A complication of project work is the number of stakeholders. Not infrequently, consultants and outsourcers work on the same project, particularly in IT. Peled in Israel researched the relationship between government bureaucrats, consultants and vendors looking to see who won or lost power when the government outsourced {Peled, 2001}. My diagram indicates the complicated relationships. It also shows that the consultants are a conduit between client and subcontractors.
Peled's analysis of interviews and participative observation found that the bureaucrats suffered a loss of management skills when using consultants, specifically feedback, negotiation, legal and accounting skills because the consultants negotiated with and supervised vendors. Unchecked power of IT consultants hindered management's ability to account. When projects failed, few bureaucrats knew the IT systems for which they were responsible, nor how failures could have been avoided. Peled recommends that bureaucrats must develop an interest in technological projects. On a project that involves a vendor or outsourcing to a third party as well as use of consultants, Peled suggests potential controls on consultants' work such as acknowledging consultants rather than hiding them.
Peled, D. A. 2001. Outsourcing and Political Power: Bureaucrats, Consultants, Vendors and Public Information Technology. Public Personnel Management, 30(4): 495.
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