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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 measure Consulting Performance

Let’s start with the question – How important is measuring the performance of Consulting Services’ providers?
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains how to how to measure consulting Performance.
Key Takeaway: There are many advantages in measuring consulting performance. Beyond the evident, working only with the best, you can see that it will help you refine your sourcing process and align spend and strategy.You can transform a center of cost into a center of value creation.
 

Podcast | A Consultant’s perspective on Consulting Sourcing

What are the main challenges that a consultant face when working with a client?
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte interviews Marc Jantzen, Business Growth Specialist to discuss the Consultant’s perspective on Consulting Sourcing.
Key Takeaway: Probably, the most difficult part of buying consulting is to define your expectations, then everybody knows where you are, where you want to go, what’s the issue you’re trying to solve. So consultants can really build an unique solution that fit your needs.
 

Make your internal clients trust you with their consulting needs

Make your internal clients trust you with their consulting needs.

Most procurement executives go out of their way to support their business lines. They scratch their heads to reconcile their internal clients’ needs and the increased pressure on savings and productivity.

Make your internal clients trust you with their consulting needs.
The function is going through fundamental changes: shifting from tactical to strategic, from savings to value creation, often amid a digital transformation. The current pandemic is just the last straw.

“Trust is like the air we breathe–when it’s present, nobody really notices; when it’s absent, everybody notices.”- Warren Buffet

Yet, in many companies, the business lines continue to avoid working with them when sourcing consultants. Or when they involve them in the process, it is often at the negotiation phase, when the impact procurement can bring is minimal.

READ ALSO
Making mistakes is human. Most cultures will penalize you for errors, promoting the myth, “Always doing right the first time.” You can take the tips we give you in this article as food for thought to implement demand management for the consulting category.

Why are procurement executives sidelined when dealing with consulting services? It is an easy answer: TRUST.
Consulting is a human-to-human service. The trust factor is core to both the selling and the buying side. The only way to be involved at the early stage of the process is to build trust with both your internal clients and your consulting providers.
So how do you do that?
1. Know your supply market inside out –
How many consulting firms serving your industry can you name? We all acknowledge that having a good grasp of the supply market is critical to get the best sourcing outcomes.
The consulting market is extremely diverse and complex. Consulting firms are not commodities that can be swapped without impacting the quality or the price of a project.

Understand how consulting is structured

When you look at a consulting provider, you need to understand what they do (capabilities), who they work with (clients), and what experience they have (industries served).
Many dimensions can impact how consultants do their work and what value they can bring.

Size and Geographic footprint
Ownership structure
Profile of Partners
Delivery Model

Each of the dimensions will influence the type of projects a consulting firm can take and how they will deliver the results.

Research consulting firms within your industry

You should start with internal sources such as your existing list of preferred providers and your network/colleagues that have worked previously with Consultants. Of course, you will also find many sources online, such as Conavigo.com, a reference platform of consulting firms that organizes them per region, capability, and industry served.
Another interesting research source is thought leadership, in particular, articles and books written on the field you are interested in. Don’t hesitate to use several sources to find new players. Understanding your options can cause you to explore innovative solutions and get the most of your consulting.

Get a grasp of the economics

Consultants are selling their time, or more precisely, the access to expert knowledge and execution workforce during a certain period of time. The potential of production of a Consulting is the amount of time available for billing. Every day not billed is lost just like an empty airplane seat. So the fee structure is usually geared to optimize the utilization rates.
Understanding the different fee structures and the elements that impact a project price will help you during the scoping and the negotiations phase.
2. Build the trust –
Collaboration and trust are the cornerstones of consulting success. In order to squeeze yourself into the relationship between clients and consultants, you need to develop relationships with both sides.

Listen to your business lines to understand their needs

Working efficiently with business lines when sourcing consultants requires anticipation and reactivity. Indeed when they need a consulting provider, they usually want it for yesterday. Unless you have a list of potential candidates at hand, they will just move forward without waiting for you.
Some companies have strong-armed their business lines and force them to slow down to match their procurement teams’ pace. The results are often disastrous in terms of quality and timing, and the business lines, frustrated, find ways to work around the stringent policies.
Most of the needs of your internal clients are recurrent or predictable. You can start identifying and qualifying potential providers way before your colleagues will need them.

Get to know your providers

As surprising as it may sound, identifying a Consulting Firm with the right expertise only gets you half-way there. Each consultancy has a portfolio of projects where they excel. As a procurement executive, you need to know their sweet spot to ensure you have all your needs covered with only the best.
The intimacy between a Consulting Firm and its clients can facilitate and accelerate projects. Developing relationships with consulting providers will help them better understand your business, culture, and values.  They will become “plug-and-play” for your internal clients.
3. Start taking baby steps –
But we all know that, in most cases, change doesn’t happen overnight. The strength of your conviction and your innovative ideas won’t be enough alone to influence the ways your company buys consulting services.

Find an ally.

There must be, among your internal clients, an influential leader open-minded and interested in new methodologies. Convince him to try something and invite new players to a consulting bid.

Do your homework.

Research thoroughly new consulting firms with impressive expertise that fits the project you are sourcing. Ask for references and check them.

Build your case for change

When you have finished your sourcing, analyze the results & ask for feedback. How much did the company save? What did the internal clients think about the process? If they were in your shoes, what would they do differently?
When you have enough data, you can go and see your manager pitch your idea and plead for a larger pilot: work with more business lines on a given perimeter.
 
Soon your knowledge of consulting and your results will speak for themselves. It might be tempting to take on all the projects, but that will soon be counterproductive. Instead, package what you have learned and teach your colleagues how to source their projects. You can then focus on finding new players and sourcing large and strategic projects.

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 measure Consulting Performance

4 things you should know about asymmetrical information in Consulting

Information is crucial in business. Before you decide to invest in any project, you usually do your due diligence and potentially build a business plan.

