I try to post original content. Sometimes that originality may only be in the presentation of the information, in which case I am attempting to provide (I hope) a clearer understanding or a simpler approach. Because of this personal rule of conduct, I first researched this topic to which I have thought and spoke about for quite some time and was very surprised at what I found. What is already out there on the subject of comparing contractor and consultant roles is sometimes contradictory and has some distinctions that I think are based on only thinking about individuals rather than encompassing companies that provide both services as well. Rather than argue the points others have made (which I don’t necessarily disagree with in certain, specific contexts) I will present my thoughts and experience and leave it to you if you wish to research further.
What’s the Difference?
In short, the basic difference between the two is simple: A contractor is an individual who possesses a specific skill set that they will utilize to your specification, where a consultant is an individual who has experience with developing a solution within a domain where you need assistance.
The basic difference is also inadequate to understanding which one you need for a given project (or aspect of a project) and how to work with them to your best advantage, so let’s dive a little deeper into the more subtle differences.
While you may work with both as individuals it is more common to work with them in groups. A group of consultants will be a team assembled on your behalf by a consulting company (AKA partner, group, professional services provider, etc.) and should be self-managing. A group of contractors may come from the same agency but will require management (which may also be contracted).
Consultants can help you define the problem and work with you to develop a plan to get from current state to target state. Frequently they also perform and/or manage the tasks and deliverables of the plan. Consultants can direct contractors to execute to the plan, and will often provide those contractors as well.
Another difference is that for a contractor to be valuable, they must be deeply familiar with a specific aspect of the project, where consultants need only be familiar with the general domain of the project. One of the best reasons for engaging consultants is their proven ability to navigate through the unknown.
Working with Consultants vs. Contractors
One difference not included above is cost. There are many different fee structures for either, though they can all be broken down (for the sake of comparison) to cost per hour of effort. Consultants are almost always a higher hourly cost. The difference is usually reflected in the value provided during that time, meaning that you will get more benefit for each hour of consulting. They key word in the previous sentence is usually.
There are two common scenarios where the value is not always higher with consultants. The first is when it is the wrong consultant. The wrong consultant can be engaged for any number of reasons, and once this is determined than it should be corrected. This, however, is not the most common reason for missing out on the full value of a consultant.
The most common reason for not realizing the maximum value of a consultant or consulting team is working with them like they are contractors. Consultants should be actively involved at all levels of the project. During requirements definition they can provide their experience with what similar projects have missed including early on, and help determine prioritization through an understanding of the effort involved in delivering a requirement. Consultants will be able to apply experience in planning, knowing what tasks can be done in parallel to support timelines and where risks are most likely to occur along with mitigation approaches. Once the delivery phase has begun, consultants will recognize issues and opportunities during regular reviews that might go unnoticed by those who have not done similar projects in the past. Every consulting company I have worked with has a project management practice, and if it is a team of consultants engaged on a project it will generally yield the most value if the part of that team is a project manager who will, among other contributions, help the client to realize the maximum benefit of working with the consulting team.
Having one or more consultants on a project and then tasking them the same way as contractors is like rowing a power boat. It can still get from one place to another, but the boat is under-utilized, the journey will take more work than required, and it will not be nearly as much fun!
Which is Best for Your Project?
If your project involves technologies that your enterprise is already comforably familiar with and you just need more hours in the day, contractors should fill the need nicely. You may be implementing a larger project where an isolated area is outside of your experience and a contractor can fill that gap and train your people on how to maintain it afterwards. Or the project you are working on is scaling out your technical landscape and you will need to keep on someone afterwards for maintenance, so contracting can be a “try before you buy” approach to determine the right candidate.
If there is a concern about whether the project is the right thing to do or the technologies are the right ones to use, consultants can bring experience and a fresh viewpoint to increase confidence. If a project will introduce more than one or two completely new aspects to the enterprise, engaging a consultant should certainly be considered. The nature of consulting makes them familiar and comfortable with the unknown. For many organizations, internal teams need to be more focused on the day-to-day operations and introducing change to the technical landscape can be better served by professionals for whom change is the day-to-day operation.