Tech Optimization: secrets to getting the most from IT consulting engagements

By | December 19, 2019

Healthcare provider organizations often rely on consultants to bring expertise and talent to the table during challenging IT implementations or projects. Consultants can mean a successful implementation, a well-managed project, meeting users’ needs and making budget.

Executives in the C-suite, and especially the CIO in health IT matters, must first know how best to use a consultant. They must know how to optimize their time with a consultant or team of consultants for successful outcomes while keeping the bill down.

In this feature story, part of an 18-part special report on technology optimization, five health IT consultants with long resumes offer provider organization CIOs and other executives and leaders best practices for optimizing health IT consulting engagements.

Fitness for the job, not flash

For projects where the healthcare provider organization, the client, is bidding on a request for proposal for consulting services, do not let the bulk or marketing slickness of the consulting firm’s response or proposal be a factor in the evaluation, advised Laura Kreofsky, vice president, advisory services, at Pivot Point Consulting.

“Rather, focus on how well the firm understood and clearly responds to your specific ask,” she said. “A missive of canned language and graphics is hard to digest. A missive that does not address the specific question means: a) The firm does not understand your needs, b) The firm is not equipped to respond to them, or c) Their response was not thoughtful and carefully constructed.”

“Focus on how well the firm understood and clearly responds to your specific ask.”

Laura Kreofsky, Pivot Point Consulting

This also is true in a non-competitive bid, she added.

“If you have asked for a proposal directly and you receive a response full of canned language and/or not on the mark, evaluate if the consulting firm is going to be a good fit, short- and long-term,” she suggested. “If you do receive a response or proposal that is tailored and thoughtful, but needs modifications to ensure alignment with your objectives, provide the firm with specific feedback on where the proposal was not aligned and ask for a revised proposal.”

For example, if the firm’s proposal has defined the work as a single, long, complex project and the decision maker knows the organization is better equipped financially and/or culturally to do the work as two separate sequential projects, make the request, she advised.

“A consulting firm that wants to earn your business should be willing to work with you to ensure the approach meets your needs,” she said. “Alternatively, if the senior members of the consulting team provide strong rationale on why the modifications add risk, complexity or cost, be willing to incorporate their perspective into your decision making.”

A firm that listens and incorporates

When seeking to have an optimal consulting engagement, two best practices come to mind from insights shared by providers with KLAS, said Jennifer Despain, an analyst at KLAS Research.

“First, consulting engagements work best when there is a partnership between the provider organization and the consulting firm,” she remarked. “This means finding a firm that listens to and incorporates the needs and culture of your organization while also standing up for best practices when necessary to keep your organization headed in the right direction for a successful project.”

“In the ERP Implementation report published by KLAS this year, a common problem providers reported was inconsistencies around the quality and expertise of consultants on a project.”

Jennifer Despain, KLAS Research

An organization should speak up, ask questions and be an active part of the engagement, especially when it feels something is not a good fit or headed in the wrong direction; further, it should make sure to pay attention and understand best practices recommended by firms, she added.

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“Having discussions throughout the engagement with both the consulting firm and organization around where the project is, future expectations, and what steps are needed to reach successful outcomes can bring better understanding and direction to reach the anticipated results,” she noted.

Second, provider organizations should make sure to have the right resources on the project, Despain advised.

“For instance, in the ERP Implementation report published by KLAS this year, a common problem providers reported was inconsistencies around the quality and expertise of consultants on a project,” she recalled. “In this space in particular, providers shared that there was a shortage of experienced consultants, which was often attributed to new ERP cloud software solutions on the market.”

Providers that spoke up and switched out consultants who did not fit culturally within the organization or were lacking the right skills were more satisfied than those who left unsuited resources in place, she said. Most of the providers KLAS spoke with shared that firms quickly replaced these resources and that the engagement went significantly better after changes were made.

Be prepared

One of the biggest challenges for consultants is a lack of onsite preparation during the initial phases of a project, noted Peyman Zand, vice president, advisory services, at CereCore.

“Strategic preparation is key to optimizing consulting engagements,” he said. “CIOs should set clear expectations with the consultant up front. Instead of relying on the consultant to explain what is needed, CIOs must have very specific goals they want to achieve from the engagement. Well-defined expectations up front mitigate the risk of faulty project execution and abandoned consultant recommendations.”

“Well-defined expectations up front mitigate the risk of faulty project execution and abandoned consultant recommendations.”

Peyman Zand, CereCore

CIOs spend significant time and energy constructing the parameters of engagements, but when the project commences, consultants often arrive to find provisions lacking, Zand said.

“For example, there may be no adequate area for the consultant to work, no interviews identified or scheduled, and internal stakeholders not being informed of the consulting engagement or how they can support the process,” he explained. “CIOs can ensure consultants hit the ground running by being fully prepared for their arrival and work.”

Here are three strategic points to consider for better consulting engagements, Zand advised:

  • Define the specific deliverables and expectations at key intervals (for example, kickoff, six-, nine- and twelve-month markers).
  • Ensure expectations are properly communicated, agreed to and aligned with organizational goals for the engagement.
  • Understand the long-term mission of the consultant and their firm: ongoing partnership or project-level engagement only.

Goals, objectives and expectations

John Moore, founder and managing partner at Chilmark Research, agrees with Zand on preparation and goals.

“Any successful consulting project starts with clearly specified goals, objectives and expectations,” he said. “The more one can put these specifics into writing – for example, within the contract – the better. Such goals and objectives should detail who has lead responsibility, what are the paths of escalation should a project get off track, and the manner by which they will be resolved.”

