How To Start Information Technology (IT) Consulting Business
How much do you know about IT Consulting? Information Technology (IT) is the knowledge (data and information) earned through education, experience and skill formation, which further filtered into intelligence. The product of technology is what we all consume daily as goods and services.
Information Technology refers to the electronic process of capturing, processing, and communicating information. In other words, it is a means to advance the knowledge of society, serves as a transmission belt to generate, assess, disseminate and share knowledge, data, information communication, and best practices at all societal levels. Thus, information technology is the collection, storage, manipulation, and transfer of information using electronic methods or computer-based systems
The electronic methods of communicating information are:
(a) Computer
(b) Devices linked to computers
(i) Telephone
(Ii) Printers
(iii)Fax Machines
The most common method of communicating is computer
Information Technology (IT), sometimes called Information Communication and Technology (ICT), is based on digital information held as and comprises computer hardware, software, and networks. Information Technology serves the following purposes in business
(a) To provide information (b) To increase the speed of production of information
(c) To keep a record, (d) To reduce the costs of doing business,
(e) To provide a better service to customers
Advancements or developments in IT mean changes in the supply side as well as the demand side. The supply side of IT includes computer hardware, software, telecommunications equipment, and micro-electronics.
The demand side of IT is the applications of IT in all economic sectors, including flexible manufacturing, financial transaction system, information system, product channel and logistics, engineering, architectural services, publishing, commerce, marketing, research and development, managerial information system, e t c.
Developments and advancements in Information Technology are in the areas of:
(a) Internet
(b) Electronic office
(c) Telecommuting
(d) Networks
These areas have a tremendous impact on business, commerce, and marketing, to mention just a few human endeavors. Technology developments in Information Technology are based on the following:
(a) Computer
(b) Telecommunication: The word “Tele” means “distance” and the word “communication” means “transmission”.
Therefore, telecommunication is the transmission of thoughts, ideas, and data over a distance through the conventional telephone system, satellite links, optic fiber cables, broadcast, or telegraph.
The telephone system was originally designed as a medium for transmitting the human voice. It works on an “analog” basis, the voice is represented by the electrical signals ranging in frequency and amplitude. The computer holds data, in a digital form using the binary digits “one” and “zero”. To transmit the digital data down a telephone line, it is necessary to convert the data into analog form and then reconvert it to digital signals at the end of the transmission line. The device, which carries out this two-way conversion, is called modem (Modulator/Demodulator)
IT consulting business can be very lucrative and profitable. In the US, the industry is projected to generate revenue to the tune of $471 billion by 2022. It is a career field that is highly paid in every country. There are wide ranges of fields one can specialize, so if it appeals to you unless you lack proper IT knowledge, you will never regret your decision.
IT consulting is the business of providing IT-based services to the consuming public and businesses on the best use of Information Technology to realize their goals. These consultants provide specialized services in a wide range of IT fields. Within the IT fields, consultants can be hired to advise a newbie manufacturing company or provide other technical support to clients. Many IT consultants are usually employees of consulting companies, but some consultants are self-employed and perform their jobs as freelancers. Like many businesses, starting an IT consulting business can be a daunting task. As an IT consultant newbie, you can use our step-by-step approach to familiarize yourself with the rudiments of IT consultancy services.
Obtaining financing, securing a befitting location for the business, and procuring the needed equipment consumes time and money. Floating an IT consulting outfit requires not less than the above mentioned, together with technical expertise, marketing, and sales skills and some level of networking with other business organizations and individuals. IT consultants can provide services to individuals, small and larger businesses, including charitable organizations. The key to a successful IT consulting business is marketing – informing the business world of your offering, delivering the right service, at the right time and place.
Services of an IT consultant include the following:
- Network design, installation, and management
- Website design and management
- Software installation and maintaining up-dates
- Technical IT support
- IT budgeting and procurement decisions
- Hosting services and storage
- Risk assessments management
- Security strategy and management
- Remote administrative management
Information Technology has permeated all classes of businesses and the rate at which IT is influencing business operations is rapidly expanding. In this modern landscape, IT plays a crucial role in the way businesses are run with the help of various apps that enable businesses to flourish and innovate.
Today businesses have become more efficient in terms of facilitating and streamlining operations that tend to reduce business cost; develop better communication, enhance the rate at which new products hit the market, gain a competitive edge, improve business performance, etc.
Why is IT consulting services important?
The IT consulting industry is vast and offers a range of options, from platforms, methodologies, programming languages, tools, technologies, and so on. Because of this array of services that IT offers, it is difficult to use it correctly without proper direction which only an IT consultant can provide. To do otherwise is to muddle things up at your peril.
Today businesses are IT-driven, and it is hard for any business to move forward when stuck in the middle of nowhere trying to sort out the huge build-up of high-tech projects, and struggling to keep up to date with events overtaken apps. IT is ever marching forward with new applications replacing existing ones and by hiring a professional IT consultant; you are assisted to take full advantage of the opportunities today’s information technology presents.
