The Nomadic Developer Book Excerpt - CHEAP Consulting, the 3rd Deadly Firm
This is a book excerpt from my upcoming book, "The Nomadic Developer". It is in a chapter titled "The Seven Deadly Firms", which includes elaboration on two previous firms, FEAR and BOZO, as well as several others you will need to buy the book to learn about.
While a body shop tends operates in the world of low-cost contracting, CHEAP Consulting executes entire projects using hordes of low cost developers, rather than small numbers of good ones. Ironically, this makes their projects, after all is said and done, come in far more over budget than the firms they competed with in the first place.
CHEAP Consulting takes advantage of the tendency of some organizations to buy services based on rate-per-hour, to the exclusion of all other considerations. This frequently occurs when the agent purchasing professional services is separated from the person who is responsible for the outcome of the professional services. In such a case, the former (often called a vendor manager) is compensated on getting average hourly rates low, and does not have a meaningful stake in project outcome. The latter – often a development manager – is left with the results and often lives a very frustrating existence trying to get useful software built using the lowest bidder per hour.
This scenario occurs because there is a mindset in some quarters that a developer-hour is a universal unit of exchange in software development. Of course, history shows us that the output of one developer-hour of a person with a particular skill set can vary drastically from person to person (Curtis 1981, Mills 1983, DeMarco and Lister 1985, Curtis et al. 1986, Card 1987, Boehm and Papaccio 1988, Valett and McGarry 1989, Boehm et al 2000). However, despite all this overwhelming evidence to the contrary, there are some organizations that continue to be blind to this reality, likely as a result of the influence of a long tradition of thought in industrial engineering – starting with the work of Frederick Taylor - that seek to minimize variation in personnel performance.
Life at CHEAP Consulting
The main feature of CHEAP is the heavy use of the word resource. More than any of the seven deadly firms, at CHEAP consulting, the fact that you are one resource of many, pluggable from one project to another, is the chief feature of this firm. That said, life at CHEAP isn’t bad, per se – this isn’t FEAR where the goal is to keep you there by sheer intimidation, nor is this BOZO, where the projects that are sold usually end up being done for a loss. If anything, CHEAP consulting is a place where you do mediocre projects for mediocre money for mediocre companies.
The problem for consultants at CHEAP is that the work is of low value, requires comparatively low skill, and frequently features technology several generations behind what would be considered current. Conformity is a core part of the culture at CHEAP. Because of this culture, the primary attributes that cause growth of a software developer, chiefly using the creative urge to overcome technology problems, tends to be selected against.
This, of course, is just fine if your main goal in life is to simply collect a paycheck and put in your time. And for people for whom software development is merely a means to an end, working for CHEAP is a perfectly acceptable solution. At least for awhile.
The problem, however, is that if you become a commodity, you become very easy to outsource. The kind of work done by CHEAP consulting can also be done very easily anywhere in the world. Thus, the main problem with CHEAP consulting is that it becomes CHEAPER consulting over time. Thus, over time, your ability to make a consistent living becomes more and more difficult, and you are constantly prone to job loss.
Which gets to the next feature of living at CHEAP Consulting – constant fear of being outsourced. Because you know you are a commodity – unless you are blissfully ignorant of what is going on around you, you likely lose a lot of sleep that your consulting gig will be shipped to India, or nowadays, somewhere even less expensive than that, such as China or Vietnam.
Lastly, the salaries at CHEAP consulting represent where this firm sits in the marketplace. Because they compete on price, it is highly likely you will be in the bottom 25% percentile of wages for your given skill set. Furthermore, advancement is going to be slow, and because you are working on technology several generations behind what is current, your ability to market yourself is going to be limited to other similarly situated companies. It becomes something of a downward career spiral that can be tough to recover from.
Signs You are Interviewing at CHEAP Consulting
If job ads in consulting came with salary figures attached to them, it would be real easy to know who CHEAP is. Unfortunately, rarely is this the case. As a result, you have to look for the signs that point to what will ultimately be a low job offer.
The first thing to ask that should give you an initial sign you might be at CHEAP consulting is to ask the prospective firm how they get business. CHEAP consulting tends to get business through what are known as vendor management programs. Now, not all vendor management programs are bad or dysfunctional, but many are, and seeing a prospective firm primarily working through said entities is usually a sign that such a firm primarily competes on price.
A second thing to look for is to ask what technology you will be working with. Of course, this can be difficult, because the technology stated in the job ad can describe what they want you to know, which frequently has nothing to do with what they want you to do. The actual work you are doing may end up being on technology several versions behind what is current, which is a good indicator you are working for this kind of firm. The question to ask, then, is “what kind of technology will I be working with on day one?” The manner in which this question is answered should tell you a lot about this firm.
Prognosis
I would like to think this kind of firm is likely to fail over time, but cynically, I suspect that there will always be people who believe that people are “plug compatible”, and thus, will have services purchased at the lowest possible price. Especially because there is always going to be a sector of this business doing work with only marginal economic value (higher than zero, but not by much), there will always be a place for this kind of firm. Given that there are some firms like this that are some of the largest firms out there, the economics are going to dictate that these firms will stick around.
That said, while such firms may be good stock investments, they are lousy places for creative minded technology professionals to work. While marginally better than the more dysfunctional cousins, BOZO and FEAR, it is, nonetheless, not somewhere that most people will ever go to work for on purpose.