The gulf between a contractor and consultancy!

Our recent drive to become a "proper consultancy" is starting to pay off, we have managed to get a range of interesting work, as you can imagine this is a source of both excitement and relief.

It hasn't exactly been straightforward though, in order to focus on our consultancy and "brand" it was necessary to turn away a number of offers that would fall more into the typical contractor market.

The difference between the two isn't immediately obvious, especially for a small consultancy finding its way. This made us start thinking about how the two differ and what we need to focus on and avoid in the future.

The rest of this post isn't about the difference between a contractor and consultant, instead it focuses on the difference between operating as a contractor and operating a consultancy. For most of this comparison you can substitute contractor with consultant.

Contractors

Although many contractors operate as limited companies they often find work on the merit of their individual achievements and accomplishments. Sometimes via recruitment agencies.

A contractors clients are very much hiring the individual and they usually expect that individual to work in a similar way to their employees. More often than not they want them to work out of the same office, probably using equipment provided by them.

The contractor will usually work for a fixed amount of time and bill using a daily or hourly rate.

While the agreement between the contractor and the client might include clauses such as "right of substitution", the reality is that should such clauses by activated the contract would probably be terminated, this further highlights the point that clients hire the individual, not the "company".

Consultancies

The way we see it the primary job of software consultancies is to bring together great people and facilitate their roles as consultants. In order to do that the consultancy must be able to win work on its own merit.

If the contractor is valued and hired based on their skills as an individual then a consultancy is hired based on its brand, its client portfolio, the level of perceived risk to the client, their engagement with the community, etc.

While contractors often work out of their clients offices a consultancy will usually have its own offices and place its consultants on site only where applicable, this allows the consultancy to have a degree of detachments from the clients working practices, for instance, they may operate a fully remote working policy in order to bring in the best people.

None of the above detracts from the fact that you still need great people, you still need your clients to buy into the consultants you put in place, but you also need them to know that your brand, culture, and expertise will allow you to continue to place excellent people.

Conclusion

Considering the above it became quite obvious we are still reliant mostly on the reputation of our consultants to win new work and this is something we need to change moving forward. This isn't a painless or short process, as mentioned above, sometimes it means turning away work when the client isn't expecting us to operate like a "real consultancy". Moving forward we plan to focus on the following:

• Winning project based work billed in milestones, rather that time based work billed by the hour/day.

• Improving awareness of our consultancy by writing more about how we work. e.g how do we find good people, how do we know they can do a good job on a client project.

• Showing how we work and what we build in the Open Source community.

Thanks for reading.