Information technology consultants can create and implement a vibrant and strategic IT plan aimed at achieving organizational goals. They will work with your team business procedures, together with IT present-day information systems capabilities; the bottom line is ultimately achieved.
When you appoint an IT consulting firm, you hire experience, expertise, and an assortment of services. An IT consultant provides services for the management, executes projects, and helps in the upkeep of an IT setup. The IT consultant oftentimes assumes the position of an advisor and helping companies maximize their use of IT and achieve their goals.
Before you launch an IT consulting business, let us take a moment to see what it is like to be a consultant. The good, and the not-so-good.
- Being a consultant makes you an advisor or counselor and it is as fun.
- Being a consultant makes you the envy of a full-time employee who doesn’t have the time of his own.
- Being a consultant makes you a boss, you decide which project to handle and which one to reject.
- Being a consultant gives you control over your time; you decide when to work and when to use your time to achieve personal goals.
- Being a consultant means you are not going to receive regular salaries, you must work on self-employed projects to earn every dollar you receive.
- Being a consultant means that projects don’t come to you freely, you submit a business proposal to vie for a project.
Before you set up your IT consulting firm, you must decide if that is what you want and understand the differences between IT consulting and IT services.
Difference between IT services and IT consulting
IT services and IT consulting may appear the same, prima-facie but technical terminology can be ambiguous sometimes with the result that technical words that are distinct may appear the same.
IT consulting refers to the provision of guidance to clients on IT overall strategy. It touches on the type of technology and features needed to find a solution to the client’s IT problems such as process automation or mobile security. The IT consultant is the domain expert in a particular area who prescribes the features/functionalities to be used in a product/service.
An IT consultant is normally paid to provide the right solution for a client such as recommending the engineering software type that will be suitable for oil exploration. On the other hand, the IT services provider offers a solution based on the services they provide, and nothing more and nothing less. This means that if the IT services provider is Microsoft services, the customer will only get Microsoft solutions, nothing more and nothing less. It follows that if Microsoft services cannot fix the customer’s problem, then the customer’s problem remains unresolved.
How To Start Information Technology (IT) Consulting Business
- Earn IT industry certificates and accreditations
- Draft a business plan
- Determine and choose your specific areas of expertise
- Decide on the structure of your consulting business.
- Research the competitors
- Use standard but allied to specific contract for every project
- Conclusion:
Step 1: Earn IT industry certificates and accreditation
Before you commence your IT consulting business properly, obtain IT industry certificates and accreditation. By earning these certifications, it can make your new business stand out from the competition.
Continuing Professional Education (CPE) will help you be regularly updated on trends and tips on the best practices. You will be able to learn new tricks of managing an IT environment. You can take a look at the CIO Magazines because it lists out some of the accredited certifications for IT professionals. Some of the top programs can be browsed online and you will always find where expertise falls into. Some widely recognized certifications include:
- Certified in the Governance of Enterprise IT (CGEIT):The CGEIT assesses your capability in managing security threats and how you understand IT governance.
- Certified Information Systems Security Professional (CISSP): A CISSP certification confirms your understanding of IT security, together with information assurance, the structure of an organization, risk management, budgeting, and others.
- Information Technology Infrastructure Library (ITIL): An ITIL certificate confirms your specialized knowledge in the ITIL framework, with a particular interest in using effective strategies to control teams and increase efficiency across the board.
- Six Sigma Certification: Six Sigma’s certification program examines IT professionals on how proficient they are on project management and leadership skills, especially when it comes to organizational change.
- Certified ScrumMaster (CSM): Earning the ScrumMaster badge is evidence you know how to keep IT projects on track, limit distractions, and improve project team productivity.
- Certified Associate in Project Management (CAPM): The CAPM certification examines your skills in handling multiple IT projects at a given time, and also manage a product/service life cycle.
Your business can go the extra mile to acquire certifications for a manufacturer’s technology such as Amazon Web Services (AWS), Microsoft, and Cisco Systems. These add-ons can be a great selling point when it comes to potential clients because they know the value of the technology involved.
Becoming an IT consultant means being methodical, strategic, and applying due diligence that will place you in the right pedestal to succeed. That means:-
- Putting in place a professional IT consulting business
- Creating your area of expertise.
- Authenticating the market for your expertise
- Build up a rock-hard client base
- Develop Ian attractive pricing options
- Structure of your marketing and sales
Step 2: Draft a business plan
Crafting a business plan for an IT consulting company is necessary because it enables you to understand both your short and long-term goals but it serves as a roadmap to business success as well as uncover any gaps in your plans. Some newbie avoids this crucial step because they don’t understand the importance of it and what details it should contain.
A basic IT consulting business should contain the following details:
- Summary of the scope of the business plan
- Description of the IT business concept and strategy
- IT industry overview
- IT market analysis
- IT organization and management
- IT consultancy business financial projections
- IT consultancy funding, etc.
