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Don't sign before you read this!

If your IT manager wants to hire an integrator, Meta Group analyst Peter Burris offers some advice that will prevent grief and save money.

    How's this for a value proposition: You're too stupid to do this yourself.

    Not a customer-friendly message. Yet that's precisely what is implied by the behavior and direction of so many integrator companies, or consulting groups that work on IT projects.

    Drop $40 million in the corner of the room. Shut the door on your way out. You'll see us again when we need more business. In the meantime, we'll slide details under the door to you. If we encounter a problem, you'll hear from our lawyers.

    Of course, that's the worst case. Integrators are a critical cog in today's IT wheel. This is especially true during the current labor "triple-witching hour." Most IT companies now face economy-driven budget cuts, competition-driven demand for new systems, and a severe labor shortage.

    Properly used, integrators can be a powerful complement to an IT organization. Challenged by a competitive industry, integrators must constantly improve their skills with new tools and innovative methods.

    Also, integrators must be passionate about forecasting-type cost metrics. And they can use certain management techniques--like offering market or partnership equity--to attract and retain quality people. Finally, integrators can assume some degree of employment risk by leveraging employee expertise across clients.

    IT groups, on the other hand, frequently underinvest in new tools, focus on "steady-state" types of cost metrics, and are constantly battling with human resources about really important stuff like job titles and formal hiring structures.

    Down to details
    Projects typically are the "products" sold by integrators. By selling projects, integrators and clients can reasonably bound expectations, price, deliverables, time frames, and so on.

    However, the project metaphor creates its own problems. A project emphasis tends to make issues more complex--bigger projects, bigger fees. It tends to emphasize artifacts delivered over knowledge shared: "We code; we don't operate!" It minimizes opportunities for midcourse corrections: "This is what we agreed to; that is extra." And most importantly, it vests overall relationship control with the integrator (for example, "Shut the door on your way out.")

    Here's how an organization should manage integrators during these tough economic times:

    • Never let integrators "own" requirements. If you must employ a consultant to write requirements, make sure that they are working directly with your business people--and try to hire a different company to implement the system.

    • Force integrators to break projects down into smaller, discrete chunks that allow for reasonable points of integration and midcourse corrections--and can set the stage for a new round of bidding if the integrator habitually makes errors.

    • Work only with integrators that demonstrate an appreciation--a passion even--for sharing knowledge with your organization.

    • Never let an integrator tell you that one of your employees is screwing up and that they've the perfect replacement in mind. A real test of knowledge transfer is if the integrator takes the steps necessary to make your employees the stars. Under no circumstance, though, should an integrator be allowed to place a fox guard at the henhouse door.

    Unless the integrator truly possesses knowledge that you can't otherwise access, assume that they'll be 30 percent more expensive than your own people. After all, the integrator has to pay sales staff and return something to firm owners.

    And never, ever give up control of your infrastructure. Outsource the pieces that aren't business critical, but keep a tight grip on the project from end to end.

    The test of an integrator's capability shouldn't be a demonstration of affinity with new and groovy tools, but rather the ability to use tools to build systems that are easy to use.

    But assume the worst. Build in safeguards to protect your company's interests--and that of the integrator's as well. Only then can a positive working relationship be established.

    The integrator business model has been developing cracks for some time now. I'm amazed that the industry, which has been touting the revolutionary qualities of e-business, customer relationship management, and so on, seemingly hasn't taken any steps to incorporate new, productive business practices.

    But ponder this: Every industry sees product costs drop as buyer and seller experience appreciates and competition dominates--except for the integrator industry. A company launching an enterprise resource planning system now is likely to pay double what a competitor paid for essentially the same system five years ago. This is an economic aberration that will not last.