Podcast | A Consultant’s perspective on Consulting Sourcing

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Previous Weeks’ issues

This Week In Consulting: What’s ahead for the Media & Entertainment Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: What are the challenges ahead for governments around the world?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: Brexit, Digital disruption, Covid 19: what’s next for the Financial Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 3rd ,2021 , All you need to know about the future of education.
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

9 tips to successfully implement demand management for consulting

9 tips to successfully implement demand management for consulting

Making mistakes is human. Most cultures will penalize you for errors, promoting the myth, “Always doing right the first time.” But the reality in the enterprise is very different, much closer to a try and error process.

9 tips to successfully implement demand management for consulting
In Procurement, like in other functions, executives try new methods and adjust them with the results. They build on best practices from other professionals and companies and adapt them to their context.

“A mistake consistently repeated is not a mistake anymore. It is a choice”- Paulo Coelho

You can take the tips we give you in this article as food for thought to implement demand management for the consulting category.

READ ALSO
According to the CIPS, Category Management enables procurement professionals to focus their time and conduct market analysis to leverage their negotiations fully and correctly manage their suppliers in alignment with the corporate objectives.

1. Spot negotiate false discounts and focus on value –
Many Procurement Executives put a lot of time and effort into price negotiation and daily rates for Consulting Services. They leave the negotiation table with a 5% discount, with the feeling of having accomplished their duty. But is it so really?
Consulting Firms know the game well. They build a 5% discount into their pricing. And if you ask for a more significant discount, they can simply descope or staff down their project.
Descoping will hurt the real value you are getting from the project, and staffing down will likely cause delays in execution.
And getting lower on the list of priorities of your Consulting providers? It doesn’t sound right.
If you want to make significant savings, you need to take control of the tap; not reduce the bucket’s size. But still, 47% of companies don’t use demand management or a make-or-buy strategy for Consulting Services.
And that’s a big mistake we like you to avoid.
2. Get rid of your Misconceptions about Demand Management –
Consulting is a strategic lever to accelerate the execution of your strategy. However, the pressure on operational budgets won’t go away. And Consulting, apart from restructuring projects, is still allocated to OPEX.
Demand management allows the teams to make the difference between the “must-have” and the “nice to have.” You can keep your money for what is really important.
3. Recognize the Necessity of a Transformation Roadmap –
Once your strategy is clear and shared within your Company, you need to build the Transformation Roadmap, or in other words, the IKEA notice to execute your strategy.
Breakdown the work to be done and identify the associated main workstreams and the skills and objectives. These workstreams should be led as stand-alone projects with or without external support.
4. Prioritize Your Projects –
You have a list of projects to be launched to execute your strategy, but you know that you cannot do them all simultaneously.
Define an analysis grid to sort your projects to determine which ones are more important. Impact vs. budget is often a good start, but nothing prevents you from being more creative in your criteria. Try to identify projects that are enablers for other projects with higher priority.
5. Leverage Make-vs-Buy –
This is where the understanding of the skills associated with each project kicks in. You may not have all the resources in-house and may not be able to mobilize all of them for your projects.
For each one of the projects, identify what can/should be done in-house and what can/should be outsourced.
Don’t forget to include a rough evaluation of the budget.
6. Draw the Line & Stay Within the Budget –
The reality of the situation is that you will not be able to handle all the projects this year. In order to keep control of your expenses (or the tap), you have to define what you will spend on consulting for the period, based on where you stand in your transformation (usually from 0.5% to 3% of the revenues).
As a general rule, try to start with those that will generate immediate savings to fuel the additional projects. Another simple principle is to identify projects that will maximize the impact on a given time horizon and accelerate its benefits.
Besides, you need to define what part of the budget will be allocated to strategic projects and what part will be left at managers’ discretion.
7. Start with the High-Priority Projects –
The basic principles in Demand Management require to decide what projects will be outsourced in the next years. Start with the high-priority/high-impact projects.
Once you have reached 2/3 of your targeted budget, have a closer look at the projects still in your portfolio. Do you have projects with lesser priority or impact but an immediate return on investment? Or projects enabling other projects with higher-priority? They might be your next priority.
8. Know what to do when there is No Budget Left For Strategic Projects –
After you allocate your budget, you might end up with projects that are still highly-strategic.
You have several options: you can adjust your budget for this year to integrate them into your portfolio. You can reconsider other strategic projects and reassess the strategic value. You can also reduce the “Use directly” budget to include one or two strategic projects.
9. Ask yourself the right questions –
When setting your priorities, it’s essential to ask the right questions.
Demand Management has to be rooted in a robust decision-making process that maintains the Company’s strategic direction while controlling the costs.

On the strategic value of the project

Is this project an enabler for another strategic project?

What is the expected impact of the project?

How much are we willing to pay for this project?

What is the best timing for this project?

Will you need these skills for other projects in the next 3 years?

On the externalization value

Are the skills involved in the project core for your Company?

Do we improve the business case if we accelerate the project?

Do we have the skills and resources available internally?

Do we have the necessary skills and resources to supervise the project?

Are there companies that can provide that service?

Is there sensitive IP or information involved in the project?

Following the tips suggested above, you should be able to position your projects on a simple decision matrix. And this way, successfully implement demand management for the consulting category.

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 measure Consulting Performance

4 things you should know about asymmetrical information in Consulting

Information is crucial in business. Before you decide to invest in any project, you usually do your due diligence and potentially build a business plan.

Podcast | A Consultant’s perspective on Consulting Sourcing

Your browser does not support the video tag.

Previous Weeks’ issues

This Week In Consulting: What’s ahead for the Media & Entertainment Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: What are the challenges ahead for governments around the world?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: Brexit, Digital disruption, Covid 19: what’s next for the Financial Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 3rd ,2021 , All you need to know about the future of education.
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

Our 5 recommended practices to Avoid the Most Common Mistakes in Managing The Tail Spend

Our 5 recommended practices to Avoid the Most Common Mistakes in Managing The Tail Spend

When you manage a budget, you tend to focus on the main expenses and sometimes ignore the smallest ones. And one in a while, you decide to go through your bank account, and you realize that when you add all the small expenses, the number is significant. This part of your expenses is your tail spend.