But if you are aiming to set up a small IT consulting business, you can bring your business plan into 5 key parts.
- What are your key areas of IT consulting and expertise?
- How much is it going to cost you to get the IT consulting up and running?
- Who are your key competitors?
- Who is your target audience?
- What is your financial and profit projections?
What are your key areas of IT consulting and expertise?
IT consultants generally specialize in areas of computing, networking, website design and hosting, IT support, software installation and maintenance, etc.
It may all look simple and an easy way to make money, but the income you generate and the reputation you gain will ultimately going to depend on the quality of work you do and the value you create in your client business. So it is not going to be in paper alone you qualify, you must have IT consulting cognate experience to serve your potential customers well.
Choose a specific domain within the area of the IT arena in which you are particularly endowed and have the expertise. You may want to be a general practitioner at start-up and progress to specialize in a particular field of IT, you are more likely to attract clients who have special needs.
Also, you specialize on Hardware, software, networking, IT strategy, website creation, hosting, and maintenance, technical IT support, security strategy, and management or a combination of those services are all options. The more services you provide the more options for your clients.
What is the level of the cost required to get the IT consulting up and running?
The good thing about starting an IT consulting is the low starter cost and so far you are technically qualified and ready to deliver, you will be sought after at your home office. All you need to do is to create an office in your apartment, buy a computer system, cell phone, printer, etc. and you are running an IT consultancy company
The cost of starting and running your IT consultancy company doesn’t end with a computer, printer, and smartphone, other recurring expenses need to be committed on daily basis to keep the business running. For instance, the cost of utility bills, transportation, upkeep of the office, wages, and salaries of hired staff, etc.
Who are your key competitors?
It is a good idea to decide at the outset the level of demand for your IT consultancy services and what are the levels of resources required to meet up with the market demand.
Determining early what the demand for your services is because you can leverage on it to fight your way out of the competitors, and indeed surpass them. With the knowledge of the level of competitors’ offerings, you are in a position to design your offering based on your area of expertise to be over and above what competitors can offer.
Who is your target audience?
To be able to serve your clients with the right IT consultancy services, it is important to identify them and what makes up their composition. These findings will enable you to discover where they are, measure their number, identify which services will address their needs and whether they are big or small businesses, etc., and you begin to figure out how you are going to serve them to achieve their profit or other goals.
It can also assist you to figure out your value proposition and service delivery should some of them chose your IT consultancy services. Design your value proposition with the highest sense of diligence and expertise to stand you above the rest and use it to drive you to business success.
What are your financial and profit projections?
Your financial and profit projections determine whether you will go into the IT consulting business or not. Your revenue and outgoing expenditure show how liquid the consultancy will meet with the day to day running of the business. It will also show the profit or loss expected from the business and what change is necessary to bring about business success.
Step 3: Decide on the structure of your consulting business
Be sure to choose how you go about consulting among the following structures:
- One-on-one consulting – this is where you offer advice to a client on one on one basis.
- On to a group consulting – here you offer advice to a group of clients.
- Observational consulting – here you offer advice to clients based on information derived from an outside viewpoint.
- Troubleshooting – this is where you conduct tests after digesting the client’s problem.
Step 4: Research the competitors
Research local IT consulting companies to discover their range of services, their price range, and which market they serve. This pertinent information will determine your strategy to gain attention and attract clients to do business with you.
For instance, assuming the IT consulting firms are providing services to big businesses, as a newbie, your rates will compete favorably with existing competitors. If you have difficulty completing even when you offer a favorable rate, then you may have to choose a different market segment such as small businesses, schools, or unexplored markets.
Step 5: Use standard but allied to specific contract for every project
Before undertaking any contract, have a written agreement that shows your terms and conditions. A contract is necessary to protect you from ligations arising from an unnecessary misunderstanding (consensus ad idem). You should make the client understand what to be expected from each agreement.
A basic IT project contract should contain the following information:
- Scope of the work to be undertaken
- Price of the work and frequency of invoicing
- The time frame for the execution and completion of the contract.
- What constitutes a breach and termination clauses
- Details of the terms of dispute resolution
In addition to the above, the client contract should make provision for business to purchase technology errors and omissions insurance. This policy takes care of any legal action arising from mistakes for work done or missed deadlines. It will attract an attorney’s fees court’s cost and possible compensation if the client files an action against you.
Some projects might also require you to have cyber-liability insurance to enable you to settle payments arising from a data breach or your possible response to a legal claim caused by one. This might not be specifically required in the contract but it is not a bad investment.
Conclusion
Information technology consulting is a specialized field that only experts in the area of IT can venture into. It requires a high standard in education and wide experience to work in the field. If established, it is a question of time before you begin raking in large profit but be ready to work hard. IT professionals are probably the most paid in the world.