Here is a brief summary of the sections in this topic.
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1. What is a consultant?
The Management Consultancies Association defines consulting thus: ‘The creation of value for organisations, through the application of knowledge, techniques and assets, to improve performance. This is achieved through the rendering of objective advice and/or the implementation of business solutions.’ Consultants can
- Give us an outside-in view of the organisation and help with development of strategy
- Contribute a knowledge of systems and processes
- Leverage external knowledge culled from working on similar engagements
- Provide knowledge of best practice in the market place.
2. The project life-cycle
For all projects (in other words non-routine or non-operational activities), the evaluation steps outlined below should be followed by the person responsible. Often, however, we rush into ‘the doing’ and miss many of these steps out (at our peril).
- Identify value – what’s the business case for the project?
- Create value – develop a specification
- Decide approach – shall we do it in house, or shall we get consultants to advise us or do it for us?
- Deliver value – execution and monitoring
- Measure value – review
3. Defining your needs
One of the main reasons cited for failure of consultancy assignments, and projects in general, is a lack of definition at the outset. If you don’t know what you need from a consultant, then how will you know what to ask for, or when you have received it?
- What do you want the observable changes to be after the assignment?
- These observable, and preferably quantifiable, changes are your evidence criteria for success.
- Ideally, every consultancy engagement should be driven by a clear business case of expected cost over anticipated benefits.
4. Finding a consultant
What is the nature of the assignment? Is it large and complex, or is it relatively small and with impact only within your own domain of control?
- For relatively small projects, consultants can usually be bought from within approved operational budgets.
- Often, companies have ‘call off’ arrangements with providers of professional services.
- For large and complex projects, your purchasing department is likely to prescribe formal procurement arrangements.
- For the public sector, major purchases must be advertised in the Official Journal of the European Community.
5. Selecting a consultant
For a true consultancy engagement, in other words where you are looking for a quality resource to provide an innovative solution, several points need to be considered:
- You need to offer the consultant an information-gathering period
- Selection needs to be on the basis of ‘best value’, in other words not on cost alone but also on the consultant’s ability and experience, and on innovation in the proposal to secure business benefits and reduce risk on the project.
- To get the best value from the situation, the chosen consultant(s) should have personal experience of your situation, listen to your problems, behave inclusively with your management team, offer a tailor-made and innovative proposal after the information-gathering period, link their reward to yours and work with you as a team.
- The big firms provide a level of quality assurance plus a degree of resilience; in other words, they are less likely to disappear, and if the person doing the job does disappear, then they have plenty more resources, even if only generalists.
- Smaller consultancies are usually sector- and skill-aligned and are more flexible to the requirements of the client, rather than providing a ‘one size fits all’ approach.
- Often, the big four pull in niche consultancies and freelancers under their business card to do specialist delivery for them after they have won the business.
6. Contracting the consultant
The amount of legal help you get in on this will be determined by your own familiarity with legal documents of this nature, the ready availability of legal help (for example, an in-house lawyer) and also the level of risk inherent in the whole project.
- A very small project, such as a one-day training course to be delivered by a consultant, could be contracted just via an email including some standard terms and conditions of sale, supported by a purchase order from the client.
- A larger project will clearly require a lot more consideration and in this case you will need to find out your organisation’s standard approach.
- Using, in part, material prepared during the selection and proposal process, one of the first things to do is discuss and agree any changes to the initial brief used during the tendering process. This should then be expanded so that it becomes a full Statement of Work (SoW) that can be attached as a schedule to the contract agreement.
- The agreement itself will probably start from a template, which will then be modified to suit this particular engagement. If you don’t have a template, the consultant should certainly have one available.
7. How much do consultants cost?
The more appropriate question is how much are they worth? If there is not a clear business case, then cheap is still too much. What you should pay depends on:
- How valuable the results are to you – the price of a few days’ consulting pales in comparison with the cost of a company merger
- How much you will reduce your risk by bringing in relevant skills and experience
- How rare the skills and experience are.
Day rates can give the consultant an incentive to delay, while a flat fee may encourage the cutting of corners unless rewards are based on achievement of required outcomes, such as improvements to your bottom line.
8. Execution and monitoring
Leave surprises for birthdays. Maintain a process of dialogue and work to the principle of ‘no surprises’ for either party. You should receive at least weekly written progress reports, and more regular verbal ones.
- Make sure that everyone involved in the project knows who else is involved and in what capacity: prepare an induction pack with all the contact details and areas of responsibility. Give the consultant all the information they need.
- Delegate, don’t abdicate. Good consultants will want to integrate with your team and keep you in the picture. Success is often a perception after the event, so help to manage expectations.
- Remember that you are working with professional advisors, not contractors, and don’t try to manage them. Remember why you brought them in from outside instead of doing the job in house.
- Foster a sense of teamwork.
- Use the SoW to monitor changes.
9. Review and hand-over
If you have followed the process, then you started out with agreed expectations (in other words, business outcomes and success criteria) against which you can review success.
- Have you just got the result only, or have you improved your own capability through skills and knowledge transfer?
- Check that overall successful outcome criteria that were in the Statement of Work have been met.
- Say thank you to the whole of the team, doing so in person, not by email.
- What did you learn? Can you embed it in your personal or corporate processes or knowledge base?
10. Pitfalls with consultancy projects
- We were sold a generic model that didn’t fit our business.
- The project dragged on for ever and cost us a fortune.
- We paid top dollar, but only saw young guys in suits.
- They had burrowed into us like some kind of parasite.
- The board were impressed, but the guys on the ground did not seem too happy with the consultants.
- The advice seemed reasonable, but we were left on our own to implement it, and it never happened.
11. Where to get help
- There are many potential pitfalls to hiring and managing consultants, especially in today’s business environment, in which large consulting projects can involve hundreds of staff and cost many millions of pounds.
- Meta-consultants are effectively ‘poachers turned gamekeepers’, who have been on the delivery side and have knowledge of the consultancy industry and now hire themselves out to clients to advise and manage consulting projects on their behalf.
- The Office of Government Commerce takes this type of approach with its Gate Review process, where independent consultants licensed by the OGC are brought in to review outsourced projects at key points in the lifecycle.
- There are several professional and government organisations that can offer advice on best practice.