Tuesday, July 12, 2011

Earlier Story - More Details

I have had a lot of emails asking for more details on what to look for in a training and placement consulting company.  Below is what I said was important and let me explain each one, point by point:

What Masters Students Should Look For in a Consulting Company:


1)      Companies that have been Training and Placing Students with a track record of at least 5 years.
2)      Management actually shows up on the weekends when the classes are conducted.
3)      If you live nearby, do a site visit and talk to existing students in training
4)      Make sure that they have direct deposit of salaries.
5)      Make sure they have plans for measured growth.  They should have plans to grow in a technology vertical and/or have plans for bidding on projects.  But they should want to become more than just a desi-consulting company.
6)      Make sure that management attends conferences and stays up to date on the latest technology
7)      Make sure that they use licensed software if it available.

1) Companies that have been Training and Placing Students with a track record of at least 5 years.

This is very important recently.  In the current market place, bringing experienced consultants over from India, has become impossible, so almost every single consulting company know has entered into the training and placement model.  A lot of the older consulting companies have gotten fat and lazy, and I will explain what I mean by this. 

For over ten years, every single consulting company simply brought our experienced consultants from India and then placed them for an average profit of about $15 per hour the first year and about $8 per hour the second year.  Let us take a friends company as an example, they have 1 accountant, 2 marketing staff, 1 human resources personal and with this bare bone staff they were able to file for 200-300 H1B's and typically have around 200 active consultants on their payroll.  So for a staff payroll and company expense of around $25,000 a month they were generating a Gross profit per year of around $4,000,000 with 200 consultants.  These companies are experts at paperwork and were able to do very little work for huge profits.  There is nothing wrong with that, that was the system in place and they utilized the system in place to maximize the profits.

These companies are used to big profits, very little expenses and very little work. 

There is no way you can take the same staff and suddenly turn them into a training and placement company.  Training and placement requires working Monday - Sunday, there are no days off in this business.  It requires big investment in software and hardware.  It requires a great deal of patience and guidance.  It basically requires inventing big money into an asset (the student) and waiting almost 8 months before you can break even. 

So in my final analysis you cannot turn a paperwork factory into a training and placement consulting company.  The two are so different and require a completely different skill set.  So when I say look for companies that have been specializing in IT training for at least 5 years.  They are the companies that will be able to really train and place you.

2) Management actually shows up on the weekends when the classes are conducted.

This goes back to the same principal of fat and lazy.  When you have been able to make big money working for 3-4 hours a day for years and not really be involved with students and in training, there is no way there will be a sudden change in managements attitude.  You really want to work with a company where the actual owners show up on the weekends when the training happens to make the quality control is there.  Only when the actual owners of a company show up will they be able to maintain a high quality training enter.  Training does not mean just finding a teacher and teaching a class.  It means constant evaluations, constant tweaking of the curriculum to keep up with the latest trends, it means making sure that the students have an instant access to management to get their issues resolved, it means getting access to a teacher for a quick resolution to issues.  Yes, yes, ask the company, can I meet you on a Saturday ir Sunday at the office, this will be the best question to see how dedicated they are to the student and the quality of the training.  Any company in which the owners do not pick up the phone in the evenings, Saturday and Sundays, avoid them.  They will hire a money that pay about $1500 a month to watch over everything.  When you pay monkey salaries, the guy that is watching over everything is likely to act like a money, scream once in a while and really be pretty much worthless.  This is not the company you want to put your faith in.  (By the way I am in the office about 95% of the time, including Saturday and Sundays)

3) If you live nearby, do a site visit and talk to existing students in training

This is one of the best ways to really judge a company.  Come by unannounced and talk to some current students in training.  They will be the best judge of the company.  Ask all the tough questions you need to and make sure to ask all these questions without the presence of the management.  What you are looking for is truthful answers from the current students.

4) Make sure that they have direct deposit of salaries.

This is an instant judge of how credit worthy the company is.  Most consulting companies are always desperate for cash.  The owners have either invested all the money into other ventures in India or are simply too new and do not have the cash flow to grow the company.  This is an instant assessment into the financial health of the company.  I have a friends company that is always tight for money and they try their best to borrow money from everyone to pay their payroll, but a lot of times, they fall short, so what they do is run the payroll, but do not mail out the checks, till more money is collected.  As an employee you would have waited for a few days and when you do not receive the check, you will call, they will tell you stories like it must have been lost in the mail and they will get it printed out and mailed again, this will buy them a few days to be able to pay you.  This is the most common way of adjusting the cash flow.  So, if the company does not have direct deposit, avoid them, otherwise you too will be waiting for your check and likely to hear these type of stories.

5) Make sure they have plans for measured growth.  They should have plans to grow in a technology vertical and/or have plans for bidding on projects.  But they should want to become more than just a desi-consulting company.

This, to me, is very important.  I was mentioning this to a friend of mine with a company with about 80 consultants and  he laughed at me and said if he could suck the blood of the consultants for another 5 years he would be happy.  He was planning to move back to India.  I think this is the attitude of about 90% of the consulting companies.  I get laughed at a lot, because I am hiring a business development manager, I am planning on hiring a senior marketing staff member, so yes I spend big money to try and move beyond just a desi-consulting company.  I think this is the natural growth process int he business.  You make money and use that for measured growth to get to the next level of consulting and bidding for projects.  Ask the company what their growth plans are?  DO they have a 5 year plan for bidding on projects.  By the way we got our first few projects.  We have are working on a patented technology in which we are building the software for the technology to work.  We also got a commitment for a midsize company to take over their entire IT department.  They will outsource the entire department to us and we will assign our consultants to keep it running smoothly and within budget.

6) Make sure that management attends conferences and stays up to date on the latest technology

I know about 20 consulting company owners and I do not know of a single on that ever attend IT conferences.  Without attending these conferences you will never be able to keep up with the latest trends in the market place.  This year I have gone to PegaWorld 2011, Gartner BPM Conference and the IBM Lombardi Teamworks conference, and I really wanted to go to SAP Sapphire, but I was busy that weekend .  You really do not want to be learning old technology.  When you attend these conference, you get a great judge of what is trending in the market place.  You want to work for a company that takes the initiative to keep up with the latest trends.

7) Make sure that they use licensed software if it available.

When SAP approached me about buying an SAP license, I did not hesitate and spent about $70,000 to buy the license.  Most desi companies I see, do not want to spend even 1 penny on software and want to do everything illegally.  If a company was ever to approach me and said Vijay you are using our software for training and we want you to buy a license, I would buy it instantly.   I am not sure why, but I just feel like it is right thing to do.  So yes, ALL our Microsoft software is licensed, yes all our SAP software is licensed , and yes all our Lombardi Teamworks training and software is licensed properly.