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Lean Banking Can Transform Your Institution. Don’t ignore it.

Let’s start with the great news – financial institutions that are leveraging Lean banking operations achieve up to 30% cost reduction within 2 years, and are maintaining cost-efficient operations better than the average in the industry.
Lean processes are being adopted globally by organizations prone to inefficiency that are negatively affecting their earnings.

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Podcast | How to Avoid Potential Problems in the Course of a Project

There are, unfortunately, no guarantees in life, so your best bet is to have a solid agreement and prepare yourself and your organization to deal with any unexpected problems that might arise during a consulting project. Just remember that all problems have a solution, and the better you plan ahead, the better the outcome will be. Here are some tricks to deal with potentially problematic areas.
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains how to Avoid Potential Problems in the Course of a Project
 
Key Takeaway: There are many problems that can happen during a project: conflict leading to legal issues, talent poaching, early termination… The key is to anticipate the potential problems and how to approach them. And the starting point should be to write the contract with your legal team to know your contracts inside out.

Transcript
Hello and welcome to the episode 43 of our podcast: Smart Consulting Sourcing, THE podcast about Consulting Procurement.
My name is Hélène, and I’ll be you host today.
Each week I’ll give you the keys to better use, manage and source consulting services.
This week, I’ll explain How to Avoid Potential Problems in the Course of a Project
Last week, I explained what are the main features of the European Consulting Market and why its diversity is a strength
WE saw that Europe is a diverse market where Western Europe & Eastern have different growth and focus.
The covid-19 crisis has severely impacted the growth, but 2021 should gradually show an upturn that will benefit the consulting industry.
But this week, let’s talk about project management.
There are, unfortunately, no guarantees in life, so your best bet is to have a solid agreement and prepare yourself and your organization to deal with any unexpected problems that might arise during a consulting project. Just remember that all problems have a solution, and the better you plan ahead, the better the outcome will be.
So let me give you my Cheat Sheet for dealing with potentially problematic areas.
Here what you need to pay extra attention to
The first and most obvious one is to know the contracts inside/out and that means to write these yourself. Plus, it will be easier if you regularly work with consultants. You know, it is important to be clear on your expectations: the details of your project outcomes must be precisely described. Other important parts must include Scope of Work, Timeline, Governance, and how the Performance will be measured. And don’t forget to protect your business and interests in an unexpected or worst-case scenario. And set the ground rules for your Consulting provider to follow and abide by.
Once the project has kicked off, and everything seems to be going in the right direction, you still need to be vigilant. Because many things can change in a long-term project. You should limit the changes in scope as much as possible, and maintain the terms and conditions as they are. However, if it happens, you should trace all changes to avoid disagreements later. We recommend to include a clause stipulating that the contract can only be changed in writing.
Next element to look out: Governing Law. Governing law, also known as “choice of law,” is a key component of a contract. Keep in mind that your contract is always the first point of reference if a conflict arises with your Consulting provider.
You need to discuss with your legal team and ask yourself the question: “What Law would best protect our interests in a consulting agreement?”
Your Consulting provider might also have some demands on that side as well. Don’t treat them lightly, and if necessary, include them in the negotiation.
Alright, Now let’s have a look at sollicitation of personel. You know, the War for talents is ferocious in Consulting, just like it might be in your own industry. A healthy rule is to forbid yourself to poach the Consulting firm’s best talent, and in return, demand the same and include it in the agreement.
As a rule, you need to limit the risk for your company while entering a consulting agreement. Warranties and Liability are usually an important part of the negotiation since the Consulting firm will also try to reduce their financial exposure. Indemnification is another way to limit Liability by requiring your Consulting providers to have the appropriate level of insurance.
In a Consulting Agreement, you will often see a Limitation of Liability each party can incur and a Disclaimer of Warranty.
Typically, a consulting contract is terminated at the end of a project. The Consulting firm has delivered the Service, and the Client has paid for it.
There are 3 main reasons why a contract can be terminated before the end of a project: That can be
– Breach of Contract,
– Lack of Performance,
– Force Majeure.
Your termination clause should cover these cases. You can also include a provision stating that each party can terminate the contract at any time, with advanced notice.
That will give you some freedom to stop a project if you feel the consulting firm is not delivering at the level you expected or your needs have changed.
On certain projects, you might want to add a right to audit in your agreement. It will help verify if the Consulting firm is compliant with your client policies, for instance.
When you include such a clause in your agreement, don’t forget to specify who will conduct the audit, where, and how. Besides, you have to be clear on who will be paying for it.
And now, let me give a Bonus Point – How to Start a Project Before the Contract is Signed?
The normal process is to begin working on a project once the contract is signed. And Consultants, in theory, cannot and should not start working before having a formal written agreement. However, when you are in a hurry, and you are facing a complicated legal process to unfold to the end, you can use a Letter of Intent. It serves as a piece of persuasive evidence that the project will happen and be paid for, and most Consultants will accept it. There is a risk involved though, and both parties should be aware of it. The Letter of Intent will specify all the terms negotiated, in particular: scope and deliverables, timeline, price, other specific demands that you agreed on, and if something else applies to your project.
The risk with a letter of intent is that it is often non-binding unless the language in the document specifies that the companies are legally bound to the terms.
I often say that a consulting project is like a marriage. Everything is blissful until it isn’t. Preparing for the worst is key to make sure you have peaceful and mutually beneficial relationships with your consulting providers.
That’s it for today. Next time, I’ll explain how to select the right consulting partner for your project
In the meantime, if you have any questions, or want to learn more about what we do at consulting quest, just send me an email at helene.laffitte@consultingquest.com
You can also have a look at our website smartconsultingsourcing.com to know more about our book and download free templates & guides to improve your consulting sourcing.
Bye and see you next week! Au revoir!
 

Podcast | What are the main features of the European Consulting Market

Europe is the second largest economy in the world with two distinct zones.However, the size and dynamics vary significantly by country, and we need to look at the market at a more granular level.
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains what are the main features of the European Consulting Market .
Key Takeaway: 2020 has been a particularly difficult year for social stability and security in many regions of the world and the pandemic has amplified social unrest in Europe. If we look at where revenues are growing fastest, retail and manufacturing are providing a glut of work for consultants, as clients continue to respond to the disruption caused by e-commerce and the need to update legacy technology throughout the supply chain. At the same time, digital disruption is pushing a growing number of manufacturers to seek external expertise. Europe is a diverse market and the covid-19 crisis has severely impacted the growth, but 2021 should gradually show an upturn that will benefit the consulting industry.

