A New Strategy For End Clients looking to hire IT Consultants

In the IT industry, as presently constituted, on the one hand we have the “End” client (The final recipient of the IT services) and in the other hand, the Contractor and its Cartels of IT provider of servicesWe recommend that the “End” clients adopt a different strategy other than to become victims to the “Prestigious Ones” the name given by us to those organization that are trying to Monopolized the IT industry to maximize their profits.
This Strategy consist in using Peningo System approach of joining forces with the Consultant and the “End” Client and contracting among ourselves, by-passing the Prestigious ones and their excessive greed and Mark-ups which have lead to presenting only candidates that fit the Mark-up structure, disregarding the other talent that specifically are the ones that could satisfy the End Client’s needs which will never be presented because of their higher rates. By eliminating the “Prestigious Ones” from the process, additional margin becomes available that could go to pay for the resource and at the same time provide savings to the End Client.
Additional reasons for adopting such Strategy by the End Client are:

  • Client controls systems projects that support the client’s successful business plan.

At Peningo, we expect the client to control all systems decisions, as we feel that those
decisions may impact the client’s “Business Plan”. Systems contributions by Peningo Members should be limited to the development, enhancement and implementation of the systems that will deliver a client’s proven successful “Business Plan” intact.

There is a tendency on the part of the “Prestigious Ones” to try to control and influence the client’s “Business Plan” in order to be able to use their “package solutions”. This efforts results in priority being given to systems solutions than to the client’s “Business Plan”.

We have experience salvaging situations created by the “Prestigious Ones” in their
attempts to influence the client’s “Business Plan” in order to use the “standard solution” which results in totally inadequate business solution. Again we re-state our view that systems decisions should be totally in the hands of client personnel and all systems must bow to the needs of the client’s “Business Plan”


The “Bench” Systems

The “Prestigious Ones” maintain consultants between assignments on the “Bench”
waiting for allocation to a project. We at Peningo feel that the “Bench” system is totally wrong for the following reasons:

When a client states a requirement, there is an economic incentive, on the part of the ”Prestigious Ones” to use “imperfect” matches to the client’s requirement in order to reduce the bench idle resources ,which are on their payroll, and are not billable to any client. That is how the “Prestigious Ones” finds themselves offering “Oranges” when the client’s needs requires “Apples”

We have experienced replacing such mismatched resources presented by the “Prestigious Ones” and bringing the client back into harmony by delivering excellent matches to the client’s requirement. In addition consultants are extremely unhappy to be placed on a “Bench” even when they continue to receive their pay.
We approach every client requirement without any limitations except to seek a very close match that has the pertinent skills at an expert level. As we do not support the “Bench” systems we are able to bring upon the client’s needs the best solution available in the Market at that point in time. Our consultants are compensated adequately so that should a situation developed of a gap between assignments the consultants may use their free time as they wish. It is our experience that those that have dedicated their careers to consulting prefer this method best, as they do not like to be mismatched, resulting in personal failures at the assignment.

One single hourly rate

The “Prestigious Ones” when a resource home base is away from the client they offer the resource on an hourly billing rate plus expenses. Such practices lead to extensive overhead costs in the part of the consultant, the client and the “Prestigious Ones”.
Peningo’s approach is to offer our consultant at a single hourly rate. When the Peningo consultant home base is remote to the client we would have quoted the single hourly rate as all inclusive (no expenses to be added). The client for all purposes may consider all Peningo resources as local. It is up to the consultants to decide if they want to commute on a weekly basis or relocate in close proximity to the client’s site for the duration of the assignment. It is our experience that the consultant and the client prefer this method and for Peningo, facilitate the inclusion of a nation wide pool of resources to respond to clients requests.

Markups


It is in the nature of the “Prestigious Ones” to function with extremely high overheads that leads to the need for large Markups. As the consultants wants their earnings increased the “Prestigious Ones” finds themselves in the need to go “off shore” for resources that may fit their Markups requirements, with the consequent negative effect on quality of service.
By eliminating the “Prestigious Ones” Peningo will be able to share the savings with the consultant and the client. The client benefits by having a business formula that rewards the consultant, making it possible to retain the most accomplish resources available while receiving a substantial cost reduction.
If you wish to pursue this matter further please contact Peningo Systems Inc.


About Peningo Systems:

Peningo Systems supports and provides Consultants with expertise in many areas including:

To see Peningo Systems areas of expertise, please go to the Peningo Technical Areas page.

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About Edward Pellon

About Peningo Systems ( www.peningo.com ) Peningo Systems and it founders have been involved in IT Consulting for over 30 years. Our goal is to support the individual IT Consultant by providing an avenue for them to be in contact directly to the end client. By doing this we reduce the many layers and tiers of organizations that are involved with placement of an IT Consultant. By reducing these layers and tiers, cost can be significantly reduced to the end client, while still providing the room for the Consultant to increase their revenues. Peningo is a for profit organization. We have decided to earn our “keep” by advocating, establishing and supporting a “market place” where the IT consultant and the “end client” may function without the interference of tiers of “prestigious” companies that bring to the consulting assignment excessive Markups and very little else. At Peningo we feel that the IT Consultant should be paid adequate rates commensurate with their skills and the personal sacrifice inherent in the life of an IT consultant. These allows us to field capable, motivated consultants that will contribute successfully to the “end client’s” systems development and implementation, while attracting to the IT industry new talent that otherwise would go to more lucrative pursuits. With the elimination of the “prestigious ones” there will be costs savings that will allow for the consultant to be paid a higher rate and for the client to reduce its costs. Both objectives represents Peningo’s Mission.
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One Response to A New Strategy For End Clients looking to hire IT Consultants

  1. Cary King says:

    Your comments about the “Prestigious Ones” amuses me.

    I was the person responsible for developing the details of the Peregrine Maturity Model solutions used by the vendor and partners alike. They were designed as a marketing and sales tool to give the customers something tangible to understand the cost and scope of basic implementations.

    If they’re now being used as actual implementation models by the client or vendors or partners, then that may be part of the problem.

    A dirty secret of implementations is that considerably more than 50% of IT Service and Asset Management implementations (HP/Peregrine/CA/Remedy) fail to achieve their business objectives. It turns out that the most often reported cause of failure is caused by human change issues. ITAM and ITSM are three quarters people and process and one quarter technology.

    Like most system development failures, the issues are in the architecture and design phases, not the actual coding phase.

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