Network: IT consultancies: How to spot the real consultants

Consultancy has become one of the most overused words of the Nineties, and information technology has more than its share of them. They include one-man companies that put their services on the market through agencies, agencies themselves, headhunters who go out and find particular staff, and companies that go in before the first member of staff has even been thought about.

But what, in the recruitment world, is the difference between a consultancy and an agency?

"There has been a traditional distinction by the methodology they used to recruit people," says Laurie Boyall, founder of McGregor Boyall, finds IT staff for investment banks. "Traditionally, consultants would be retained by a firm with a retainer fee, whereas an agency would provide CVs on a sale-or-return basis in a shopping-list format."

"But I believe that it's changing. If you want to see how the future lies, you look to America and you see the concept of adding value. Consultancies such as ours go in at the planning stage - all our recruitment consultants go on financial markets courses and we have an interest in the business. It is not a case of just supplying a CV; we politely decline about 90 per cent of the people who apply to us. We interview the others and perhaps work with half of those.

"We have a small number of strategic accounts and try to approach our clients' businesses with a depth of understanding," Mr Boyall says. "If you want to survive and maintain business levels, you have to differentiate yourself from your competitors. Banks are not shrinking violets; they're leading-edge users of technology. They have money to spend but those who work with them have to earn it."

Some agencies, who may have people on their books capable of the same tasks that consultancies undertake, believe end-users can be bamboozled into paying consultancies' premium rates. "We think we're certainly more cost-effective," one consultant says. "They may pay someone pounds 20,000 and charge him or her out at pounds 60,000," says one recruiter. "We charge for time and materials."

Jane Moore, founder of ARC, considers her company a consultancy in recruitment with a niche market in IT, although she does virtually the same job as others who make more extravagant claims. "We think we're among the best in the City at placing IT people, but we are consultants in recruitment, not in IT."

John Gilligan, a director of City Consultants, says the distinction between an agency and a consultancy probably rests on "guaranteed deliverables".

"We have a responsibility to and agreement with the client as to what we will deliver and how it will be delivered," he says. "Clearly, we charge a premium rate. We agree a set of terms against which we deliver, and if we didn't, it would be up to us to rectify that effectively at all costs.

"The directors of a company will often be involved in consultancy assignments. I spend most of my time working with clients." City Consultants will also act as a "body shop" when asked to find people with particular skills. "There is a synergy between the two businesses and it was one of the reasons we set up the recruitment side," Mr Gilligan says, "but I don't see any need for people to pay premium rates for that service, and we charge the going agency rate."

The information technology industry is attempting to standardise its training and achievement, taking on board National Vocational Qualifications so that expertise is assessed by objective standards. But the appeal of the word "consultancy" - laden with the suggestion of unplumbed depths and breadth of knowledge - means it will always be adopted by charlatans. Genuine consultants will have to work hard to differentiate themselves.

LYNNE CURRY