Transcript
Hello and welcome to the episode 42 of our podcast: Smart Consulting Sourcing, THE podcast about Consulting Procurement.
My name is Hélène, and I’ll be you host today.
Each week I’ll give you the keys to better use, manage and source consulting services.
This week, I’ll explain what are the main features of the European Consulting Market and why its diversity is a strength
Last week, I gave you a few pointers to solve your make or buy dilemma
We saw that Companies, constrained by limited operations budgets, must carefully prioritize and efficiently organize their projects, which may include external consulting services.Many organizations have craked the make or buy dilemma by centralizing Consulting procurement.
The aim is to have a more global vision of consulting efforts, a better understanding of the costs, and more powerful levers for negotiating volume discounts and creating synergies across functions and business units.
Demand management, Make-or-Buy strategy, and Consulting Spend analysis are parts of the answer to ensure alignment with the overall strategy and consistency across the board.
But today let’s take a look at the unique features that characterize the European market for consulting:
Europe is the second largest economy in the world with two distinct zones:
Western Europe & Eastern Europe
So with the UK, Germany, France, and Italy, the western part of Europe comprises 4 of the top 10 economies in the world. Growth in the region is relatively stable, slightly below 2% despite the Brexit dip for the UK, and the rest of the continent.
Meanwhile, Eastern Europe, even though starting from a lower base with Poland, Bulgaria, and Slovakia, is growing at a higher rate at about 4%. The Western Part of Europe is larger, but Eastern Europe is growing twice as fast.
With the outbreak of Coronavirus last year, the economy of the European Union is expected to shrink by 7.4 percent in 2020, with an economic recovery anticipated in 2021. The Consulting market is always following the ups and downs of the Economy, and we can expect the same growth profile.
I said before that European diversity was a strength. So let’s have a closer look.
The region accounts for robust services and a strong manufacturing sector. Europe has a very active Financial sector, in particular, Banking and Insurance. Also, even though not evenly distributed, the region has access to great natural resources and is home to some of the largest players in Energy. Europe is the 2nd largest Consulting market in the world. It boasts an aggregated value close to $100 billion and is growing at roughly 3%.
However, the size and dynamics vary significantly by country, and we need to look at the market at a more granular level.
The Eastern Europe consulting market has seen a steady year of growth in 2019, with every major country in the region – Poland, Romania, Czech Republic, Hungary, and Slovakia – expanding faster than the year previous. And the market of early 2019, was worth $1.9B.
The main drivers of growth come from regulatory changes at the EU & national level, as well as market entry and operations effectiveness initiatives.
But 2020 has been a particularly difficult year for social stability and security in many regions of the world. The pandemic has amplified social unrest in Europe. We have seen massive public protests in France with the now famous “yellow vests”, but also in Germany.
Besides, the tensions have increased with the Middle East, Turkey in particular, and the UK.
But Eastern Europe’s shaky environment have not tampered the steady growth of 5% between 2012 & 2019. 2020 saw a plunge of roughly 3% but the regional GDP is projected to return to growth in 2021 as activity recovers from the pandemic.
Poland is by far the largest market in Eastern Europe and is emblematic of the trends engulfing the whole region. While the nation has been struggling with a constitutional crisis, Poland’s consulting industry continues to grow.
According to Source Global Research, The Polish consulting market grew 5.4% in 2019, now reaching 555M€ and represents 30% of the Eastern European management consulting market. The second largest market is Russia.
In Western Europe, the top Consulting markets are the DACH region (Germany, Austria, and Switzerland) with combined turnover of 11B€, followed by the UK & Ireland with 8B€.
But the Eastern consulting market is affected by corruption.
Romania might have enjoyed higher growth but there is also political turmoil following the population unrest due to state corruption allegations. According to Transparency International’s annual Corruption Perceptions Index, as of 2017, Romania is the 3rd. most corrupt country in the European Union, after Bulgaria and Hungary.
Other countries that deal with serious corruption issues include Albania, Bosnia, Croatia, Macedonia, Serbia, and Slovenia. These markets combined have around 10% market share.
The private sector continues to be the core source of consulting work in the region, with the financial services remaining the market’s largest one.
The demand is mainly driven by the growing need in front-to-back digitization, regulation, and data & analytics, boosting the need for technology-led efficiency projects, and large-scale transformation, besides regulatory work.
But if we look at where revenues are growing fastest, however, retail and manufacturing are providing a glut of work for consultants, as clients continue to respond to the disruption caused by e-commerce and the need to update legacy technology throughout the supply chain.
At the same time, digital disruption is pushing a growing number of manufacturers to seek external expertise, with manufacturing the second fastest-growing consulting market at 9.7% in Eastern Europe in 2017.
As you can see, Europe is a diverse market. The covid-19 crisis has severely impacted the growth, but 2021 should gradually show an upturn that will benefit the consulting industry.
That’s it for today. Next time, I’ll explain How to Avoid Potential Problems in the Course of a Project
In the meantime, if you have any questions, or want to learn more about what we do at consulting quest, just send me an email at helene.laffitte@consultingquest.com
You can also have a look at our website smartconsultingsourcing.com to know more about our book and download free templates & guides to improve your consulting sourcing.
Bye and see you next week! Au revoir!
 

9 secrets to getting the best proposals for consulting services

9 secrets to getting the best proposals for consulting services.

When you hire consultants, it is usually to solve an issue or to prepare for the future. The sourcing process is just a means to get a solution that fits your needs. ​The procurement professionals are here to help their business lines to get the best proposals to chose from.

9 secrets to getting the best proposals for consulting services
But what is a winning proposal exactly? It is a proposal that helps you answer these three questions:

Does the consultant clearly understand the issue we are trying to tackle?

Is the consultant able to tackle the issue?

Can we work with this consultant?

Implementing a structured sourcing process adapted to consulting services will put you in the right conditions to get several solid proposals.

“Failing to prepare is, generally speaking, preparing very well to do the wrong thing”- Sam Harris (Neuroscientist)

READ ALSO
So small or large spend? Managing the consulting tail spendcan be challenging, but are 4 best practices to help you get started.

 
1. Don’t rush it –
Understanding your needs and articulating your expectations in writing is a key step when sourcing consulting. It is also one of the most challenging. Many RFPs for Consulting are rushed in their development. Sometimes the details or the context are insufficient to understand the business problem you are facing.
Maybe some key requirements are missing, or the language is ambiguous. You also might have omitted the common pricing framework to be followed or given too little time for the candidate consultants to respond to RFI/RFP. However, the result is always the same: it is difficult for Consulting Firms to send a solid proposal, in particular, if they are newcomers.
The RFP will be the reference document for the consulting providers you invite to the competition. Don’t forget to include elements on the RFP process such as timeline, criteria of choice, and requirements. It will help the candidates to be laser-focused on your needs.
2. Look for the Right Consultants –
With your RFP in hand, you can start identifying the potential candidates. You might be impressed by some Consultants’ expertise or interesting projects they have been part of, but the most relevant question remains to determine if they are right for you and best fit for your project?
3. Adapt your short-list to the project’s Budget and Timeline –
Look closely at the project’s scope, the budget, and the internal procurement policies to define your criteria of selection for the short-list. Be mindful of your time and adapt your short-list’s length to the level of priority and the budget of your project.
When you have a very tight timeline or small projects with limited impact on your business, prefer a small short-list to spend enough time on the proposal and the references checking. We recommend not going beyond three prospective providers.
For larger projects, you can broaden the first round (briefing/proposal phase) to up to ten consulting firms (depending on the project and the stakes) but keep at most four-five companies for the final round (pitching phase).
When your short-list is ready, contact your suppliers and check their interest by sending your RFP.
4. Secure Confidentiality –
It is important always to protect your confidential information. Don’t hesitate to make your candidates sign a confidentiality agreement at the beginning (even at RFI or RFP stage) to protect proprietary information and make sure the consulting firms will not be sharing your project’s details with your competitors.
If the proposal includes collaboration and sub-contracting, make sure that an NDA legally binds all the project contributors.
If your project is particularly confidential, you should even consider working with a third-party sourcing company, like Consulting Quest, that will handle the process anonymously. They will keep your company and your project confidential until the short-list stage.
5. Remember simplicity Always Wins –
And it’s best to make things simple. Unless you are handling a multi-million dollar project, don’t organize extravagant tenders. Looking through proposals and listening to consultants’ pitches can be extremely time-consuming. It will also considerably slow down your project. Make sure that your RFP process is adapted to the scope and the budget for your project.
If you only have a small number of consulting firms, or if the project is specifically complex, you might want to organize briefings to discuss the project’s details and make sure the consultants have well-understood what is at stake.
If you have a large number of candidates, a clear RFP, and little time on your hands, you can just send the RFP and assess the written proposals to identify the most promising one for the next step.
6. Assess the written proposals –
Once you have received the proposals, take the time to review them with the other stakeholders. Always keep your objective in mind: maximizing the chances of success of your project. You need the candidates to submit their best proposals, and for that, they need to understand the problem very well.
Level the ground, so all companies have a fair chance in the competition. It is in your best interest to do so too. Don’t hesitate to explain in length the background of your company and the context of the assignment and to take some time to polish the Q&A documents.
7. Evaluate the fit with your RFP –
Make sure the candidates have responded to the most important elements in your RFP. Their proposals should help you answer the following questions:

Has the consultant understood our objectives?

Do the deliverables answer our questions?

Do we trust the approach the consulting provider proposes?

Does the team have the required experience?

Is this consultant the right fit for you?

Does the budget fit the value we expect?

Note if there are any gray areas and potential for misunderstanding
8. Identify the most promising proposals –
When working on a large cohort of Consulting Providers, you should focus at first on the most promising proposals to save time and energy. You can always go down your list if you are not satisfied with your first batch.
Start ranking your proposals based on your assessment of the proposals. You can use these five dimensions: objectives, deliverables, approach, experience, fit and budget.
9. Discover and resolve any uncertainties –
You should also be able to put your finger on the proposals’ uncertainties and articulate them into questions. The list of questions will be the basis for the pitch session with the most promising Consultants: an excellent opportunity to clarify the RFP if necessary and assess the fit with your teams.
 
