Raising In-House IT Expertise
Honor Guiney understands the art of consulting. Before becoming CIO in 1998 at National Oilwell Inc., she ran the global services organization at Ardent Software Inc., which was later acquired by Informix Corp.
A year ago, as her company was launching a major business-to-business e-commerce initiative, Guiney quickly recognized that National Oilwell and its customers would need consulting help to link core procurement processes. But, rather than asking either to pay through the nose for expensive outside consultants, she created a group of internal consultants that is not only forging closer ties with customers but also generating new revenues for the Houston-based oil-field services company.
As e-business forces enterprises to retool business processes and core technologies in order to collaborate better with partners, more CIOs like Guiney are realizing they need consultants inside their organizations who can help bridge the gap between IT and the lines of business, experts say.
The good news is that, compared with just a few months ago, its easier to fill internal consulting positions. Not only do businesspeople already inside companies often jump at the jobs but also the pool of potential candidates from the outside has improved as consulting companies continue to lay off consultants in todays tougher economy, Guiney said.
The biggest challenges remain determining the best mix of internal and external hires and finding individuals with the right balance of experience in IT and business.
"I dont think you can do without them," said David Foote, managing partner and research director at Foote Partners LLC, in New Canaan, Conn. "When you take them away, theres a void."
The internal consultants, called by dozens of titles, including "business technologists" and "business and technology consultants," usually report to the CIO and often also to a line-of- business vice president. They help IT develop strategic plans for underlying technologies based on the needs of lines of business while helping the business side redesign and rethink processes to better take advantage of technology. Depending on consultants levels, salaries can range from $80,000 to about $200,000.
Like National Oilwell, Haworth Inc. has been growing its internal consulting force. As a result, the Holland, Mich., office furniture maker now relies less on external consultants. Haworths internal consultants are organized to support each of the companys seven key business processes, said Kathryn Farynowski, vice president of global order fulfillment. In order fulfillment, six global business integration consultants are helping in such projects as linking dealers to an Internet-based order entry system and tying transportation and distribution centers into legacy order management systems as well as an ongoing implementation of Oracle Corp.s enterprise resource planning system.
Haworths global vice president of IS, Micheal Moon, created the consulting function about two years ago. It began with seven managers responsible for each business process and has grown to about 20 consultants. In the past two years in particular, the consultants have played a crucial role in helping Haworth integrate the systems and processes of other companies it has acquired, Moon said. Last year, for instance, Haworth acquired furniture makers Groupe Lacasse, of St. Pie, Quebec, and SMED International Inc., of Calgary, Alberta.
The toughest part about creating an internal consulting function can be finding people with the right mix of technology and business skills. Typically, the best candidates have worked in IT but have spent much of their time working in a line of business or for a consulting company.
"Its a tough skill set," said Maria Schafer, director of the human capital management program at Meta Group Inc., in Stamford, Conn. "These are not skills that IT staffs typically cultivate."
Foote estimated that when internal consultants are hired from a line of business or consulting company, their success rate is 88 percent. When they come directly from IT, the success rate drops to 35 percent.
Haworths Moon has had similar results. His best candidates, he said, tend to be businesspeople with some technology background. Haworths consultants have come from internal business groups or from other companies but rarely from outside consulting companies.
National Oilwells Guiney, though, is currently combing for candidates from consulting companies, as she plans to add three more internal consultants to her four-person team. One candidate to fill the directors slot works at PricewaterhouseCoopers and has a masters of business administration degree and a bachelors in industrial engineering.
Its not surprising that Guiney is looking to add consultants. The consultants role has become critical for National Oilwell. The company provides consulting services for free to its business customers in the hope of receiving a bigger share of their MRO (maintenance, repair and operations) spending.
So far, its working spectacularly. After working with National Oilwells internal consultants to automate purchasing through e-commerce, an average customer spending $3 million a year for MRO goods from National Oilwell will often spend as much as $25 million a year, Guiney said.
"Its a highly desirable job," Guiney said, "and these people are driving the future of the company."