Our 5 recommended practices to Avoid the Most Common Mistakes in Managing The Tail Spend
The concept applies to your personal finances as much as to your consulting spend. It is the lowest portion of your spend (usually the last 20%), with smaller expenses scattered over a large number of suppliers.
“Beware of small expenses; a small leak can sink a great ship. “- Benjamin Franklin
And just like in your bank account, it is often not actively managed, even though it might still have an impact on your company’s performance.
Many client organizations give carte blanche to the business lines to hire consultants under a certain price threshold. This organization allows them to maintain some flexibility and reactivity in the consulting sourcing process. The downside, however, is that they tend to overlook these small consulting projects. But if you consolidate the spend at the organization level, it can add up to 25% of the overall Consulting Spend.
With the constant pressure on cost reductions and sustainable savings, even your CFO might take an interest in this line of expense.
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.

READ ALSO
When you launch a project, you can always hope that the consultant will understand your needs. Or you can write down the reasons why you start a project and what results you expect. Writing an RFP is not easy.

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 out 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. (Ex: diagnosis or workshop facilitation)

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.

Recurring projects.

Recurring projects are, most of the time, medium-sized projects designed with a repeat model. (Ex: 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. (Ex: one diagnosis per plant, any project reaching phase 4 and more)

Externalized workforce.

Sometimes managers use consultants to bypass too stringent HR rules or compensate for lack of internal expertise punctually.
3. Successfully Tackle the Tail Spend–

To efficiently clean-up your Tail Spend, here are a few pointers:

Gather data on previous projects.

When facing the Tail Spend, the main challenge for most companies 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.

Assess the performance of the providers.

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 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.

Use vendor management systems.

Use best-in-class systems to manage the one-off supplementary workforce. Automate the process to find, procure, and manage external talent in full compliance with your policies. You could use many other levers, but the above selection should probably give you a good 80/20.
4. How to Kickstart a New Tail Spend Project –
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.
Once you know what to expect from the project, you can start implementing it.

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. What is the reason for this change? The size of the prize can be an excellent starting point. Usually, consulting projects are paid on OPEX, and Executives have a lot of pressure to decrease their expenses. Saving 10% on your Consulting bills can help them reach their annual objectives. Leverage meetings with 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.
Also, 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, in particular, those who use Consulting regularly. Through your Tail Spend analysis, you will be able to identify the individuals or departments spending a lot on small projects. You can apply the same principles as the tail: what part of your executives spend 80% of your tail Spend? These Executives are the ones you want to work with.
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 now need to 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.
5. Start small, go big, auto-finance –
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, help convince the last irreducibles, 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 measure Consulting Performance

4 things you should know about asymmetrical information in Consulting

Information is crucial in business. Before you decide to invest in any project, you usually do your due diligence and potentially build a business plan.

Podcast | A Consultant’s perspective on Consulting Sourcing

Your browser does not support the video tag.

Previous Weeks’ issues

This Week In Consulting: What’s ahead for the Media & Entertainment Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: What are the challenges ahead for governments around the world?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: Brexit, Digital disruption, Covid 19: what’s next for the Financial Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 3rd ,2021 , All you need to know about the future of education.
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

Does Category Management apply to consulting?

Does Category Management apply to consulting?

According to the CIPS, Category Management enables procurement professionals to focus their time and conduct market analysis to leverage their negotiations fully and correctly manage their suppliers in alignment with the corporate objectives

Does category management apply to consulting?
Ultimately, client organizations can generate more savings, but more importantly, maximize value creation.

“If you can’t measure it, you can’t manage it.” – Peter Drucker

While the consulting category is rarely managed separately from the other professional services, it would really benefit from the methodologies of category management. Indeed, the key success factors for efficient consulting sourcing lay in the market’s knowledge, increased collaboration with business lines, and alignment between consulting spend and corporate strategy. The overlap with the key advantages of category management is striking.
The pre-requisite to getting the most from your consulting spend is to recognize consulting as a strategic category. Indeed the size of the spend (0.5% to 3% of revenues) added to the potentially significant impact on the business makes it a key enabler of the strategy.
But does Category Management fully apply to the Consulting Category?

READ ALSO
When you launch a project, you can always hope that the consultant will understand your needs. Or you can write down the reasons why you start a project and what results you expect. Writing an RFP is not easy.

One of the principles of category management is to implement a continuous analysis of the spend, the market, and the performance of the suppliers to identify opportunities for improvement.
1. Spend Analysis
Performing a Spend Analysis is often the first step in aligning the Consulting Procurement Strategy with its strategy. To analyze all the projects outsourced and to forecast for the future, you need to aggregate the Consulting Expenses across all organizational divisions.
The spend analysis’s objective is to produce a fully documented understanding of the company’s prior and future spend for Consulting Services, broken down by users and suppliers.

2. Market Analysis
Knowing the Consulting Market is crucial to procure Consulting Services. Leveraging your existing consulting spend, you can analyze the consulting market for your company’s main capabilities of interest. The second step, often more complex, given the lack of familiarity with the subject, will be to look at the market for the services you could use to accelerate your objectives and create more value.
The Consulting Market Analysis outcome should be a better working knowledge of the supplier market and your place in it. You have identified potential suppliers and know your value as a customer.
But unlike other categories, you cannot limit your supplier analysis to only the major players. The complexity of the market, the diversity of the offerings, and your potential needs’ granularity make it necessary to take a deeper dive into the Consulting Industry.