 

Author detailsAuthor Bio

Hélène Laffitte

Co-founder & CEO at Consulting Quest

Hélène is the author of Smart Consulting Sourcing, a step by step guide to getting the best ROI from your Consuting. You can follow @helenelaffitte on Twitter.

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Hélène Laffitte is the CEO of Consulting Quest, a Global Performance-Driven Consulting Platform and author of “Smart Consulting Sourcing”, a step by step guide to getting the best ROI from your consulting. With a blend of experience in Procurement and Consulting, Hélène is passionate about helping Companies create more value through Consulting.

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Consulting sourcing tips

Podcast | How to Avoid Potential Problems in the Course of a Project

4 best practices of category management that will help you create more value from your consulting

Podcast | What are the main features of the European Consulting Market

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This Week In Consulting: The manufacturing industry post Covid

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Podcast | Few pointers to solve your make or buy dilemma

Many companies have internal consulting groups. But how to know how and when to include them in a competition for a consulting project? To help you decide whether it is better to use your Internal or External resources, always focus on the benefits and the specifics of the particular project.
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte gives you a few pointers to solve your make or buy dilemma .
Key Takeaway: Make or buy is not new. Most companies and their procurement function work to optimize their external spend and their pool of suppliers to better support the overall strategy.And it applies also to the consulting category. But there is a prequisite: you need to centralize the Category to some extent.It’s critical to be able to monitor your budget, and centralizing the Category will provide that capability. Some companies have responded to what is mostly a ‘Make-or-buy’ dilemma by centralizing Consulting procurement.

Transcript
 
Hello, and welcome to episode 41 of our podcast, Smart Consulting Sourcing THE podcast about consulting procurement. My name is Hélène and I will be your host today. Each week, I’ll give you the keys to better use, manage and source consulting services.
This week, I’ll give you a few pointers to solve your make or buy dilemma. Last week, I discussed how people shaped the consulting market and your perspective. We saw that there are many ways to look at the market. We can look at capabilities and industry experience, strategic versus operational positioning, hard and soft aspects… But ultimately, consulting is about people that drive the culture and the skill set of a consulting firm. Understanding what a consulting firm is about and what value it brings will allow you to source the best consulting firm for your project and maximize the chances of success.
But today I wanted to chat about make or buy. So many of you have internal consulting groups, whether they call it like that or not. But how and when do you decide to include them in a competition?
So to help you decide whether it is better to use your internal or your external resources, remember to focus always on the benefits and the specifics of this particular project. When you are constrained by a limited operations budget, you must carefully prioritize and efficiently organize your projects, which may include external consulting services. But let’s go back to the very start. Shall we?
What are the different options for your project? So launching a project with internal resources is obviously top of mind for any executive because it means keeping the cost at a minimum and optimizing the use of your internal skills and resources. But this option can very quickly reach its limits if the project team is not given the appropriate time and responsibilities to lead the project efficiently. Besides, because the leaders of internal projects are often high-potentials on the leadership fast track, they might find it challenging to push boundaries. And confront the more established leaders and influencers who hold the key to their careers. And what is interesting is that when you assign an independent task force that can bring focus, speed, pressure to the table, which is sometimes enough for the success of the project.
So we saw the benefits of working with potentially an external team or an independent team, but how do we solve that make or buy dilemma? Make or buy is not new, right? Most companies and the procurement function work to optimize their internal spend and their pool of suppliers to better support the overall strategy. And they have already put in place some make or buy strategy.
And it means that they have solved some tough questions, such as what are the key activities that can be outsourced? What the pool of potential suppliers look like? How mature is the market for suppliers?, What providers are appropriate for us?and is it worth it to outsource a particular activity for the long term? So the same questions apply when you’re sourcing consulting services. Unfortunately, most companies have neither the experience nor the methods to answer them. Yet, today, all leaders throughout an organization from the head of procurement to senior executives, responsible for signing off on major consulting projects are expected to align their activities with the overall strategy of the company. So what can we do to have executives make faster and smarter decisions when buying consulting services? So when it comes to making those decisions about consultants, executives often fall back on word of mouth, perceptions of the reputations on various providers, all of the fancy claims the consultants are doing, and it’s true that they take the line of least resistance and simply hire the consultant they have used in the past, regardless of whether those consultants are the more appropriate for a particular project or for furthering the broader strategy of the company.
So why do they do that? Right? It’s because they have no reliable way to determine whether a particular consultant meets their company’s needs or to evaluate the likely level of performance of a consultant. And they have no benchmark against which compare providers. And until they find a way, an independent, credible way to assess providers and match them to the company’s needs, they are likely to lag the competitors who have.
What are the advantages of using external consultants? So, you know, consultants are usually familiar with the problem because they worked on many projects with many companies in many industries, therefore they can really solve that problem more efficiently and at less cost than internal resources. They can also make up for lack of internal resources and flexibility that prevents internal personnel from being diverted from their regular jobs.
So how can your company use the expertise of consultants? So, sometimes, you know, clients use consultants for broader purposes than the project itself, and that could include training of executives on new skills, introducing external change agents, learning best practices in the industry or capability. It can be exposing the organization to a fresh perspective or relying on the stamp of a recognized consulting brand to reassure board members and investors. But even under those conditions, hiring external consultants is not always the best solution. For example, consulting services that meet your needs may not be available in your industry or your country.
But on the other hand, leading an internal project can be tricky. The internal team may not be aware of the latest trends in the industry or the capability. They may waste time reinventing already well-established improvement methodologies resulting in longer projects and higher overall costs. And again, the fact that the team members are part of the company can make it difficult to disrupt the established order.
But is it really only internal or external? Actually, there’s a middle path that can you bring you the best of both worlds. And this is a hybrid execution. So let’s imagine a project. And in that project you have parts that can be isolated in standalone work streams where confidentiality and service availability will not be a challenge. If you have a highly experienced project leader, you outsource parts of your project and keep the rest in house.
There is a prerequisite: you need to centralize the category to some extent. It’s critical to be able to monitor your budget and centralizing the category will provide that capability. And actually some companies have responded to what is mostly a make or buy dilemma by centralizing consulting procurement. The goal is to have a more global vision of consulting efforts, a better understanding of the costs and more powerful levers to negotiate volume discounts and create synergies across functions and business units. When you recognize that consulting is an accelerator for change, you usually make consulting management the responsibility of the head of strategy and or a transformation leader. But more generally putting the accountability of the consulting budget and therefore the monitoring of the consulting expenses close to the group in charge of the strategy seems to be the right move. And that team will need to define what are the rules when procuring consulting services.
They should work on demand management, make or buy strategy and consulting spent analysis to make sure that the overall strategy is aligned with the spend and consistent across the board.
That’s it for today. Next time I’ll explain what are the main features of the European consulting market and why that diversity is a strength. In the meantime, if you have any questions or want to learn more about what we do at Consulting Quest, just send me an email at helene.laffitte @ consultingquest.com. You can also have a look at our website, smartconsultingsourcing.com to know more about our book and download free templates and guides to improve your consulting sourcing.
Bye and see you next week. Au revoir.

How big is your consulting Tail – 4 best practices to start tackling it

How big is your consulting Tail? – 4 best practices to start tackling it

The Tail Spend is the part of the spend that is not actively managed in a given spend category and might still impact the company’s performance through COGS or S&A. It contains a small portion of the spend (usually less than 20%) but represents many suppliers.

How big is your consulting Tail? – 4 best practices to start tackling it
Companies often tend to neglect the small consulting projects contracted directly by the business line managers. However, consolidated at the Company level, they can add up to 25% of the Consulting Spend.

“Many small streams make a big river.” – Danish proverb

Not much, you might say. But when the Consulting Spend can be 0.5% to 3% of the total revenue, any savings on this front can significantly improve your bottom line and delight your CFO.
 

READ ALSO
Demand management allows the teams to differentiate between the “must-have” and the “nice-to-have.” We have 5 tips to do it right!

