I run an Analytics Consulting company, and I say analytics consulting is a SCAM! Why?
I can say so because I have been on both sides of the table, having hired analytics consulting companies for big organizations and providing analytics consulting services to top companies. I have seen projects worth hundreds of thousands of dollars being wasted, and I have seen them becoming successful too. In November 2017, Gartner released a report stating that 60% of big data projects fail. The company further moved this figure up a notch to 85%.
My personal experience also tees up to these statistics: It is surely a scam.
Now, let us think about this for a minute. If you buy a house for $300K, you are guaranteed to get one. Would you have bought it if there were 60–85% chance of you not procuring the house? You would probably term this obnoxious house purchase a scam. Further, most of us have probably seen outputs of consulting projects worth $300K gather dust. Think: isn’t analytics consulting a scam then?
However, when you have a burning need to solve a customer onboarding issue or optimize your marketing spend, and your internal team does not have the required bandwidth or expertise, you do need to hire a consulting company.
But, how can you do that in a manner that you do not get scammed?
Here are my four learnings on how to avoid being scammed.
- Making sure that you have an executive buy-in – A Fortune Knowledge Group survey revealed that most of the 85% of the failure that Gartner reported was likely a result of executives’ tendency to trust their gut rather than data. Some of these cascades down the organization with political infighting on who gets to own the project as well as who is equipped to staff it. So, before you initiate any $300K analytics project, make sure you have executives and key stakeholders on board, i.e. they are ready to go beyond giving lip service to analytics and data science, and put insights to work.
- Always start with an assessment – Invite your consulting partner on site, let them hear about the issue at hand from all the stakeholders involved, including the executives, and allow them to craft a viable solution that is agreed upon by every stakeholder. If your consulting partner can come up with a solution that all the key stakeholders in your organization agree to and are excited about, your project is more likely to fall in the winning 15% of the Gartner report.
- Make sure the assessment is priced about $20K or less and supported by a money-back guarantee – Most consulting companies worth their salt should be able to give you an assessment for this amount or even less and provide a clear line of sight to the solution. If they cannot, they are not the right partner for you.
- Hold your consulting partner accountable for the plan drafted in the assessment – If your Statement of Work (SOW) pays against deliverables, you are aligning your company’s interest with that of your analytics consulting partner and hence, you are more likely to succeed.