Consulting Services: What Are You Really Paying For?

When it comes to consulting services, it can sometimes feel like the fees are arbitrary: consultants have skills that you don’t, so what’s to stop them from charging astronomical amounts? Luckily, in the case of Salesforce consultants, the market has a certain amount of self-regulation because there is so much competition (617 on the AppExchange last time we checked). But you very much get what you pay for.

So what are you paying for, and how can you tell the difference between different consultants?

In nine years, we have seen many types of competitors in the Salesforce consulting ecosystem and they generally fall into three categories:

1.  “The Craigslist Consultant”

This is the least expensive option, and we nickname them “Craigslist Consultants” because they are often one-person shops that serve their local community.

Strengths:

• responsiveness
• price
• a personable approach

Weaknesses:

• small brain trust (so you can’t necessarily rely on them being up to speed on the latest technology and best practices)
• inability to absorb mistakes
   

2.  "The Boutique”

This option is typically a medium-sized company that serves a particular market, and is fairly selective about the types of projects they take on. Idealist Consulting falls into this category.

Strengths:

• larger brain trust
• very approachable
• experienced team who is up to speed on latest certifications

Weaknesses:

• may be unable to engage on large to enterprise-scale projects
   

3.  “The Body Shop”

This option is the largest option. Bluewolf and Accenture fall into this category.

Strengths:

• ability to work on large projects
• ability to turn a project around quickly

Weaknesses:

• not personable
• often not responsive
• often working with offshore resources
   

What informs a firm’s hourly rate?

Within each of these categories, there are consultants who charge a certain amount, and this informs the overall estimate you get. Here is typical pricing by skillset for the consultants employed by implementation partners:

If you get a bid on the low end of this spectrum, it’s likely that your consulting partner is using outsourced labor. If you see a high bid, the skill level is likely higher, so you may need fewer hours to achieve the same result. In general, 40- 60% of your project costs go to consultants’ salary, 15- 30% to operation costs, and 10 - 20% for profit.

How can you gauge how much risk to take on by going with a smaller firm?

Ideally you pick a firm where your project costs are somewhere between 5-45% of the consulting firm's total revenue: under 5% and you will get less responsiveness and lower quality of labor; higher than 45% means that if the project goes south, the firm may not be able to manage the costs to get the project back on track. The best way to measure a firm's revenue is by the number of consultants.

Here is an example of the Total Cost of Ownership for a basic Salesforce implementation:

As you can see, you have many options when shopping around for a consulting firm, and you will be in better shape if you don’t simply accept the lowest bid, but go in with eyes wide open about what the benefits and tradeoffs are for different types of firms.

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