There is a variety of firm size in the software consulting industry, but it is important to understand the risks and benefits of each.
Freelancing Software Consultants
Typically working from home, freelancers are the least likely to be classically trained software engineers. Often coming at the lowest rates, many freelancers are trained in another skill-set, but decided at some point to move into software development (almost always in addition to an existing IT or graphic design trade). While lone rangers can be found with this model, continuity of support is one of the top risks, as individuals rarely last the test of time (just ask the small business association for some statistics on small business survival rates). Finally, individuals are going to be the most likely to overstate his or her skill-set in hopes of getting a larger project and “stretching” into the new role. Make sure he or she can provide multiple references in your industry and on the proposed platform.
Small Software Consulting Firms
Small firms often are young, both with respect to age of employee and age of the firm itself. Small firms often provide very personalized service, but with only 5-10 consultants, may typically only work for a few clients, or a few projects concurrently. Also, small firms do not typically provide dedicated project management or formal documentation, as they do not have enough work to maintain this skillset in-house. In addition, other types of services are often subcontracted by small firms, which can lead to questions as to vendor accountability if there are issues with a project.
However, small software companies often charge the lowest rates in the industry, so they can offer a savings for budget-sensitive buyers. Small firms will typically only have 1-3 customers; you are likely to get dedicated service while your project implementation is underway.
Mid-size Software Consulting Firms
Mid-sized firms often provide a mix of skill-set specialization coupled with available dedicated Project Managers and standardized Quality Assurance practices. While these companies may be too large for the smallest projects, they scale well into the lower end of enterprise software implementations. Starting with mid-sized firms, company-level certification becomes more common.
Another thing that you will begin to see with mid-sized firms is project methodology. They typically use a more lightweight methodology than the larger firms, often incorporating elements of many “standard” methodologies from software engineering. It is important that you find a firm whose methodology is a good fit for your company in terms of its rigor.
Large Software Consulting Firms
These firms typically offer the widest range of technical expertise and project background. They also will typically use the most formal software project management methodologies, which can lead to billable time bloat on smaller software engagements. An advantage of larger firms is the business continuity you can get from the vendor side of the table – if the lead on your implementation is unavailable for some reason, there is likely a suitable replacement already on-staff. These features combine to produce the highest price, but possibly also the lowest risk project deliverables.
Specialized Software Consultants
These are software developers that work for a particular application vendor, say Schlumberger, for example, and are highly skilled specialists for one particular application and typically that application’s problem domain only. Often coming at a premium rate ($200-300/hr and up), they can be a scarce resource, as they typically handle highly specialized problem domains which can be very industry, vendor, and even product-specific.