The first question you can ask yourself to find out if you are managing your Tail properly is: “How big is my Tail? And what is in it? “
Mismanagement of the Tail Spend, independently of the category, usually involves the following elements:

A scattered supplier base
Decentralized purchasing behaviors where customers are buying on their own, and procurement is almost uninvolved.
A minimal supplier Qualification
No or minimal performance Evaluations
Limited or no category management

Consulting is no exception to that. However, contrary to other indirect categories, the absence of comparable elements and the projects’ diversity combined with the importance of interpersonal relationships can make it challenging to optimize and control.
1. Consolidate Your Supplier Base with Caution –
One of the levers used to manage the spend is to consolidate the number of suppliers. Some companies have applied this methodology at the Category level. Suppliers have to be qualified for a given category, and the number of suppliers per category limited.
What starts well can end up with a sound failure if you don’t consider the specificity of the Consulting category. If your sub-categories are not granular enough, you might end up with a handful of large one-stop shops. Price increase mechanically, erasing the savings made by the cleaning-up of the Tail Spend.
2. Effectively Manage the Variety of Projects –
To help you organize and manage the various projects, it’s best to sort them out into 5 categories:

One-time projects. One-time projects are the core of your Tail Spend. They are usually small projects with a clear scope and little likeliness of sequel. (Think diagnosis or workshop facilitation)
Recurring projects. Recurring projects are, most of the time, medium-sized projects designed with a repeat model. (Think pulse survey, voice of the customer, benchmarking, coaching)
Never-ending sequels. You have certainly already seen one of these large projects designed in small chunks to fly under the radar. (Think one diagnosis per plant, any project reaching phase 4 and more)
Duplicate projects. Several business units or departments can contract small or mid-sized projects with similar scopes and methodologies. They can be performed by the same or different consultancies.
Externalized workforce. The consultants can also be hired to bypass too stringent HR rules or compensate for lack of internal expertise punctually.

3. Use the right levers to tackle the Tail Spend –
To efficiently clean-up your Tail Spend, you could use many levers, but the below selection should probably give you a good 80/20.

Gather data on previous projects.

The main challenge for most companies when facing the Tail Spend is to clearly identify the projects in the Tail and cluster them into manageable sub-categories.
If your organization is decentralized, you will need to get the support of the different parts of the organization to make sure that you have “clean data.” If you haven’t performed a spend analysis, maybe now is an excellent time to launch it.
Interview the project sponsors and leaders to identify high- and low-performers.

Regroup what you can.

Recurring and duplicate projects are good candidates for strategic management and should not be treated as the Tail. How about a frame contract on coaching or a cross-business-unit RFP for excellence programs or digital transformation?

Develop your knowledge of the local Consulting market.

An excellent way to keep control of the Tail without spending too much time on the management is to have at hand a list of additional providers. By exploring the local Consulting market, you will be able to identify potential suppliers and develop relationships. That will allow you to be reactive when one of your business lines wants to launch a one-time project on a given sub-category.

Fine-tune the rules for the tail projects.

To maintain your Tail Spend reasonable, and make sure you are not building up another false tail, you need to set up workflows with the right agile check and balance and chase the false Tail
4. Launch your Tail Spend Project right –
Below we have listed a few proven steps you can take.

Evaluate the size of the prize

First compulsory stop on your journey: evaluate the potential savings and improvements to expect. We have stressed many times the importance of creating value. You need to make sure that there is more to gain with the project than what you are spending.
It is the right moment to start gathering data about the different projects to build a solid overview of your Consulting Spend. Depending on your Procurement practices’ maturity, you can expect between 5% to 40% savings on your Tail Spend.

Get the buy-in of key managers

One thing is sure – if your managers don’t believe in your project, it will never happen. You need to develop a sense of urgency, or in other words, demonstrate why it is essential to launch and implement the project now.
Develop a compelling story to tell your key managers and convince them—leverage meetings gathering your top leaders to explain that small streams make big rivers. The efforts from all of them may seem insignificant taken separately, but altogether they are worth the effort.

Design the battleplan and confirm the stakes

Like any large project, you will need to define how you will proceed. It means having a project team, governance, and a clear work plan. Then start analyzing in detail the consulting spend and the past performance of your providers. You can now refine the stakes lever by lever.
Some of the projects that you led in the previous years were not strategic or redundant. You can probably take most of that part of the spend out of the equation. Grouping projects and negotiating on larger volumes can allow you to secure 10 to 30% of the costs.

Identify and involve the most impacted Executives

Some of your Executives will be directly impacted by the project, particularly those who use Consulting regularly. Through your Tail Spend analysis, you will identify the individuals or departments spending a lot on small projects.
When you have identified the most impacted Executives, take the time to listen to them to understand why they are buying Consulting Services in small bulks. There could be many good reasons why they would work that way. Think broader than procurement itself. The roots can be in strict HR policies, local management decisions, regional culture, etc.

Formalize the case for change and the communication plan

Take a step back. You have created a sense of urgency in your top management team, defined your implementation plan, and worked with the most impacted Executives to design the right solutions.
You should now organize your findings in a well-built case for change to minimize resistance to change and make sure you capture the most value from your Tail Spend projects.
 
Most successful companies start small. Of course, you want to adopt a medium-long-term mindset to make the savings (and the change) sustainable. But modest quick gains can ease the way, convince the last diehards, and capture enough savings to have a self-paid project

Author detailsAuthor Bio

Hélène Laffitte

Co-founder & CEO at Consulting Quest

Hélène is the author of Smart Consulting Sourcing, a step by step guide to getting the best ROI from your Consuting. You can follow @helenelaffitte on Twitter.

View Profile

Mail Me

Call Me

Hélène Laffitte is the CEO of Consulting Quest, a Global Performance-Driven Consulting Platform and author of “Smart Consulting Sourcing”, a step by step guide to getting the best ROI from your consulting. With a blend of experience in Procurement and Consulting, Hélène is passionate about helping Companies create more value through Consulting.

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Consulting sourcing tips

Podcast | How to Avoid Potential Problems in the Course of a Project

4 best practices of category management that will help you create more value from your consulting

Podcast | What are the main features of the European Consulting Market

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Previous Weeks’ issues

This Week In Consulting: Post-Covid outlook on Transportation and Logistic

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, March 24th ,2021 , All you need to know about How do you adapt your risk management for tomorrow.
read more

This Week In Consulting: Bringing your digital marketing to the next level

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, March 24th ,2021 , All you need to know about How do you adapt your risk management for tomorrow.
read more

This Week In Consulting: The manufacturing industry post Covid

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, March 24th ,2021 , All you need to know about How do you adapt your risk management for tomorrow.
read more

Choose the best next step for you

Buy the Book

Talk to usWe are always open to a discussion. Just book a 30-min virtual coffee with us and let’s get the conversation started
Book a call

Podcast | How People Shape the Consulting Market and Your Perspective

Having a good grasp of the supply market is key to get the best Sourcing outcomes.How many Consulting Firms serving your industry can you name? They are many ways to look at the consulting industry, but ultimately it is about the people.
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains how people shape the Consulting Market and your perspective .
Key Takeaway: Most client organizations look at the consulting industry only through the capability/ industry experience lens. They are often missing the other dimensions such operational vs strategic, local vs global, etc…Understanding what makes a consulting firm, and who are the people behind the brand is essential to source the right provider for your project and maximize its impact.

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Connect with other Consulting Buyer to step up your game

Connect with other Consulting Buyer to step up your game

Among many professionals, the temptation to work alone, without the support of peers, is high. Innovative business people understand the need for connections with peers, with consultants, with journalists, and with the public at large. Great professionals need to build a network of peers, learn from experience of others, reach collective critical mass, get sparring partners, cherry pick best practices, and stay current on the latest trends.
The situation of procurement professionals and particularly the one of those in charge of procuring consulting services falls into this category. Procuring consulting services is quite different from procuring goods. Consulting is a complex industry often described as a matrix of capabilities and industries. Just add a layer a hard and soft skills. A zest of fee structure. And you have got yourself in the shoes of many Consulting Procurement leaders. They need to connect with peers to be able to exchange about their daily challenges with people who can actually understand what they are facing.

Source Consultants

The easiest solution is to look into your pool of existing providers, and choose pick from them. However, the best consultant for one project is not necessary the best for the next one.

