A quarterly newsletter for clients and friends of Chenault Systems
We would like to congratulate Southwest Office Systems, Inc. for being named "Small Business of the Year" by the North Dallas Chamber of Commerce. Chenault Systems feels honored for being one of the finalists. We are grateful to receive this recognition from such an esteemed group and special thanks to Dykeman Associates for nominating us. We hope to continue performing at a level our clients expect of us and provide business solutions through technology tailored to the client's needs.
Back in 1985, Tom Packard, founder of Marfield, Inc., had an idea to make his small business the best printing company. He had the vision to use database technology to better serve his customers. Using a fast development database language named R:Base, he built an order entry and billing system for his customers, who comprise the Fortune 500 list. Marfield's customers were able to receive invoices custom built for their operation. This attention to the detail of customer needs has resulted in continued rapid growth. Since then, Mr. Packard has turned the business over to the second generation of Packards, who have greatly increased sales volume in a short timeframe.
Marfield, Inc. specializes in business card and stationary programs. During 1997 and 1998, Chenault Systems and Marfield combined forces to streamline their database system, bringing it up to date with Windows and a multi-user network. This further facilitated Marfield's rapid growth. In addition, Marfield has now contracted with Chenault Systems to handle all of their computing needs, which include consulting, database development, web site development and network installations.
"Chenault Systems is a partner that we trust with our computer technology and has helped us in our growth" as stated by Lee Ann Packard, Sr. Vice President of Marfield, Inc.
Chenault Systems feels privileged to accept this responsibility. (Marfield also does all of our printing!)
The following is a revision of an article from our November, 1997 issue and reprinted due to popular request from some of our new 1998 clients. Our new brochure was based on this article and philosophy:
Now that our consulting practice is over six years old, we have developed a pattern of attributes associated with successful consulting engagements. These observations have led us to come up with the following conclusions on how outside consultants and companies can work together as a partnership.
Define the project in terms of return on investment. We make sure that the client will benefit in terms of return on investment, or we simply cannot embrace the project. If the client is not sure, in business terms, of the expected returns of a project, then the project will not be a business success for client or consultant.
Last year, we helped a client save $1.5 million per year in long distance telephone cost - which was their pre-project estimate. Actually, the client knew the return on investment and savings before the project began. Our fee of $18,000 could seem high to some prospective clients, but quite reasonable to a client who already did the homework.
For a landfill operation, we created a new system for managing dirt usage. Information from this system enabled the company to reduce dirt usage by 42% saving $120 million over a period of 18 months. In this case, the client knew ahead of time the consulting and system development would be beneficial. However, none us of quite realized it would be that beneficial. The results were a very pleasant surprise for everyone.
The best consulting firms will not take a project unless they perceive a reasonable return on investment, in terms of both revenue and reputation. The profit fuels their business by making more training, experienced personnel, marketing, computer hardware, and software possible, which further benefits the clients. The reputation provides more business opportunities.
Understand expectations and make sure they are realistic before any work takes place. Reliable, accurate estimates regarding the scope of the project are necessary. Calendar deadlines should also be realistic. Prospective clients should be wary if a consultant makes unrealistic claims in terms of low estimates or short timetables.
It is not uncommon for a client to underestimate manpower or time requirements for a project. Good, independent consultants are unmoved by political pressure to pursue impractical deadlines. They will argue for reasonable manpower and timetable estimates, and if the chasm cannot be bridged, withdraw from the engagement rather than suffer the consequences for accepting an unrealizable task.
An engagement letter between consultant and client should be drawn up to state the consultant will give best effort and the client will pay for the best effort. This agreement should include language that the consultant promises not to disclose important or sensitive information.
Constant communication between the consultant and client is imperative. Successful projects are never developed in a vacuum. Many projects fail because the client did not make at least one person with a good understanding of the project's goals available to the consulting firm for questions and guidance. Many projects fail because consultants assume they know better how things are done, and will not seek the client's advice.
Make sure the consulting firm has reasonable experience and rates. This may seem an obvious point, but there are many pending lawsuits where consulting firms have not delivered what was promised. Lack of delivery is usually due to of lack of experience. The lack of experience is a result of poor recruiting procedures. If a consulting firm lacks the right people, it is a poor long-term business strategy take on a project, hoping that somehow things will work out.
Some larger firms, to support high overhead and high partner salaries, have actually resorted to low cost, inexperienced personnel and inflated rates. Recently, a well-known Big 6 consulting firm was sued for $100 million for breach of contract and fraud. The client felt that the large firm "oversold, over committed and under performed, and didn't have the technical competence or the experience that it represented it had. As a result, the project was doomed from the start." The scope of the project was grossly underestimated, which resulted in large budget overruns. The big name consulting firm may lose this lawsuit (for once), since their inexperienced staff left behind electronic mail messages discovered by the client. The e-mail messages bore sufficient evidence indicating a deficiency of staff competence and experience. The sad thing about this episode is that the consulting firm chose short-term profit over developing a long-term relationship, causing them to pay a large price in reputation. Even if the consultants had been competent, the e-mail messages clearly indicated that they did not really care about the client's best interest. They only cared about meeting the firm's objectives, which was solely profitability.
Doing the right thing is the best business strategy. In the book True Professionalism, written by David Maister, a professional is defined as someone who cares. Professionalism has nothing to do with technical skills. "Very few professionals become known by their clients as 'great' purely as a result of technical abilities. The opposite of the word professional is not unprofessional, but rather technician. Professionalism is predominantly an attitude, not a set of competencies. A real professional is a technician who cares." In other words, doing the right thing is not only ethical, but also the best marketing strategy regarding professional services. With this in mind, smaller firms should be considered. They are staffed by seasoned professionals who take on the values not associated with some of the larger firms. Smaller firms normally do not have the larger economic appetites associated with the larger firms, where additional overhead and high partner salaries are the rule, not the exception.
Our client base knows we have competition. All the major accounting firms and consulting firms have systems development subsidiaries. Chenault Systems has its own market niche, which includes leaner, more agile consulting at reasonable rates. We become the client's advisor and business partner. The following list represents our most active clients for the past twelve months:
"Every man has two educations-that which is given to him and the other which he gives himself. Of the two kinds, the latter is by far the most valuable indeed. All that is most worthy in a man, he must work out and conquer by himself. It is that which constitutes our real and best nourishment. What we are merely taught seldom nourishes the mind like that we teach ourselves." - Jean-Paul Richter
"When buying and selling are controlled by legislation, the first things to be bought and sold are legislators." -- P.J. O'Rourke
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