3. Supplier Performance Analysis
The Supplier Performance Analysis should give you a holistic view of your Consulting Providers’ Performance, broken down per capability, organizational division, and project. It is often based on metrics on tangible performance, such as on-time delivery, respect of the initial budget, and quality of the deliverables.
4. Relationship management
Consulting Services have an intrinsic human component that has a direct impact on performance. Attitude and relationships have a powerful effect on the project’s outcome.The consultant’s behavior with the different stakeholders, his ability to build trust or transfer knowledge are parts of the delivery.Especially for Large Companies, it is recommended to look at the consulting firms’ performance at the partner or project manager level. Indeed, it is not unusual to see significant variability of performance when looking at a company level. However, the performance can be very well correlated with individuals. In other words, people trump brands, and not all Companies are good at everything. Learn to identify each of your Potential Providers’ sweet spot and the partner you want to work with, depending on your needs.Finally, a Consulting firm can deliver perfect action plans but fail to support you in implementing or transmitting enough knowledge to take over when they leave. Make sure to ensure that you can take over the project when the consultant leaves.To conclude, Consulting is indeed a strategic category that fits the category management framework perfectly. Procurement groups could build on their knowledge and experience of category management to manage consulting and rake additional savings and create more value for their internal stakeholders.

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 measure Consulting Performance

4 things you should know about asymmetrical information in Consulting

Information is crucial in business. Before you decide to invest in any project, you usually do your due diligence and potentially build a business plan.

Podcast | A Consultant’s perspective on Consulting Sourcing

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Previous Weeks’ issues

This Week In Consulting: What’s ahead for the Media & Entertainment Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: What are the challenges ahead for governments around the world?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: Brexit, Digital disruption, Covid 19: what’s next for the Financial Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 3rd ,2021 , All you need to know about the future of education.
read more

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Consulting Playbook: How a Merger Achieved Synergy in the Product Development Process

Consulting Playbook: How a Merger Achieved Synergy in the Product Development Process

The Consulting Playbook, Edition #11
One of the leading Aerospace and Defense companies undertook a major transformation when a merger of several companies took place. To ensure the successful integration, the Head of Integration needed help. The main priorities of the company were secure: Integration of the overall organization, Increase Corporate Performance, and Enable efficiency and collaboration on all levels.
To speed up and facilitate the process, they requested external support in the definition and application of a new Product Development Process reference that would allow a proper alignment on through a backbone process of the company.
A 3-Step Approach to Deliver the Desired Results
The Consultant focused their efforts on building a collaborative environment and helping all parties understand the process with the application of stage gates and dedicated development phases.
A Multi-Step Approach was applied to achieve the desired objectives:

Definition of the development timeframe, with specific sequence in stage gates
Synchronization of the development, design and delivery of key components and systems
Implementation of collaborative approaches to manage concurrent development, product lifecycle and interdependencies.
Review the main criteria to determine each stage gate adjustments to the sub-processes to achieve the expected performance (lead time, reliability, etc.) through multiple sub-projects involving experts of all legacy companies.

This new approach was implemented on the new strategic project from the company embarking employees from all legacy companies in the journey.
Beneficial Impact of the Consultancy, Following the Merger
The successful completion of the project, to the client’s satisfaction, achieved the following:

The new Product Development Process accomplished reduction of development lead times, more effective and realistic expectations, better collaboration of various teams
Improved planning and management of development programs in collaboration with functions
An overall cost reduction of 20% vs. previous similar projects.

Additional Information

New Product Development in 4 Simple Stages
Companies and entrepreneurs often feel the need to introduce new products. And depending on the industry you are in; the process might be less or quite complex. But without new products, extension line of existing products and innovation, it is tough to stay competitive, relevant and profitable in the long run. As technology constantly evolves, so are customers’ needs.
Let’s look at a typical new product development stages and what is the most efficient way to proceed with new product idea.

Generation and Evaluation of Product Ideas

To greenlight an idea, it’s best to have a few brainstorm sessions with your team, and the people whose decisions and opinions matter, decide on the best idea, then go to the next stage. Your new product ideas can come from a variety of sources such as: your employees, your boss, competitors, and even customers. Evaluate carefully the pros and cons of each idea, and then decide on the feasibility of pursuing it. It’s estimated that a third of new product ideas originate from users and customers. At this initial stage, often a niche market research is required, to get a deeper understanding of the potential of the new product idea.

Testing

The journey of the great new idea to the market, continues with development of a Product concept. Once you have this ready, you can test the sample with consumers and team members, capture their reactions and make further adjustments as necessary. After the testing is completed and the product features finalized, the new product can scale up into production.

Customized Marketing Strategy

Even the greatest product can fail without a well-planned marketing strategy and sufficient support to promote it. The marketing strategy typically will consist of: identification of the target market and demographics, branding and positioning, sales and market share projections for the first one or two years. It’s essential to also identify the main distribution channels, pricing, marketing budget, and profit goals.

Mass production and Commercialization of the New product

With the marketing strategy set, and the Business analysis completed, the Management team will decide on the next and final stage – commercialization of the new product. The cost of manufacturing, marketing and advertising of a new product, can be quite high, so the Management should consider all the factors like timing, region, logistics, important events, etc, for the official launch and initial distribution of the new product.
Since for many companies, time is of the essence, a new and more flexible approach is being introduced: close collaboration and simultaneous development of the new product by the parties involved, to complete it and launch sooner.
Saving time and money is always a winning proposition to businesses and customers alike when developing new products.
 
For Further Reading:

This is how Apple’s top secret product development process works
Eight Simple Steps for New Product Development
8 Step Process Perfects New Product Development

t

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.

Optimize the Ups and Minimize the Downs of Your Procurement Capability Journey

Optimize the Ups and Minimize the Downs of Your Procurement Capability Journey

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.

 “Strategy without process is little more than a wish list.” – Robert Filek

In this post, we will focus on helping you get a clear perspective on the stages of maturity of your Consulting Procurement Capability – from the starting point to the best-in-class maturity level.