Read More

1. Build a Network of Peers
Even though Companies can have a significant budget for Consulting Projects, most Consulting Procurement executives handle a limited number of project in relative isolation.  Many of them have been trained with core-business procurement, or indirect procurement. So, when facing consulting projects, they are very tempted to reinvent the wheel each time, or to just apply the sound principles that they have learned in their previous jobs. Just like this procurement leader, working in a railway company, who insisted in adding a 10-year guarantee clause in a consulting agreement, “because that is the company policy”.
Rather than just seeking consulting procurement information through only books and online material, find ways to connect with peers in your industry. Trade shows, a community of practice, professional organizations, and firms who specialize in networking consultants with clients are all important tools to connect with peers.
2. Learn from the experience of others
Exchanges with peers from diverse backgrounds, culture and activities give professionals the ability to discover new perspectives on consulting procurement, and learn about cases that you haven’t face yet. Increasing your surface of exchange will increase your exposure to the variety of situations faced by your peers.

And who knows. Someone in your network may have faced the same challenge…
This increased surface area multiplies the opportunities for growing as procurement leader by learning from practical cases, sharing challenges and identifying best practices. You can learn from peers, academics, journalists, as well as consultants. This community of learning empowers you to not only increase learning, but facilitates the reach of critical mass.
3. Reach Critical Mass Collectively
Many rare skills, such as consulting procurement, are acquired and maintained on the field through facing again and again the same issues. As a business professional, your services are limited by your ability to access enough information to identify trends and best practices in your field. It is hard to reach that critical mass of information to allows you to master your skill.
With more peers around the table, you accelerate the building process and guarantee that you are able to reach that critical mass collectively. Through your peers, you each gain momentum and reach the critical mass necessary to succeed faster.
4. Get Yourself Sparring Partners
Not only does collaboration increase learning about specific situations and projects, it helps you improve your internal processes at a faster rate as well. Two heads are better than one, and two sets of hands go faster. Although it feels risky for business leaders to open themselves up to even one peer, let alone a network of peers, the open source revolution in software and computing shows the power of collaboration in a field which was driven by secrets and control for many years.
Sharing about Consulting Procurement does not mean you risk to lose your competitive advantage or breach confidentiality, because you can just decide what you share. Good networking merely takes others’ work and integrates it with your own business so that everyone is empowered to grow more. Networking defines relationships based upon the level of connectedness you have with your peers: the more connected you become, the more meaningful the interactions become.
5. Cherry Pick best practices
A key part of building a network of peers and increasing your collaborative processes is to be able to identify the best practices as a group. Before integrating in your own processes, think about how it would fit with your strategy, your organization and your existing policies and what impact it would have on other processes.
Let’s say you have heard that Wenowatwedoo, a leader in your industry, is using independent consultants for their needs for marketing excellence. You immediately think you should do the same. But what you don’t know is that Wenowatwedoo has a dedicated team in charge of Marketing Excellence made of former consultants. So for that specific needs, they merely need arms and legs to complement their team, where your company would need the whole team of marketing excellence. Excellent best practice, but not for you.
Cherry picking on what consulting other companies have used might be the most difficult exercise as it requires a fit with your context and strategy but there are many other process elements that can garner tremendous value without presenting the same challenge. But on managing confidentiality, scoping projects, sourcing, selecting consultants, negotiating fees, using creative fee structures or measuring consultants’ performance, there are many levers that can help you to professionalize your own practices.
6. Stay current on the latest trends
Your needs for consulting are changing every year to adapt to new strategic context, to new opportunities opened by new technologies, etc. You have to stay current on the latest trend and be connected with academics and thought leaders. This will give you the ability to spots threats and opportunities early on, and anticipate the impact on your field.
Besides, keeping up-to-date with your industry is key for building expert power and earn the trust and respect of the other executives in your company.
Connecting with peers is part of your development as a professional, it will help you in getting better at your job, become the go-to partner for the executives of your company, and provide you with sparring partners to call when you are facing a tough challenge. It will give you the keys to enable deliver quality procurement services for your business, to get more value of your consulting spend and to create more value for your company. On a personal level, you will have the opportunity to develop meaningful relationships with your peers.
So now the question is … what are you waiting for?

An African Consulting Market already significant and with huge Potential

An African Consulting Market already significant and with huge Potential

Welcome to the first issue of our New Blog Series – “Exploring the African Consulting Industry”. In this series, you will learn “everything-you-need-to-know” about the African Consulting market through a set of fun infographics.

Know the Market
In 2016, the Consulting Industry in Africa was valued at $2.2 billion. Although the market is relatively small in terms of size from a global perspective, it has grown strongly over the past years, with a 6.3% growth rate. The African consulting market is bigger in size than many of the European markets such as that of Spain and Italy.
Consulting services can be found in over 30 markets in Africa. The Top 3 Locations with the greatest number of consulting firms are: 1) South Africa, 2) Nigeria and 3) Morocco.
Among these regions, Southern Africa alone makes up around two thirds of the Africa’s entire consulting market. Africa continues to position itself as an attractive geography with a double-digit growth in West Africa, particularly in Nigeria, and East Africa, benefiting from the reduced attractiveness of the Asian countries.
The African market as a whole is forecasted to continue its impressive growth, thanks to the rapidly growing economy and governmental push on innovation. Despite of being a market with a huge potential, there are risks for consulting business in the region including political stability and difficulty in getting paid.

t

Consulting Quest Global Directory
Consulting Quest Global Directory is the World’s Largest Professionally-Managed Directory in the Consulting Industry. Searchable by consultancy name or by region, capability or industry, it lists and describes more than 6000 consultancies worldwide, with links to their websites and social media channels. With such a powerful database, we decided to dig deeper into the directory and analyzed the consulting offering in each of the following regions of the world: North America, Europe, Middle East and Africa, Asia-Pacifics and LATAM.

This Week in Consulting: All you need to know about Design Thinking

This Week in Consulting

Wednesday, November 13th 2019

All you need to know about Design Thinking

THIS WEEK’S MUST READ
“Design Thinking is not an exclusive property of designers—all great innovators in literature, art, music, science, engineering, and business have practiced it. So, why call it Design Thinking? What’s special about Design Thinking is that designers’ work processes can help us systematically extract, teach, learn and apply these human-centered techniques to solve problems in a creative and innovative way – in our designs, in our businesses, in our countries, in our lives.​”
The ‘Design Thinking’ is a description of the application of the well-tried design process to new challenges and opportunities, used by people from both design and non-design backgrounds. How to use design and design thinking for innovation and better results?
This Week’s Must Read  is an insight piece from Interaction Design Foundation (IDF) where the authors help us to understand Design Thinking by breaking down the process into five phases
Read on to Find out More: “What is Design Thinking and Why Is It So Popular? “ | Rikke Dam and Teo Siang, Interaction Design Foundation.

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THIS WEEK’S VIDEO:

Design Thinking is a 5-step process to come up with meaningful ideas that solve real problems for a particular group of people​​.

THOUGHT LEADERSHIP

Why Design Thinking Works? “In a recent seven-year study in which I looked in depth at 50 projects from a range of sectors, including business, health care, and social services, I have seen that another social technology, design thinking, has the potential to do for innovation exactly what TQM did for manufacturing: unleash people’s full creative energies, win their commitment, and radically improve processes.” Here the author explains how human behaviors can get in the way of innovation and how design thinking tools and clear process steps can help teams break free of them. | Jeanne Liedtka, HBR
Maximizing Digital Transformation Innovation -Design Thinking: “With the evolution of technological advances, organizations need to transform to address rapidly changing business landscapes, which is the main reason why digital transformation is so crucial for companies that enables to redefine the complex business process into simple and innovative solutions that helps business executives focus more on business results, innovation and continuous development.” This article shows how the design thinking approach could help launch a wave of innovation in technology and digital disruption. | SatishKumar Boguda and Shailaja Arsid, IJERT
Design Thinking as a Strategy for Innovation: “Designing is more than creating products and services; it can be applied to systems, procedures, protocols, and customer experiences. Design is transforming the way leading companies create value.” The author presents an interesting point of view on how the success rate for innovation dramatically improves when design principles are applied to strategy and innovation. | Linda Naiman, Creativity at Work
Why Design Thinking is Relevant? “In many ways, design thinking is about having a methodology that helps you feel comfortable wading into the messy complexity of creating something new to the world. The better you get at it, the more you’ll build creative confidence to take on bigger challenges.” Why is design thinking relevant to the challenges we’re facing today? An interesting interview with David Kelly, the founder of IDEO. | David Kelley, IDEO

TRENDS
On the same theme,here is a selection of conferences that you might find useful
 
NEXT: the conference on innovation through design thinking : NEXT is the annual event dedicated to innovation through design thinking for all those who want to transform their company and who are looking for concrete and applicable solutions to successfully implement.
 
