Star Techies As computers become more indispensable, computer consulting becomes more profitable.

As computers become more indispensable, computer consultingbecomes more profitable.

Every day, computers become faster and more sophisticated.Unfortunately, computer users do not. Throughout the history ofcomputing, these truths have remained painfully self-evident:Computer technology progresses at breakneck speed, while the peoplewho use computers break their necks trying to keep up.

Perhaps that's why computer consultants continue to be inhigh demand, despite a relative flourishing of computer literacyamong businesspeople. As computers have become more indispensablein the workplace, the need for high-tech expertise has onlyintensified. Consultants who can set up complex informationsystems, troubleshoot office networks, train business owners onInternet usage, or provide teams of programmers for short-termassignments (to name but a few consulting concepts) face a massivemarket.

According to the U.S. Department of Commerce, computerprogramming, data processing and other computer-related servicesbrought in a whopping $114 billion in revenues in 1993, the lastyear for which figures are available. Between 1988 and 1993,computer-service revenues grew nearly 60 percent, up from just$67.7 billion in 1988.

Computer consulting is a competitive field, but it's alsoflexible. Successful consultants may operate as staffing services,which are similar to temporary help firms; as individual "gunsfor hire;" or as subcontractors to other firms. Start-up costsfor a solo business can be downright meager: Consultants who workon-site for clients sometimes plug in without buying equipment oroutfitting an office. Even when your aspirations are loftier,capital requirements are not especially intense. Talent, more thantooling, seems to determine business success.

Gayle Sato Stodder covers entrepreneurship for variouspublications. She lives and works in Manhattan Beach,California.

Sufficient Memory

In today's consulting marketplace, the primary talentsyou'll need are marketing savvy, business skills and access tocutting-edge technological abilities (yours or your staff's).In the old days, computer consultants could be generalists,coaching clients on the distinction between hard drives andfloppies, or training them in the basics of word processing. Now,more businesspeople are computer literate and are handling thefunctions consultants used to handle. Consultants, in turn, arecalled on for more complicated work-custom programming, forexample.

If higher skill thresholds put greater demands on consultants,they also put consultants in greater demand. John Hammerbeck, ownerand president of The Systems Group Inc., a data processing,contracting and consulting firm in Dallas, says even largecorporations have trouble keeping pace with progress."It's impossible for one company to maintain the staffthey need to deal with new projects and technologies," saysHammerbeck. "It's easier to bring consultants in than itis to keep all the qualified people they need on staff."

Providing qualified personnel is the core of every consultingbusiness. But the ways firms maintain their talent varieswidely.

The simplest consultancies involve solo subcontractors.Subcontractors work with established consultants, who providecontacts and contracts in exchange for a percentage of thesubcontractor's fee.

Though it has its limitations, subcontracting can be a low-cost,low-risk way of going into business. "If your main goal is asteady flow of income, you can stick strictly tosubcontracting," says Ricki Letowt, owner of Letowt AssociatesInc. in Norwalk, Connecticut, who began consulting as asubcontractor in the early 1980s. For technical wizards who lackthe marketing gene, subcontracting can be ideal.

For true entrepreneurial types, going independent may be a morerewarding choice. Like subcontractors, solo consultants do theirown technical work. But they also handle the "businessend" of running a business-client development, cash flow,strategic planning and so on.

Some solo operators find that one person-and one area ofexpertise-can't cover it all. Letowt, for example, has clientswho want computer networks set up. Since that's not herspeciality, Letowt acts as a broker between other consultants andher clients, and receives a percentage of the revenues-therebymaximizing her sales and her value as a client resource.

What if you're more business-oriented than technologicallyinclined? Then consider following Dominic Schilt's lead. In1988, Schilt co-founded DHS & Associates Inc., a systemsintegration and information systems consulting firm in Rosemont,Illinois. Though Schilt knew enough about technology to understandhis markets-and even to take on a few early assignments himself-hisplan was to build a team of consultants he could oversee anddevelop.

On this scale, says Schilt, "the most important thing isunderstanding the business of business. I have a good, strongbusiness sense and a sales background, which has helped. I'mnot certain that technical knowledge is as important, for example,as understanding cash flow."

The Right Application

Finding the right business format is a fundamental challenge fornew consultants. Another is finding the right specialty. Thanks tothe proliferation of technology, the range of potential specialtiesis enormous; network design, desktop publishing, and Internettraining are just a few examples.

Established consultants make two unanimous observations. First,it's essential to stay on top of your specialty. Unless youprovide the latest information and applications, your assistanceisn't worth much. Second, be prepared to change with themarket. Schilt, for instance, had to re-engineer his firm just afew years after start-up. "The case technology we had beenfocusing on was being replaced by client-server systems,"Schilt explains. "We had to invest a significant amount ofmoney to adapt to that change. It was a challenge, but one thatallowed us to stay ahead of the market."

Reality Bytes

No matter what size or shape a consultancy takes, marketingplays a major role in its success. In this field, advertising inthe Yellow Pages or the local paper simply won't bring in thebusiness. Most successful consultants and consulting firms doaggressive face-to-face marketing.

Letowt credits networking with the success of her business."My first year in business, I went to meetings of everyorganization I could think of," she says. "Anyone whocame within 3 feet of me got a business card. You have to leteveryone know what you do."

Assuming you're in the right market-with the rightspecialty, the right infrastructure and the right approach-even anew consultant stands a good chance of success in this field. Thatisn't because this is an easy business to master. Rather,it's an easy service to justify.

"Today, all companies want to gain a competitiveedge," says Schilt. "To most people, that meanstechnology." Staying on the leading edge of computerization ishard. Selling the leading edge isn't.

For More Information

The National Association of Computer ConsultantBusinesses (NACCB) is a trade association for informationsystems/engineering software consulting and contract programmingfirms. For information, call (910) 294-8878, or write to NACCB,P.O. Box 4266, Greensboro, NC 27404.

For information on the Independent Computer ConsultantsAssociation (ICCA), call (314) 892-1675, or write to ICCA,11131 S. Town Square, Ste. F, St. Louis, MO 63123.

Contact Sources

DHS & Associates, 10255 W. Higgins Rd., #800,Rosemont, IL 60018, (708) 297-5600;

Khera Communications Inc., 2400 Research Blvd., #250,Rockville, MD 20850, (301) 258-8292;

Letowt Associates Inc., 22 Nostrum Rd., Norwalk, CT06850-3118, (203) 838-5255;

The Systems Group Inc., 3030 LBJ Fwy., #910, Dallas, TX75234, (214) 243-1020.