Mar

26

MiddleMan and Providing Value

March 26, 2008 |

I am an independent IT consultant. I think there are fewer of those than the industry needs. The important word here is “independent“. To me, an independent consultant or contractor is someone who helps advance the interests of the end client.

Sooner or latter a consultant finds out that they need more resources than just him/herself. That is when they become Middle Men. Middle men are good when they combine the right resources and add some value of their own before providing to a customer. Adding a margin is very well justified when you provide something in exchange for it. That value may be in the way of project management, products, or even extra labor. Middle men are not so good when they just combine resources and pass them on, but the only thing they add in the middle is margin. Don’t take me wrong: some people’s business model rely on just that — but that is not my business model.


Middle Man
Image: Copyright (c) CooperToons
People that provide no value added for the margin they charge just get in the way of smooth business and add space for misunderstandings. Also, they seldom understand that the margin they are taking while being a Middle Man brings exposure and risk that they may need to manage. Exposure and risk, without the right resources to manage it is a recipe for failure and for customer dissatisfaction.I think customers should be very careful of the companies they hire. While they should allow for their providers to sub-contract the work, they should also be aware of the relationships between those subcontractors and their providers and understand the value each of them bring to the table.

From the providers perspective, I have made a vow to myself not to act as a Middle Man unless my involvement adds value. I prefer that the person who would have been my subcontractor works directly with my client if I can’t add value. This is good for my client and for my potential sub-contractor. In the end, both will respect my professional ability and both will be more inclined to send business my way. At the same time I do not increase my risk exposure to a project that goes bad — especially if I have taken no direct involvement in the early stages. I will also be helping the partner to win the business — something he/she would have lost if we had added another layer of margin. I prefer a partner/sub-contractor to win business directly than for my competitor to win it.


Comments

1 Comment so far

  1. Rachel @ Master Your Card on March 27, 2008 8:10 am

    You sound like just the sort of consultant that I like. I tend to avoid ‘you people’ at the best of times as I have dealt with too many who are just there to make the biggest profit for themselves as possible and do not care about my needs.

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