Design Thinking Conference 2020 : For Design Thinking professionals who practice what they preach in their own organizations or with other organizations.

CONSULTING INDUSTRY NEWS

FinTech Company OKLink Wins Deloitte “Hong Kong Rising Star”: “LEAP Holdings Group Limited (“the Group”; Stock code: 1499) is pleased to announce that OKLink Fintech Limited (“OKLink”), a wholly-owned subsidiary of the Group, was awarded the “Hong Kong Rising Star” by Deloitte in 2019 HK Tech Fast 20 and Rising Star Program on 8 November 2019.” | Marie Jones, Business News Asia
KPMG launches innovation scale-up with Axillium partnership: “As clients look to tap greater levels of government support for their research and development efforts, KPMG has forged a new partnership with research and innovation agency Axillium. The Midlands-based firm has supported nearly 200 organisations to move their innovation programmes forward and helped raise more than £210 million in government grant funding.” | Consultancy.uk
HSBC and RBS set to launch new digital banking platforms: “HSBC rolled out a new app-based business banking service – previously known internally as ‘Project Iceberg’ and now named ‘HSBC Kinetic’ – in beta testing mode on Monday, while RBS is putting the finishing touches to its new digital bank Bo ahead of a public roll-out later this month.” |Iain Withers, Sinead Cruise, Reuters
P&G Aims For Lasting Social Impact With NatGeo Series: “While brands have been an integral part of television since the dawn of the medium, typically as sponsors, P&G is aiming to take that relationship to the next level by helping to produce a new cable TV series.” | Diana Marszalek, The Holmes Report

DIRECTORY
The Consulting Quest Global Directory is the largest professionally-managed directory in the consulting industry. Searchable by consultancy , name or by region, capability or industry it lists and describes more than 6000 consultancies worldwide with links to their websites and social media channels.
 
 

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CONSULTING SOURCING TIPS

Everything You Like to Know About In-House Consulting and How to Optimize Your Internal Consultants’ Potential
Your internal consulting, transformation team, or excellence group, is a great asset that can make every project a success. The ...Read More

3 Best Ways to Measure Consulting Performance – In Short, Medium & Long-Term Formats
Let's start with the question - How important is measuring the performance of Consulting Services' providers? For Consultants - as ...Read More

The 13 Key Steps in Demand Management Implementation
Demand management is a critical tool for procurement professionals and companies in general. Its implementation for the consulting category is ...Read More

About Consulting Quest

Consulting Quest is a global, performance-driven consulting platform founded in 2014 by former members of top 10 consulting firms with the objective of reinventing consultancy performance. With a worldwide presence and a range of proprietary performance measurement tools, we help companies navigate the consulting maze. We work with Consulting Clients to increase their performance through consulting and Consulting Providers to help them acquire new clients and to improve their performance.

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Successfully Managing the Life of the Project While Developing a Great Relationship with Your Consulting Firm

Successfully Managing the Life of the Project While Developing a Great Relationship with Your Consulting Firm

“In many ways, effective communication begins with mutual respect, communication that inspires, and encourages others to do their best.” – Zig Ziglar

Positive and mutually beneficial relationships with business partners, clients, and collaborators are an essential part of every project. And effective communication is a crucial ingredient in every relationship.
So let’s talk about how having a great relationship with your Consulting provider can substantially benefit the project.
 
Best Tips on Building a Great Relationship and Managing the Life of a Project
We have mentioned previously the importance of collaboration with the consulting firms to maximize the chances of success of the project. When the consulting partners are considering your company a “good client,” they will do their best to deliver the best work, assign their best teams, and remit their best price

Read also...
How to prioritize Consulting projects? How to make sure to spend on the right projects? If you keep asking yourself these questions, we have some great tips.

Learn more

1. The main goal is to create a mutually beneficial relationship –
At its core, consulting should be based on a mutually beneficial partnership. If you treat procurement as a linear process that ends the moment the contract ink dries, you will probably have trouble getting the best possible results out of that partnership. Try, instead, treating the relationship as dynamic and flexible throughout the project. You and your consultants will both benefit and improve their business practices as a result.
The truth is that if you treat them fairly, there is a good chance that they act the same way. Expect them to deliver their work in time and quality. Treat them like partners that have a common objective. Give them feedback, good or bad, on their performance. Give them visibility on payments. Be thorough, but don’t dance on the head of a pin.

2. Manage the life of the project-

No matter how hard you try, establishing and maintaining a relationship with consultants in executing a project will not be a linear process. During a project, some changes will take place that you didn’t account for during the proposal or contract. Whatever happens during the project, make sure you trace the most important events.
Keep track of the changes, such as:

Scope changes

You might have to add new tasks as a need becomes clearer or drop deliverables that turn out to be impossible or difficult to reach.

Staffing changes

Organizations are in constant flux, and both sides may have to account for a turnover that requires adjustment and additional training.

Timeline changes

Everything, before the project starts, is an estimate; you may have to adjust the pace as the actual duration of the project comes into view.

Unforeseen events

Budget changes, project merges, project freezes, or any other events may occur that affect the execution of the project.
Change management is necessary to ensure that these changes do not derail the project. When the changes are significant and impact the scope and the deliverables, you should consider amending the contract. For other cases, the minutes of the Steering Committee where the decision was taken should suffice.
Any interaction with the consultants, especially when the performance is not right, should be traced thoroughly. Make sure to keep the minutes of the meetings and share them with the consultants timely.
3. Measuring Performance –
For projects longer than three months, we recommend organizing a mid-project assessment. As early as possible, set yourself and your consultants a benchmark toward the middle of the project. It is the perfect time to review the current scope and deliverables and check if they are still in line with the objectives and the current business environment.
Before the meeting, collect the feedback from the main stakeholders, and prepare a summary to share with your consulting providers. The input should cover the traditional project management performance dimensions, such as project completion, planning, etc., but also a more qualitative aspect such as behavioral dimensions, impact, or skills adequation.
As you get into the details of any project, it’s easy to get carried away with minutia that ultimately won’t affect the overall success. A Mid-Project Assessment enables you and your team to ensure that these inevitable tangents don’t endanger the timeline and the success of the larger project.
The Mid-Project Assessment should be a major event for everyone involved. Keep it separate from regular operational project reviews, which should happen in smaller circles and regularly. However, you can organize regular check-ins dedicated to the project reviews to anticipate the potential issues, and give the Consulting Firm the opportunity to fix the problem as soon as it appears.

4. Risks to avoid – Don’t drop the ball towards the end-

One of the most common mistakes when using consultants is to drop the ball towards the end of the project. Here is what happens and why it should be prevented: Reports get shelved. Information is being poorly transferred. People often oppose the project step-in to torpedo it one last time. Making sure the results will stick, requires specific attention, dedicated efforts, and it affects the overall success of the endeavor.
As the project is completed, make sure all deliverables and services are received and don’t make the final payment before verification. As a good practice, the last step in the reception and acceptance of the project is to perform an end-of-project assessment.

Ready to get started on your next project?
Need a fresh point of view? We will be happy to help.
Please give us a call today at no obligation. Let’s get the conversation started
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Understanding the consulting market will help you source the right consultants

Understanding the consulting market will help you source the right consultants.

We often describe the consulting market with the capabilities and the industries served. And most consulting firms will start there to introduce themselves. But this is just scratching the surface.

Understanding the consulting market will help you source the right consultants.
The Consulting Market is extremely diverse and complex. And to understand its structure, you will need to take a much deeper dive into what markers “make” the structure.

“He who would search for pearls must dive below.” – John Dryden

I won’t teach you that having a good grasp of the supply market is key to get the best Sourcing outcomes. But if I ask you how many consulting firms you can name, most Executives cannot name more than 10 to 15 rather large companies.
And Procurement Executives don’t necessarily score better at that little game.
Let’s have a quick look at how the market is structured and how you can use that knowledge to choose the right consulting firm for your projects
 

READ ALSO
The pressure on operating budgets is tremendous, and client organizations must define what project to launch and how. Thinking about implementing make-or-buy strategies to consulting services? Need an expert perspective? We will be happy to help.

How is the consulting market structured?

Vast Scale – The overall management consulting market is estimated at approximately $250 billion worldwide, with a CAGR of roughly 6%, clearly outpacing GDP in all countries. At this pace, the industry is expected to break the $300 billion by 2020.

