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How to manage your IT consultant

For small businesses especially, there are several excellent reasons to hire outside contractors instead of internal employees. They pay their own taxes, and you don't have to worry about benefits, which usually makes them cheaper in the long run than internal employees. Also, they're already experts in their field, so there are no training costs, and when the project is done, they go away, freeing up your budget. But consultants come with potential pitfalls, too. Here are a few tips to keep your relationship with your outsourced IT on the up-and-up.

Be sure to verify employment status

In case of any tax audits or inspections, it’s a good idea to have written documentation from a contractor verifying his or her employment status, along with contracts and scope-of-work documents.

Carefully study those contracts

Consulting contracts is a broad topic, but here are several tidbits I've gleaned over the years I've been on both sides of the consulting relationship:

Your lawyer sees everything. I don't care if your consultant is the blood brother who carried you off the battlefield while holding his spleen in with duct tape. Business is business: You show your lawyer everything – scope letter, contracts, maintenance agreements, everything. This is particularly relevant on the client side of the consulting equation, because the consultant will usually be the one supplying the paperwork.

Scope-of-work documents are not contracts. Too many managers pay close attention to the scope letter and rubber-stamp the contract that follows because they hate legalese. Study the contract and have your lawyer explain each clause clearly. This is tedious, but it can save your bacon down the road.

Don't be frightened by liability and termination language. It often sounds nasty to newbies, but contract text is typically boilerplate. Don't ignore the contract, but if your lawyer says everything's okay, believe it. Do pay close attention to the intellectual property clauses. These can often cause problems because consultants reuse the same contract over and over, but not every situation lends itself to the same property agreements. Also, be sure that the language used in the scope letter (especially details pertaining to deliverables and payment methods) matches what's in the contract.

KISS – Keep It Simple, Stupid. The longer a contract, the more room for error. If the project is big, consider breaking it up into several contracts. This is usually more favourable to the client than the consultant because it doubles as a performance booster – if the consultant screws up phase 1 of the project, you're under no obligation to hire him or her for phase two; you can even gently remind the consultant of that fact during progress meetings.

Your change log is their change log

Systems administrators use change logs to keep track of their work, but too often consultants are exempted from such procedures because they're charging by the hour and managers are looking to save a few pounds. Instead, internal techs are asked to keep the change logs, which is difficult because if they knew precisely what the consultants were doing, you wouldn't need the consultants in the first place.

Keeping track of what's going on is absolutely critical for a safe relationship. Consultants should be required to provide regular activity and progress reports and separately account for their work in your internal change log. This is a surprisingly useful comparison tool for project managers, too, because there are often two different people at the consulting outfit providing the information.

Don't be afraid to ask for a second opinion

Hiring a second consultant to manage the first one usually causes problems. But hiring a second one simply to verify the first one's work is often a good idea. You don't even have to tell the first consultant you're doing it. It's also a great way to make sure you're getting the right change log information from the first guy. If you ask Consultant 2 to check out the router configurations set up by Consultant 1, and number 2 comes back saying the listed passwords don't work and the Access Control Lists don't even exist, then you know Consultant 1 hasn't done what he said he'd do.