Optimize your Consulting Spend

Knowing exactly what benefits you are getting from your projects and providers, is essential in managing your Consulting spend.

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Defining where you want to go next –

For Large companies – the best-in-class maturity level should be the end-game in the transformation journey. They are already familiar with Strategic Sourcing, Demand Management, and Category Management. They are spending hundreds of millions of dollars every year on Consulting Projects and can get significant savings and quality improvement by implementing best-in-class Consulting Procurement practices.
For Mid-Market Companies, spending roughly $5M to $30M in Consulting every year, the aim should be somewhere between the Best-in-Class and the Leading Maturity Level or rely on third-party services to make the extra mile.
For Smaller Companies, spending less than $5M a year, the Leading Maturity level is a good start. If the company has not implemented Category Management yet, the Consulting Category can be integrated as part of a more ambitious project on the full Procurement Scope.

Consulting Procurement Organizations should aim to reach a high level of maturity.
The benefits that come with it are:

Use of best-in-class practices
Utilize significant efficiency gains for the Procurement group and company

Now, let’s take a look at the Maturity Grid, which is a great way to measure your current Procurement Capability –
Your starting point –
The purpose of the Consulting Procurement Maturity grid is to help organizations understand where they are today, where they should go in the future, the value of doing so, and how to get there.
The Maturity Grid – 4 Levels of Consulting Procurement Capability –
Each level has its strengths and weaknesses that need to be understood.

Basic or Operational Level –

At that level, the Consulting Category is not managed. The organization is leaving value on the table.
The organization has not implemented specific processes for Consulting Services and the decision-making for Consulting is often decentralized. The Procurement Group is involved at the last stage of the process if at all. The Supplier selection is based on interpersonal connections.
The potential for savings and improvement are significant, but not utilized.

Standard Level –

The Organization is starting to manage the category. They have developed specific processes to manage the Consulting Category and implemented Demand management for projects over a certain threshold. Suppliers are chosen through competitive bidding 50% of the time.
The consulting Spend is under control. The organization sees the value of managing the Consulting Category. The strategic value gap begins closing as the capabilities for Consulting Procurement start to increase. Teams have developed a basic understanding of the specificity of the Consulting Market – with critical value utilized by knowing things can be improved.

Leading Level –

The Leading Organization has put in place a solid Category Management for Consulting Services. The teams have developed a good market knowledge supporting sourcing and negotiations. Procurement is involved in most purchases and most suppliers are chosen through a competition.
The organization is one step shy of having a fully mature Consulting Procurement Capability. The strategic framework to make this happen is complete, and the organization is ready to begin implementing the next level.

Best-in-Class –

The Best-in-Class Organization has developed a fully mature Consulting Procurement Capability. This is truly evolved and highly efficient organization in its Procurement Capability maturity.
The Consulting Spend and the Consulting Sourcing Strategy are aligned with the strategic priorities of the organization. Procurement is recognized as a full business partner for the Consulting Category and leads a collaborative approach to Consulting Sourcing.
The teams have now an advanced understanding of the market including alternatives, fees benchmark and new entrants. They manage the Performance of their suppliers through systematic performance reviews and continuous improvement plans with long-term partners.
The ROI of projects and the internal team satisfaction have greatly increased.
Key Areas in Your Consulting Procurement to pay attention to, as per the Maturity Grid:
Strategy, Governance & Organization

Sourcing Process
Enablers (Manuals, Guidelines, and Systems)
Category Management

The following questions can get you started:

Is your Consulting Spend aligned with your strategy?
Do you have a procurement team or person focusing on Consulting?
Do you have a collaborative approach to Consulting sourcing lead by your procurement teams?
To what extent do you organize competition between providers for your projects?
Do you implement differentiated sourcing processes by nature of project for the consulting category?
Do you track the performance of your Consulting Providers?
Do you leverage category-specific digital solutions for the Consulting category?
How knowledgeable are your Procurement teams on the Consulting market?
Do you consider creative fee structures for your projects?
Do you have a make-or-buy strategy for the Consulting Category?

 We hope being equipped with these tools will allow you to easily understand the Procurement Capability level of your organization and set your strategic goals accordingly.

Do you want to discuss further on the Consulting Sourcing Maturity?
Would like to get a fresh perspective on your next Consulting sourcing? Do not hesitate to contact us today.
We are here to help and make sure you get the best value from your Consulting.
Book your call

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Why Building a Performance Measure System That Lasts Delivers The Best Results?

Why Building a Performance Measure System That Lasts Delivers The Best Results?

“The system, to a large extend, causes its own behavior.” – Donella H. Meadows

Markets and conditions constantly change, but a progressive Performance Measure system for Consulting projects, established within your organization, can produce desired results on a regular basis. Or even better – it can optimize all resources and boost results.
Monitoring the relevant dimensions, that a Performance Measure system produces, will provide you with a wealth of inputs your firm can use to:

Measure the impact of your Consulting Spend
Understand who spends money on what and with whom
Create individual ScoreCard per project, or Consulting Firm
Compare the performance of the different Consulting Firms
Identify the Low- and the High-Performers

Read also...
Analyzing proposals to select the right provider is a key step in the procurement process. What is the secret sauce to identifying winner proposals?

Learn more

Consistency as a Key Factor –
We should emphasize that if you start measuring the performance but stop after a few months, or measure it on a random basis, it will be difficult to convince your suppliers of the seriousness of the effort.
To avoid this unfortunate situation, we suggest the measure of the performance to become part of your Procure to Pay Processes (P2P).
The distribution of the performance measurement survey can be automated as part of the workflow when you open a new project and should be mandatory before the official closure of the project. It can be established as a mandatory step before proceeding with the last payment to the supplier.
But evaluating and measuring performance are, in fact, designed to bring improvements.