Size of Consulting Companies – There are roughly 10,000 Consulting Firms globally, representing 250,000 consultants, without the independent Consultants. As a rule, large Consulting Firms tend to be one-stop shops (offering all capabilities and industries in most geographic regions). At the same time, smaller companies are often focused on one or two dimensions only.

Richness and Diversity – Most Procurement Executives are looking at the consulting market through the capability/industry lens. They know that one-stop shops such as Mc Kinsey, Bain & Company, Booz Allen, Big 4, and consorts can cover the full spectrum. They identify a few other players focused on one capability or one industry.

Strategic and Operational Dimension – Another effective way to screen the consulting market through the Strategic Operational dimension. Strategic Consulting is about high-level strategy, transformation, large organization projects, very often at the highest level of the Company, as opposed to more operational projects such as lean, team effectiveness, purchasing, etc.

Hard or Soft Approach to Capability – Sometimes, the same capability can be approached with either a Hard or a Soft angle. If we take as an example the org design capability, Hard would be org charts, job descriptions, processes, handbooks while Soft would be team alignment, culture, change management, and talent.

And many other dimensions can be used to screen the consulting market: Strategy Players with a touch of digital vs. Digital Players with a zest of strategy, Global vs. Local, Blue Chips vs. SMEs, Diagnosis Experts vs. Implementation Specialists, etc.
How important is the human component of consulting?
Consulting Firms are rarely present on the whole spectrum for one dimension, even the large ones, but the odds are quite high that whatever your problem is, there is a Consulting Firm focused on it.
People make all the difference – as surprising as it may sound, identifying a Consulting Firm with the right expertise only gets you half-way there.
Consulting is a human-to-human service, and consultants are not commodities. To better source a project, executives need to understand who the people are behind the Consulting Firms and to assess the fit with your Company’s context and culture.
The background of consultants can be essential to understand the type of projects they can work on. For instance, life-long consultants will bring you perspective and benchmark, while former executives can bring you hands-on experience.
If you want to accelerate the execution of a project and mobilize a significant amount of resources in a top-down fashion (post-merger integration, for instance), large firms with their pyramidal organization and their structured processes and methodologies can be the right fit.
Suppose you want to align and embark your management team on a disruptive transformation. In that case, you may want to leverage a boutique firm’s expertise and seniority that can customize on the fly their methodology to maximize appropriation.

How to find the right match for you and your specific case?

Evaluate the Consulting Company on all dimensions

Understand their range of projects

Pinpoint where their value lies

Assess their proposal with reasonable expectations

Sourcing the right consulting firm is key to get the best outcomes from your consulting project. Understanding how consulting is structured will certainly allow you to improve the results of your sourcing efforts.

Author detailsAuthor Bio

Hélène Laffitte

Co-founder & CEO at Consulting Quest

Hélène is the author of Smart Consulting Sourcing, a step by step guide to getting the best ROI from your Consuting. You can follow @helenelaffitte on Twitter.

View Profile

Mail Me

Call Me

Hélène Laffitte is the CEO of Consulting Quest, a Global Performance-Driven Consulting Platform and author of “Smart Consulting Sourcing”, a step by step guide to getting the best ROI from your consulting. With a blend of experience in Procurement and Consulting, Hélène is passionate about helping Companies create more value through Consulting.

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Consulting sourcing tips

Podcast | How to Avoid Potential Problems in the Course of a Project

4 best practices of category management that will help you create more value from your consulting

Podcast | What are the main features of the European Consulting Market

Your browser does not support the video tag.

Previous Weeks’ issues

This Week In Consulting: Post-Covid outlook on Transportation and Logistic

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, March 24th ,2021 , All you need to know about How do you adapt your risk management for tomorrow.
read more

This Week In Consulting: Bringing your digital marketing to the next level

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, March 24th ,2021 , All you need to know about How do you adapt your risk management for tomorrow.
read more

This Week In Consulting: The manufacturing industry post Covid

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, March 24th ,2021 , All you need to know about How do you adapt your risk management for tomorrow.
read more

Choose the best next step for you

Buy the Book

Talk to usWe are always open to a discussion. Just book a 30-min virtual coffee with us and let’s get the conversation started
Book a call

Consulting Playbook: A Smarter Growth Approach in Reducing SG&A Costs

Consulting Playbook: A Smarter Growth Approach in Reducing SG&A Costs

The Consulting Playbook, Edition #12
A leader in the Commodities Market, despite experiencing double digit growth needed an expert’s advice as their SG&A expenses grew at a proportionate rate as well. This fact was alarming as their major competitors successfully reduced their SG&A expenses.
The organization decided to engage a consulting firm to help analyze the reasons for the SG&A increase, and make the shift in breaking the cycle, improve SG&A efficiency and control, by finding the main drivers behind the higher SG&A costs.
Top Down and Bottom Up Approach Successfully Applied
The Strategic Approach of the Consultant centered on establishing a competition benchmark, setting up a clear cost baseline and proposing sizing down levers. The top-down method was combined with bottom-up approach to fully identify internal gaps, set new goals, and explore new savings opportunities. Also, business performance specific levers were identified, with the ultimate goal to reduce costs, and a new plan was designed for implementation with a full sizing model.
The levers analyzed consisted in a combination of the following: adjusting service levels and implementing demand management, centralizing indirect purchasing, reviewing the make or buy for SG&A scope, consolidating for scale and implementing shared service centers, offshoring some activities, renegotiating contracts, optimizing the organizational structure, rationalizing the footprint as well as some working capital measures.
The major impact on the organization produced the following results:
The organization significantly improved its understanding of SG&A cost evolutions and put in place the necessary actions to progressively reduce the costs escalation, place costs under control and ultimately achieve a cost of reduction of approximately 20% on run rate vs their strategic plan. In addition, the findings pointed out a bigger issue – a clear sign of growth crisis.
Part of the SG&A costs savings were allocated to growth initiatives resulting in an EBITDA growth at twice the market rate.

Additional Information

How Management Mistakes Can Hurt SG&A Costs Savings?
All businesses are concerned with strategy and the best approach to reducing SG&A costs while boosting profitability. We would like to take a brief look at the mistakes many businesses make, and common things they overlook.
There are several factors that can influence costs, such as political events, economic uncertainty, company’s financial situation, and many more. Management should be looking at short-term and long-term measures to achieve desired results.
Mistake #1 – Unjustified Large Cuts or Increases in Costs
This approach is a bit tricky and often overlooked. In a period of recession for example, companies will cut cost to preserve profit margin, however in recovery they will not make the necessary adjustments to boost growth. It’s important for executives to be very selective which expenses to cut without hurting sales volumes. Being strategic about across-the-board cost cuts, and identifying costs that don’t promote growth, must be a top priority.
Mistake #2 – Broad Cost Cut Mandate
Applying a broad cost mandate can lead to disappointing results. What often happens is that if all costs are treated equal without differentiating their effect on growth, costs like procurement can be affected. The smarter approach would be to manage SF&A specifically in relation to their importance to top-line and bottom-line. Flexibility and better understanding of types of costs, will be very beneficial.
Mistake #3 – Benchmarking Approach
The Benchmarking approach has its benefits; however, it also has some minuses too. While it provides a solid basis to align by, it doesn’t determine accurately enough which costs to regulate for a long-term growth. Also, when benchmarking compare performance by company size and industry, it misses to identify the difference in strategy and the specific factors that affect growth and cost structure.
For Further Reading –
– Globalization and New Strategies for Growth
– Three Strategies for Achieving and Sustaining Growth
– How do you create new growth strategies?
– Five ways CFOs can make cost cuts stick
– The Importance of Sustainable SG&A Cost Cutting

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About The Consulting Playbook
The Consulting Playbook is a collection of posts designed to offer insights into how businesses and their executives can utilize consulting as a strategic lever to boost performance. Each Consulting Playbook post is broken down into a few elements: Case Study, Additional Information regarding the technical application, and Additional Links related to the topic.

