Recent studies show that over 90% of all U.S. businesses use some sort of computer system. No matter what kind of computer guru you need, you can find a consultant or firm claiming to be responsive, friendly, courteous, knowledgeable, etc. So, how do you find the right consultant to fit your needs? There are four major areas that you need to explore before you make a commitment. Let's look these areas in detail:

Technical Expertise

This is the most obvious – and problematic - thing to look for in a computer consultant. How do you evaluate a potential consultant's abilities if you don't fully understand their area of expertise?

• Case studies. Get a minimum of three case studies (500 words each) from prospective consultants. Request specific project information such as duration, total cost, number of people involved, and time/budget considerations. Some of your prospects will eliminate themselves by not having a large enough portfolio to complete the case studies, or being unwilling or too busy to do so.
• References . Get references from your prospects for each case study. Verify all the facts from the case study, and find out how the reference began their working relationship. Find out if they are currently a client of the consultant, and if not, why. Ask if they would be willing to hire the consultant again.
• Peer Recognition . How do others in the industry feel about the prospective consultant? Are they a member of any industry-specific organizations, the Better Business Bureau or Chamber of Commerce? The more peer recognition a consultant receives, the more stable and reliable you can expect them to be.

By asking for specific examples of what they have done in the past and whether their previous clients would rehire them, you're forcing the consultant to answer in concrete terms that you've found the most qualified consultant available.

Insurance

You must make sure your consultant is insured for Errors and Omissions, because mistakes cost money! Many companies don't consider insurance as an option because consultants often downplay its importance. Why? Because it requires the admission that the consultant could possibly make a mistake that causes their client financial loss, and that the consultant is concerned enough that this might happen that they've given it some serious thought. Computer consultants generally fall under one of three categories of insurance: 

• Self-insured – The consultant pays any claims out-of-pocket.
• Insured for liability – Most businesses carry this, but it does not work like malpractice insurance. They're as good as self-insured if they make a technical mistake on your project.
• Insured for Errors and Omissions (E&O) – This is an absolute must . Any reputable consultant will make sure that the client will be covered for a minimum amount of money in the event they make a mistake. E&O policies have two different limits on them, per incident and aggregate. Just like car insurance, the policies have deductibles, so get a copy in writing, and make sure that the amount of insurance carried is enough to cover the loss of 60 days of your gross profits (just in case.)

Outsourcing

Does your consultant handle your project, or do they delegate work to freelancers? If they do not do the work themselves, then why should you pay for a middleman? Often consultants who utilize freelance labor counter with some of the following arguments:

• Requires less paperwork
• Leverage the best people in the industry, regardless of location
• Lower overhead – no insurance/benefits/vacation time

Brian Jackson is the founder and CEO of Adjacency Consulting Group. Established in 1999, Adjacency customizes software for businesses world wide. Brian also works in web design and development, and can be reached at bjackson@adjacency.net .

Here's what they don't tell you:

• There are certain liabilities incurred for using freelancers. Without a contractor's agreement prepared by a lawyer, the consultant has no way to enforce what they promise you – like free and clear ownership of the final product.
• Consultants who use freelancers have higher overhead. A freelancer will charge enough money to cover looking for work, paying his own insurance, paying self-employ taxes, etc. Add all this up, and the hourly rate for a freelancer can be double that of an employee (or more!) Plus, you're paying for a middleman.
• The consultant has no control over a freelancer. By law, they can't tell the freelancer when to work on a project, or train them how to do it. If the freelancer doesn't finish a project to specification, the consultant must find a different freelancer and eat the expense or pass it along to you.
• If a freelancer wants to sue for intellectual property rights, or there is no written agreement regarding ownership, then your work could be tied up in litigation between a freelancer and the consultant, and you might be issued an injunction against using the product that you paid for!

So, for all the above reasons, you're well advised to never work with consultants who outsource. Besides all of the liability you incur, you're paying for a middle-man, and that is an absolute guarantee that you are wasting money.

Accountability 

One more thing you must demand from a consultant is accountability. You should insist that your consultant prepare a Statement of Work for you that includes the following:

• A statement of appropriate insurance, listing amounts of coverage, and dates of renewal/expiration.
• A guarantee that the consultant will not outsource work performed for your company.
• A statement of the number of hours per week the consultant will devote to your business (minimum, maximum, or both.)
• A specific, bulleted list of things the contractor is expected to do. This is your guarantee that the consultant clearly understands what they are committing to.
• Specific arrangements for payments, with no more than 20% paid up front.
• A documented protocol for managing the relationship. Only one person from the consulting firm should contact you, and only one person from your firm should contact them. Keep it simple.
• A written statement declaring that you alone own all material and intellectual property created by the consultant.
• Have a clause written into the Statement of Work that gives you a thirty day “out”, which means you can cancel the agreement at any time, for any reason, with no penalty to you.

Additionally, request a financial disclosure or annual report from your consultant. This provides a quantifiable measure of the consultant's financial good-standing and viability.

Summing It All Up

By getting specific information about your consultant's previous jobs, you can rest assured that they have worked on similar sized projects for similar clients and have a pattern of success . Then, if you review their business practices, insurance policies, and financial backgrounds, you will be left only with candidates with a solid business plan and fiscal history. In short, you will have a short list highly qualified candidates.