Few easy steps in implementing an Improvement Plan-
1-Set out a few dates on your calendar for discussions with your main providers about their performance over the last few projects. The focus and topics can cover the overall performance and will be the starting point of the improvement plan.
2-The goal of the exercise also is to yield value for the internal stakeholders, as they will have to spend time to fill in the surveys. Once a year at least, plan a debriefing with them about the performance of the key suppliers in the panel. Take advantage of this meeting to discuss what will be the future needs and to identify changes to be brought to the panel.
3-Depending on the situation, and the project, improvements may include:

Staffing (e.g., displacing low performing individuals or those with the lowest fit with your company’s culture),
Movements in and out of projects (staffing evolving too frequently, poaching of collaborators, …),
Perceived performance or impact issues (disconnect between costs and actual impact), lack of expertise on a given subject,
Compliance with company processes, policies, and commercial terms (daily rates, discounts, …).
Creating an internal network of experts to monitor and support improvement actions. They can be functional experts or ex-consultants. They can help you review the outcomes of the key projects, the feedback on the various firms and to design improvement plans more specific to the expertise of each consulting firms. They can also support you to identify, through their network, alternative consulting firms not initially in your radar screen.

Building an appropriate performance measurement system is your first step towards creating value through consulting and taking control of the consulting category while keeping decision-making and feedback in the hands of the project sponsors.
And to finish on a high note, the great news is that “What’s measured improves.” – as Peter Drucker said.
 

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
Book your call

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How Using the Right Compensation Models Can Benefit Your Project

How Using the Right Compensation Models Can Benefit Your Project?

Compensation models vary, and using the right one can benefit both parties, Clients, and Consultants, also ensure everyone is happy and gives their best to the project. 
Every project is different, so choosing the best Compensation model can have a great impact on the ROI of the project. To maximize your benefits, take the time to evaluate and select the Compensation model you think is right for you and your organization.
Now let’s dive into the most used Compensation models and see how you can make your dream project happen while properly compensating your Consultants

How Using the Right Compensation Models Can Benefit Your Project?
Here is how this works – If you want to optimize your consulting spend, you might be tempted to attack the cost base with traditional cost-cutting measures (reducing budgets, negotiating discounts, setting up multiple validations, etc.). Even though this can provide short-term results, we should not lose sight of the fact that using consultants is about value creation. As such, despite all the bad press about consultants and their fees, discussions should primarily be about impact and value.
Now, let’s review the most used Compensation models:
1. Deliverable-based fees or flat fee
Most Consulting firms use the flat fee structure for their projects. The Consultant will evaluate the work to be done and staff a little team. The total fee will reflect the total cost of the team to provide the work.
Pros:  The Consulting team will do the work even if the workload is higher than expected. The risk for the Client is limited. Incentives for the Consultants are through repeat business and resource optimization.
Cons: The Client pays the amount agreed, even if the consulting team does the work faster than expected. The Consultant can be tempted to “supercharge” their resources to mitigate the risks. The Consultant can allocate resources to the proposal that will never work on the project to create a buffer.
2. Time-based fees or daily rates
This system is very common, in particular with small projects and independent consultants. It can also apply to interim management assignments. The Consultant will define a daily rate, and invoice the Client based on the number of days actually worked for the Client.
Time-based fees will be perfect for projects where you mostly need extra arms and legs such as interim management, or spot team reinforcement.
Pros: The Client will only pay for the work done and time spent.The fee structure is particularly transparent and adapted to projects with a finite duration.
Cons: A low-performing consultant will charge more days. Besides, the incentives for the Consultants are to stay longer to charge more. And what happens if you are not available and the work cannot progress as planned? The Client has little control over the total cost of the project. The risk is mostly on the Client’s side. 

“As a consultant at McKinsey, I learned the value of data and the ability to shape that information into an answer.” – Pete Buttigieg .

READ ALSO
“Demand management allows the teams to make the difference between the “must have” and the “nice to have.” You can keep your money for what is really important.”

3. Retainer-based fees
When a client needs continuous part-time support, s/he can opt for retainer-based fees. The Consultant and the Client agree on a number of days per week/month/quarter where the Consultant will be on “stand-by.” The retainer can be paid in a lump sum or on a monthly basis, independently of the work done by the Consultant.
Pros:  The Consultant has to stay on top of the Client’s organization and priorities. The Client is sure to have access to the Consultant for the agreed period. This type of model works particularly well when deliverables are unclear and can change during the assignment.
Cons: The consultants can have several projects at the same time. The “retainer” client is not always their #1 priority as that project is secured. Some consultants tend to consider retainers as paid commercial time.
4. Value-based Pricing
Value-based pricing is a pricing strategy where the prices are set not on time and materials, or cost + margin, but rather on the perceived value for the Client of the service delivered. For Consulting services, it could be a share of the savings realized in a cost-cutting project, for instance.
Pros: The clients and the consultants share the same interests: the more value created, the more value for each party. The risk for the Client is very limited. The Client only has to commit to a small flat fee.
Cons: The baseline and the conditions of success have to be defined very precisely, so the Client doesn’t end up paying more than the value really created. The model is more difficult to apply for intangible deliverables with no direct, measurable impact on P&L. Traditional consultancies are reluctant to use this fee structure that does not fit their pricing and risk management models (you cannot reserve a team of four consultants from the pool when the payment for only two can be secured).
5. Value Sharing – a Win-win Proposition
More and more consultancies are exploring ways to share the value with their clients. The movement started with Bain & Company when they moved from pure strategy work to more operational support.
Value-sharing fees make sense when the stakes are high, and you expect the consultants to go above and beyond their normal delivery by aligning their interests with yours and giving them, beyond the sole repeat business, the perspective of a substantial upside in case of success. Classical cases will include cost-saving programs, pricing optimization, and a new business launch. To mitigate the risk, you will have to implement governance to make sure the activities (and how they are performed) remain in line with your overall strategy and culture. Indeed, the consultants will take a very active role in the execution of the project, but you remain at the bar. And what are the expectations beyond their normal job that would justify a special bonus?
The catch, when using value-sharing, is to define clearing the starting point and the parameters involved in the measure.
In conclusion, for each project, you can identify the fee structures that will yield more value for your company. It will depend on the type of project, the nature of the deliverables, the context of the project, the flexibility you have on fees, and the level of commitment you expect from the Consultant.