How to Best Define Your Procurement Strategy: Pillars & Pitfalls

How to Best Define Your Procurement Strategy: Pillars & Pitfalls

We should probably start with a definition of Procurement Strategy –
A successful Procurement Strategy for the Consulting Category requires a good understanding of the overall Strategy, the Consulting Market and the past performance within the category. It has to be in line with the Procurement Guidelines, and custom-made to Consulting.
We have reviewed below the ‘pillars’ that can produce effective outcomes, and pitfalls to try to avoid.
Feel free to apply what suits best your specific vision and policy

Optimize your Consulting Spend

The journey toward maturity of Consulting Procurement Capability is infused with challenges. It’s all part of the process. However, there is always a better way to face the challenges ahead.
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our Consulting Strategy

Halfway between Strategic planning and Demand Management, one of the overlooked levers is to define a Consulting Strategy.
This Consulting Strategy aims at identifying the key projects or project areas where using consultants will accelerate your strategic objectives and create the biggest impact. Once defined and planned over a period of 12 to 24 months the consulting strategy will help in guiding the teams towards the key actions supporting your strategy, and alternatively will indicate areas where a lower effort should be engaged.
Pitfall – failing to provide a proper time frame, delegating extra effort or human resources to projects that are smaller, or not enough resources, can backfire.

Choosing Between Make-or-Buy Strategy

Defining a Make-or-Buy Strategy is another key step in establishing the Procurement Strategy for the Consulting Category.
The Make-or-Buy Strategy is very closely linked to Demand Management, and both matters should be (re)evaluated altogether.
The goal here is to come to an improved, more effective decision-making process, often including a decision framework and a decision matrix.

This framework allows deciding what projects should be prioritized and what is the best execution model for each project.
As an example, think of a major transformation exercise for an insurance company across all sites in Asia to implement new development methodologies inspired by the lean startup and the scrum principles.
The consulting firm could provide all resources for the project, or you could decide to implement a hybrid team mixing external consultants and your own in-house scrum masters.
Pitfall – Missing out on fees’ reduction due to the inadequate decision process, weak buy-in from the teams, and uneven knowledge transfer from external firms.

Your Preferred Supplier List & Master Service Agreements

One of the Strategies that can be extremely efficient in Consulting, like in other categories, is to build a Preferred Supplier List.
It is based on the fact that 80% of your needs are usually covered by 20% of your Suppliers. You can anticipate what Suppliers will be engaged, when and how, by looking at both your past Expenses and the strategy for the years to come.
With these “Preferred” Suppliers, you can start negotiating Frame contracts, or Master Service Agreements, including pre-agreed terms and conditions and volume discounts.
Pitfall – not having clear expectations, or deficiency in the list of Preferred Suppliers can affect the projects’ success in various ways.

When and How to Do a 2nd and 3rd Tier Consulting Firms Integration

It can be quite beneficial to leverage 2nd, and 3rd Tier Consulting Firms (small to mid-sized) to decrease the average costs and cover the niche and/or very operational needs from your business lines, and help you get control of the Tail Spend while optimizing the ROI.
Pitfall – Do not miss out on identifying specialized niche providers who can deliver excellent performance at lower rates, that other general providers won’t.

Your Consulting Procurement Process

 “If you can’t describe what you are doing as a process, you don’t know what you are doing.” – W.Edwards Deming

To set the process on the right track, you can start with RFPs. They are an amazing tool for buying Consulting Services. You should always write an RFP, even a simplified one. Why? Because it sets expectations like the scope and the deliverables.
In that specific case, writing an efficient RFP will maximize not only the performance of the procurement but also the chances of success of the project.
You might also want to segment the projects based on the size, the strategic importance, the potential impact and/or the complexity to define what will be the process: RFI or not, simplified RFP or not, competition or not, procurement support or not.
Pitfall – Make sure you leave room in your RFP to the Consulting Firm to bring innovative ideas and approaches. Lack of clarity in your expectations and the criteria of evaluation in the RFP, might not produce the best proposals.
And as a final piece of advice, once you have identified your preferred Consulting Firm, do not forget to formalize the agreed expected deliverables, terms and conditions in a separate Statement of Work (SoW)

How does your Procurement Strategy look like?
Do you want to learn about how to get started or just want to discuss further Procurement Strategy.
Do not hesitate to contact us today.
We’d love to hear from you!
 
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Getting the Best of Both External and Internal Consulting-Is Like Getting a Special Night at the Louvre

Getting the Best of Both External and Internal Consulting-Is Like Getting a Special Night at the Louvre

Airbnb and the Louvre are teaming up for a special campaign that offers an unforgettable night with exclusive visits at the museum, to one lucky winner who likes to travel and is passionate about art. It definitely sounds like a fresh and exciting idea! The same idea of combining the best of two different worlds pretty much applies to Internal and External Consulting.
Every business leader should be able to select and work with the best consultants for each project, regardless of whether they come from an Internal Consulting group, or an External Consulting firm.
And every business situation at hand, in some cases will be better served by the Internal group, and in other cases, the External Consultants will provide the expertise the Organization lacks.
We can safely say that both types of Consulting have advantages and disadvantages, and it all comes down to making the best selection when evaluating which experts are the best fit for your project.

Read also...
Markets and conditions constantly change, but a progressive system of evaluation of Consulting projects, established within your organization, can produce desired results on a regular basis.

Learn more

6 Points to Consider When Working with Internal Consultants–

Identify your Consulting needs in the next 3 to 5 years and consider developing an efficient Internal Consulting Group to serve these needs.

Establish a clear value proposition for your Internal Consulting Group in order for them to deliver sustainable results. Even though you want the group to remain flexible, their core expertise and focus have to be very clear. The group should describe the topics where their knowledge will have the most significant impact but also the subjects they will not touch under any circumstances.

The group has to demonstrate its value to the rest of the organization. The group has to win projects thanks to a superior impact on the organization.

When projects have failed, many companies appear to have tried to force using the internal Consulting Groups. The exact opposite effect happens then, and the Internal Groups is singled out as the root cause for project failure.

Funding of the Internal Consulting Group – even though the team could be set up through an injection of corporate funds, they need to be able to fund itself by charging the internal clients. If the internal clients don’t see the value in it, the group will be short-lived.

Select the best fit based on your context and objectives -Like any other consulting firm, an internal consulting group has its own Consulting DNA, which takes its roots in the creation of the group and the profiles of the managers. Unless you have an extended internal consulting group, the skills and experience of your consultants will probably be focused on a few capabilities: this is where you want to use them. If you are dealing with a project that will span over a long period or requires to connect strongly with the teams, blend in to create buy-in, or potentially manage sensitive issues, the Internal Consulting team will be your preferred option

6 Points to Consider When Working with External Consultants –

External strategy consultants can bring in important advantages, many of them corresponding with the perceived weaknesses of internal strategists. Their specialist knowledge and experience can fill in the gaps the business has internally.

External consultants can deliver excellent results, and make a real impact on the business. However, Clients need to be crystal clear in project definitions and tasks. If they leave room for interpretation, there can be misunderstandings and unsatisfactory results.

They can ease the acceptance of stricter and harder decisions. When consultants are used to helping implement painful decisions such as cost-cutting or making sure that teams are delivering synergies at an accelerated pace, good relationships are challenging to sustain. For Internal consultants to manage a situation like that can be tricky. However, to External consultants, who are transiting once the project is complete, is easier to do that, and there are no long-lasting consequences. In that case, working with External consultants can be a better solution.

They are more objective. They won’t have to deal with internal politics and personal or sensitive issues. We can assume they will be more unbiased too.

Based on years of experience, they can contribute and apply successful insights and practices from other similar projects.

Your make-or-buy decision process can cover both options and you can integrate your Internal Consulting Group in the competition for projects where their skills and experience could be an advantage. Also using a Hybrid team of External and Internal Consultants, can be a viable option for getting the experts’ support you need, ensure knowledge transfer, and reduce your costs at the same time.

How to Decide Which is Best?
It’s important to always measure the performance of your projects.
When you are running projects through your internal Consulting Group, it is essential to measure the impact of the projects and the satisfaction of the internal clients. Having feedback on their work is a fantastic tool to build improvement and development plans. Your internal consulting group will be able to grow their skills on the right dimensions and serve better their internal clients. It is also a compelling way to convince internal clients to use their services while comparing with similar external service providers.
When deciding on your next project it is worth evaluating all the elements, and pick the team of Consultants that is best suited for the project, one who is prepared to deliver the best results.

If you are planning to launch a new Consulting project,
let us help you with finding the best Consultant.
Feel free to contact us today, to learn more about Consulting Quest and allow us to learn about your organization, needs and goals.
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