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Distinguishing requirements firms from Staff Augmentation

Requirements consulting firms must find ways to distinguish themselves from other types of consulting firms and staff augmentation firms in the eyes of corporate procurement departments. The way that companies view requirements gathering is shifting to a more model based approach. This has created a niche for firms that specialize in requirements gathering and management. Application developers and project managers alike are eager to use these highly specialized firms to help them standardize processes and tools to obtain better and more complete requirements. Business units and end users are also on board with engaging requirements consultants to ensure that the developers and project managers have a more complete understanding of their needs for the software systems that they use. However, procurement department personnel have not yet become as knowledgeable about the unique ways that these firms operate and will often group them with staff augmentation firms and the like. The problem is that a requirements consultant is most often embedded within a team for an extended period of time which bears resemblance to a staff augmentation consultant. They may not see that they are engaging the entire firm vs an individual to work on a project. This affects the structure of a statement of work and can create challenges in the billing process. Most of these firms bill by establishing hourly rates for various levels of resources which is similar to the way that staff augmentation firms bill. The simple solution is to change the billing methods from hourly rates to a set price for each engagement. This can be risky if the scope is not completely defined upfront, which is often the case. The benefit is that these firms can better manage resources by not having to commit a particular consultant for the entire length of a project. As time goes on and companies engage specialized requirements firms more often this may become less of a challenge, but that will require the combined efforts of the corporate business units that engage these firms and the firms themselves in educating procurement managers.

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