BPM consulting has gone mainstream. Everybody's doing it. But is that a good thing? Maybe. If you find the right firm for your particular needs and follow some well-established best practices, your consulting investment can pay off handsomely. If you don't find the right partner, though, you'll likely waste some money and may jeopardize the success of your entire business performance management (BPM) initiative.

The biggest obstacle to finding the right consultant is that many firms overstate their expertise. As the BPM space has heated up, more and more consulting firms have moved in. Some are building on their accounting firm backgrounds; others are trying to leverage their business intelligence and data warehousing expertise. While these skills are useful in performance improvement initiatives, they don't make the firm a BPM expert.

In addition, some experienced BPM consultants claim to do everything. Unlike the software vendors that focus on their core competencies and then partner for the missing pieces, consulting firms rarely partner with one another. In prior years, this consulting guide included a listing of the specific skills that each company offered. The listing was based on data provided by the firm. Most participating firms checked off nearly every box, indicating that they had expertise in almost every area of performance management consulting. Because this section of the guide was not an effective differentiator, BPM Magazine dropped the listing of individual skill sets this year. An organization shopping for consulting firms will likely confront the same problem when it starts talking to different service providers.

Pricing can also confuse the consultant choice because prices vary widely. Some firms simply have a high rate structure, usually because they have a big marketing budget or many high-salaried partners in the firm. Others may be new to the business, and their projects may take longer because they haven't yet developed reusable tools and methods. That said, low price is no guarantee that the client is getting a good deal. One firm's price may be lower than others' because the consultant doesn't understand the true complexity of the task at hand. And often in the BPM consulting world, vendor selection is used as a loss leader. It's done quickly and cheaply to get at the much more lucrative implementation work that follows. Price comparisons are even more complicated when you consider that up-front estimates are just that -- estimates. Most consulting work is still done on a time-and-materials basis; few firms offer fixed-price options.

Is Differentiation Smoke and Mirrors?

Some consulting firms pitch an all-in-one approach. They want all of the customers' business, from strategy development, technology requirements, and software vendor selection to implementation. A soup-to-nuts solution is appealing, but there's a reason many firms that sell soup don't sell nuts: It's tough to be equally good at everything. Very large consulting companies with hundreds (if not thousands) of consultants can have multiple specialized practices, each of which is strong in its niche. However, customers going this route still face a hand-off of their project; the hand-off is just between practices of the same company rather than between different firms.

Planners of a BPM initiative may be better off going with the best strategy consulting company for their needs and then selecting the best implementation firm when they know what product they will be implementing. After all, how can a project manager be sure that the all-in-one company she chooses for technology selection will be expert at implementing the product her company ultimately buys? To look at it another way, how can she be sure the firm will help her select the best product for her needs, even if that perfect fit is a solution it doesn't implement?

Location is another element some firms try to use to their advantage. If they have an office nearby a potential customer, they will try to make that a top decision criteria. Before factoring location into their decision, though, shoppers for consulting services need to make sure that the consultants in a local office have all of the skills their project requires and are available during the project's time frame. Otherwise, the project will rack up unexpected travel and entertainment (T&E) costs.

Likewise, companies choosing a firm based on the expertise of its senior partners need to be sure those people will actually work on their project. The bait-and-switch approach is, unfortunately, still in use at some consulting firms. The senior thought leader at the firm might sit in on the sales call and the sales meetings. This expert may even come to the project's kickoff, but that is the last the customer sees of him, other than a handful of expensive status meetings. Project planners should make sure they know who their consultants will actually be -- and interview them if possible. Check references on the firm, but also check references specifically on your lead consultant. Companies fearful of a bait-and-switch tactic can protect themselves by writing the primary consultant's name into the contract.

Using BPM Consultants Effectively

What other steps can a project manager take to get the best results from each BPM consulting dollar? Use the accompanying BPM Consulting Guide as a starting point. Firms included in the following pages provided the information that is listed, but BPM Magazine has determined, at least, that they are legitimate BPM consulting firms. To decide which ones are the best fit for your needs, use the following tips:

Seek out experience. BPM consulting is not about adding extra hands to the team. Look for experts to supplement your in-house staff. You know your business; the consultant should know BPM. Look for the most seasoned consultants in firms with a strong track record of success.

Do extensive due diligence. Look for a consultant much like you would look for software. For BPM projects, it is very common for the consulting fee to meet, if not exceed, the software cost. Don't just fall back on a firm you used successfully in the past for some other IT project. That success is not at all indicative of how well a firm knows BPM. Evaluate and interview several BPM consulting firms and then do a thorough reference check on the finalist(s).

Request fixed pricing, particularly on nonimplementation work. If it's not available, look for a cap or a reduction in rates if the consultant exceeds the original estimate by more than X percent.

Work side by side with the consultants. Don't turn the project over to them. It's your system. Make sure your people can expand and maintain it with minimal help going forward.

CLICK HERE TO DOWNLOAD A PDF FILE OF THE 2006 BPM CONSULTING GUIDE

Craig Schiff is CEO of BPM Partners, a vendor-neutral advisory services firm that helps companies maximize the return on their BPM investments.