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 measure Consulting Performance

Let's start with the question - How important is measuring the performance of Consulting Services' providers? On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains how to how to measure consulting Performance. Key...

4 things you should know about asymmetrical information in Consulting

Information is crucial in business. Before you decide to invest in any project, you usually do your due diligence and potentially build a business plan.

Your browser does not support the video tag.

Previous Weeks’ issues

This Week In Consulting: What’s ahead for the Media & Entertainment Industry?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
read more

This Week In Consulting: What are the challenges ahead for governments around the world?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week, February 24th ,2021 , All you need to know about the challenges ahead for governments around the world.
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

How to find the right Consultants for your Project?

How to find the right Consultants for your Project?

Finding the right consultant for your business can be a tricky process. It’s not just about knowing where to look, but knowing what to look for. Just like hiring a new employee, you want to be sure your new consultant is someone who will actively support and help you achieve your business goals. So, where do you begin?
Before you start your search for a consultant, clarify exactly what you types of results you are looking for. You know for sure your primary objective: increase sales, update marketing efforts, overhaul your HR department… But are you clear on the scope? Do you want a benchmark of best practices, a diagnostic of your current performance or support in the implementation? Besides have you identified how you will measure success? The clearer your goals, the easier it will be to home in on the right consultant for the job.
Whether you’ve received a referral from a friend or you’ve been exploring your options on the internet, it is important to keep these needs in mind while looking for a consultant. Someone might blow you away with her ideas and proposals, but if she’s not going to give you the results you need, there’s not much point in hiring her. However, by taking your time, doing your research, and considering all the facts, you will be able to find a consultant who’s the right fit for your company.
So, if you’re wondering how to find a consultant who can provide the outcome you’re looking for, here are a few tips:

Source Consultants

Hiring a consultant who has successfully worked for many other companies helps you and your team gain a different perspective.

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1. Ask questions.
Finding a consultant online is not just about putting in your requirements to a system and waiting. You need to ask the right questions. One great way to do this is by reading a consultant’s past reviews. Has she worked on projects similar to yours? Has she been able to produce results? Has she effectively increased the bottom line of the companies she has worked with?comfortable. You should be able to communicate with her easily.
2. Ask whom she has worked with.
According to this article from Huffington Post, you should find out if the consultant has worked with businesses of the same size as yours. If she has generally worked with small businesses, she may not have the right skills to work with large ones, and vice versa. Try to get a feel for the businesses that are rating the consultant. If you find that businesses of the same size and focus as your own are rating a consultant well, then there’s a good chance that she will be a good fit for you, as well.
3.Do you feel comfortable with her?
This article from Huffington Post is about bridal consultants, which is probably not the type of consultant that you’re looking for.

Interestingly, however, many of the things that people are looking for in a business consultant are the same things that they’re looking for in a bridal consultant. For example, you know that the consultant is not right for you when “you feel pressured to make a quick decision,” “you feel like she’s not listening to you,” “you feel judged” and “you feel neglected.” Even when you’re making business decisions, it’s important that the consultant with whom you decide to work makes you feel
4. Communicate.
Before you even ask for a proposal or presentation, you should communicate clearly with your potential consultant about what you are looking for. Make it clear that you expect workable results and not just theoretical ideas. Tell her about your goals and your current strategies for how to achieve those goals. Familiarize her with the structure of your business and the types of products or services you provide. The more you can tell the consultant about yourself and your business, the better she will be able to serve you. The consultant who pays attention, asks questions, and works your ideas into her proposal, is one who likely deserves your business.
5. Read proposals and listen to presentations.
Most consultants will be delighted to write a proposal tailored to your business. You might feel like you’re asking the consultant to do a lot of work. However, most good consultants will be happy to have the chance to show you what they can do, in as much detail as possible. If a consultant feels like your business is not worth putting in that extra effort for, then you know that she’d likely not be a good fit for the job. When you’re given a proposal, don’t just skim over it. Be respectful of the time and effort this consultant has put into preparing it, and make sure that you give it your full attention. The same goes for the presentation. Be attentive, and if you have any questions for the consultant, now’s the time to bring them up.
By setting clear goals, doing the proper research, and knowing what to expect from the right candidate, you will be able to move forward with confidence and find a consultant who can get the job done.

Consulting Playbook: Lean Transformation and Effective Measurement of Performance

Consulting Playbook: Lean Transformation and Effective Measurement of Performance

The Consulting Playbook, Edition #22
A leading organization with a dozen plants and about 20,000 workers needed help in achieving its performance targets. They had implemented improvement initiatives in all the plants. Every plant was equipped with SAP systems; however, there were discrepancies between the plants in different countries. It became necessary to promptly design a new set of KPIs with definitions, performance, scope/granularity, and frequency set. A dashboard had to be set up in every plant using each local variable—capabilities, ensuring consistency, etc.—to enable cross sites benchmark, centralize the consolidation process, and meet the management’s objectives. The head of manufacturing decided to ask for the help of an external consultant. The goal of the project was to design an effective process to cover the Lean central reporting and to measure the success of the Lean transformation. The issue that prompted this change was the new Lean Initiative rolling out in all the plants without the corresponding KPIs updated
Creating a Dashboard Reflecting the New Performance KPIs
During the first phase, the team gathered both external and internal resources to analyze what measurement system was used by the various plants. Understanding the rationale for this choice along with the differences across sites, what measures could be replicated, and what measures were unique was essential to completing phase 1. This task was completed within 2 to 3 weeks.   The second phase kicked off with a workshop where the outcomes of phase 1 were presented. Teams could understand the extent of the work that had been done and learn from the other sites’ experiences, but they also realized that definitions used from one site to another were not allowing any internal benchmark. During the following 3 months, Lean KPIs were developed, value stream mappings were performed to understand the sources of waste, and Inventory management was reviewed and optimized enabling the optimization of logistic costs. Among the KPIs developed we could find:

