professionals do not know-how consulting firms work and only value the short-term sales benefits from these partnerships. Partnering with a consulting firm is a negotiation, and it is detrimental to the long-term prospects of the vendor to hand over the keys to a consulting firm. This is a complicated area that cannot be entirely in the hands of marketing and sales.