“All too often, consulting firms will send in their top people to land a project. Once a project begins in earnest, these senior people who were so impressive are nowhere to be found.”

John Moore, Chilmark Research

Key performance indicators that tie directly to a project timeline also should be agreed upon before any work begins; agreement on these critical measures will first demonstrate if the “chemistry” is there between both parties and hold both parties accountable for their respective responsibilities, he added.

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“Further, know who from the consulting firm will be onsite to lead project and the experience of the rest of the onsite consulting team,” he advised. “All too often, consulting firms will send in their top people to land a project. Once a project begins in earnest, these senior people who were so impressive are nowhere to be found. Prepare in advance for this common practice by getting in writing who will be onsite leading the team and a detailed profile – background, years of experience, technologies/services implemented or provided, etc. – of all consulting firm team members who will be onsite.”

Coaching teams on value and control

Doug Brown, president of Black Book Research, offers a consulting engagement optimization best practice, too: CIOs must coach their teams on how to be successful in gaining value from their advisory engagements while controlling external consultants.

“A Q4 2019 Black Book survey of IT managers revealed 91% of CIO subordinates received no specific direction or training on tracking IT external consulting engagement results, and whether all the value anticipated was obtained,” Brown reported. “85% of polled executives, managers and employees in healthcare IT have never received any education, training or guidance on how to manage consulting companies.”

“A Q4 2019 Black Book survey of IT managers revealed 91% of CIO subordinates received no specific direction or training on tracking IT external consulting engagement results, and whether all the value anticipated was obtained.”

Doug Brown, Black Book Research

Identifying the key stakeholders, technical team, business team and training a project manager in the planning stages is the CIO’s responsibility, he insisted. However, it is advisable to be cautious as some consultant firms will attempt to exploit the headcount allocated to the health system’s project to minimize their firm’s resources by using internal resources as their own.”

Build a team of trusted advisors

Good partnerships with consulting firms are built on relationships and trust: It’s these relationships and mutual commitment to client success that allow for consulting firms to sustain a strong, stable client portfolio, said Kreofsky of Pivot Point Consulting.

“As a leader of your organization, cultivate relationships with consultants and firms that demonstrate their commitment to work with your team to craft tailored solutions, step in quickly to address course corrections, and capitalize on project optimizations,” she said. “A good consultant/consulting firm will own and remedy things on their end – from a consultant who’s not a good fit technically or interpersonally, to a deliverable that does not meet expectations.”

They also will provide recommendations for efficiencies, economies of scale or optimizations that will yield a healthcare organization the best outcomes, even it if means reducing project scope or resources on their end, she added.

“Over my more than 25 years in healthcare operations and consulting, I have worked with several CIO clients on multiple iterations of their organization’s strategic plan, each one building on our previous work together and a deep understanding of the organization and its strategy,” she explained.

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“I also have worked with other CIO clients across multiple organizations as they have advanced in their career. CIOs should leverage trusted advisors as an extension of their own capabilities – for their objective advisory perspective, their deep and broad understanding of the organization, their experience, and their market insights.”

Central point of accountability

Brown of Black Book Research offered another best practice: Establish a central point of accountability across the health system enterprise.

“This is crucial to manage the consultant expenditure and for the validation of the value realized from the spend,” he explained. “The CIO also should define the metrics, authenticate the baseline, and list goals and values for the desired outcomes so the internal project management leader can accurately measure the project progress.”

Some advisors deliberately underbid on RFP responses to win business and then add fees due to unscheduled scope changes and customizations, he warned. Realistic cost estimates usually lose out to other firms that lowball the engagement; therefore, internal project managers must be vigilant on the cost points of exactly how the RFP requirements will be implemented after the engagement begins, he advised.

Be ready to execute

Healthcare provider organizations waste valuable time and money when a consulting engagement concludes when they still do not understand exactly how to proceed to execute on the consultant’s recommendations, said Zand of CereCore.

“Understanding how to move forward on key recommendations is critical for achieving positive return on investment,” he said. “Insist on very clear and detailed rubrics from the consultant. Know exactly what internal and external resources are needed to execute on the consultant’s recommendations.”

For example, he advised, a consultant’s project plan should include:

  • Detailed action items over six, nine or twelve months.
  • Specific tasks by stakeholder or resource.
  • Costs and budgets for each deliverable.

Leadership and measuring value

Another consulting engagement optimization best practice: Healthcare provider organization CIOs or other leaders must train the IT team to measure consultant value, said Brown of Black Book Research.

“Educate your staff on the fundamental business models of the advisory firm as well as how to assess the capabilities of the consultant staff, and continuously measure and monitor the progress of the engagement’s goals,” he suggested. “73% of IT management respondents to Black Book research claim their consulting project did not meet or exceed their original expectations when the consultant firm had the lead and control over the relationship. Conversely, 94% of client-controlled consultant engagements produced the outcomes desired.”

Additionally, provider organizations should maintain a leading role in project management, he advised.

“Advisory firm consultants must be controlled and report to a single internal project manager in the health system organization,” he concluded. “If they are not, often they will independently change priorities and reallocate resources at their own discretion. The CIO needs to select a strong internal leader who can exercise the necessary level of management over the consultants as the value realized by the health system client will be determined by the control maintained from engagement contract to final payment.”

In a recent Black Book survey, he noted, 62% of respondent CIOs felt they did not adequately assign a well-prepared project manager because of staffing or skill set resource issues in recent initiatives.

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