Process efficiency KPIs: OEE, Yield, Downtime, Takt Time
Supply Chain Efficiency KPIs: On Time Delivery, Inventory Turnover, Capacity Utilization, Unit Cost
Quality KPIs: Right First Time, Reject Ratio

The newly defined KPIs were then introduced to all the plants. The First Monthly Performance Dashboard was consolidated, creating the baseline to measure future progress and a great support to the visual management. The implementation of those indicators was automated to focus on higher-value activities
A Path Moving Forward Created
The dashboard was created, and the reporting process was set accordingly. A handbook was developed to ensure a proper alignment of practices and definitions, as well as smooth on-boarding of newcomers. But, more importantly, this was the first collective step in the Lean transformation journey. Thanks to the contribution of all the teams in the creation of this joint referential, the mindset change had been initiated. And, thanks to the visual management implemented, this change was made visible to all parties. The Global Lean initiative ultimately exceeded expectations, leading to reduced manufacturing costs and working capital requirements by more than 7% in two years.

Additional Information

Major KPIs for Managers Beyond Manufacturing  
As a manager of any size team, you are likely aware how important KPIs are. In their essence KPIs are indicators measuring your team’s performance. They can also help you understand where your team excels and delivers as expected and where it falls short of expectations or standard. We have created a brief list of essential KPIs to look at when evaluating performance.

Financial Metrics

– Profit – it’s important to evaluate both gross and net profit to get a clear idea of how successful your team is. – Cost – it’s the best indicator of effectiveness and the incentive to make reducing and managing your costs a top priority. – Sales by region – this metric will show which regions are meeting their sales objectives and which are not; a sufficient analysis can allow you to improve these numbers. – LOB Revenue vs Target – it’s necessary to compare your actual revenue vs the projected revenue. – LOB Expenses vs Budget – this is the comparison between your actual overhead and your forecasted budget. If there are any discrepancies, you can revise the plan, improve the team’s performance, and develop a better plan for the department’s budget.

Customer Metrics

– CLV – Customer Lifetime Value – this is not just about minimizing costs and trying to optimize customer acquisition. It’s about a clear understanding of the value your organization gets from each customer long-term. – CAC – Customer Acquisition Cost is another very important metric, which is determined by dividing the total acquisition costs by the number of new customers for a given period. – Customers Satisfaction and Retention – this is a bit broader indicator as you can measure various metrics to evaluate how happy your customers are. There might be underlying and deeper issues that are not entirely under your control, but the goal is clear – have more repeat customers, offer more incentives and long-term customer loyalty programs, and develop customized products, special offers, and services to make sure your customers’ needs are fully met.

People Metrics

– ETR – Employee Turnover Rate – if you like to get a clear idea of how well you are doing in this area, divide the number of employees who have left by the average number of employees, and see if this number seems appropriate. A higher number should prompt you to evaluate working culture, employment remuneration packages, work environment, employee satisfaction, and the like. – Rate of Response to Open Positions – a high percentage of qualified applicants shows that you are getting the best exposure to the job-seeking market. This will give you the best chance of hiring the right candidates and of optimizing your team’s success. – Employees’ Satisfaction – a major and broad indicator, which requires periodic surveys and interviews to determine how you can improve your employees’ well-being, and thus expect their best performance in return.  
For further reading

Key Concepts for Winning Strategies
Top Warehouse Performance KPIs
Five Rules for Selecting the Best KPIs to Drive Operational Improvement
The Value of Key Performance Indicators in a Lean Transformation
18 Key Performance Indicator Examples Defined For Managers

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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 Successfully Manage a Consulting Project in 6 Essential Steps

How to Successfully Manage a Consulting Project in 6 Essential Steps

“I get just as excited about building a birdhouse as when providing a strategic counsel to a client.” – Robert L.Peters

Since the dawn of the Industrial revolution, Consultants have helped in creating some of the most ambitious and innovative projects around the world. Have you heard of the Marmaray Tunnel in Turkey? An underwater railway tunnel that connects the European and the Asian parts of Istanbul? The project costs $4.5B and took 9 years to complete. What about the Hong Kong-Zhuhai-Macau Bridge, in China? This impressive 16-mile bridge and tunnel structure, includes two small artificial islands too, in order to provide support to the construction.
Regardless of how big your Consulting project is, it’s necessary to use the best methods and approach in managing it.

How to Successfully Manage a Consulting Project in 6 Essential Steps:

When you are buying services, and in particular intangible services like consulting, the bulk of the work comes after the procurement process has ended. You have to monitor and manage the outcomes of the project, but also the project itself. Indeed, consulting projects very rarely play out as planned

Know the Consulting Industy

Africa as a continent rich in resources, cultural diversity, and with its young population, has all the potential to grow economically at a satisfactory rate, provided it has progressive leadership and more political stability.
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1. Get organized to manage your project
Managing a consulting project is first and foremost managing a project. The same principles apply. To maximize the chances of success of your project, you will need to manage these three elements:

Stakeholders – This is project management 101. Align the stakeholders to make sure they will support the project and collaborate with the project team and the consultants.
Project – You need to put in place the best practices for project management: define the work plan, clarify the roles and responsibilities, and put in place a clear governance.
Change – Always obvious, but more often overlooked, change management is a key success factor for consulting projects. Anticipate the resistance to change in the teams impacted by the project and define strategies to address each situation.

2. Monitor the performance
Don’t wait until the end of the project to evaluate the performance and share your results with the consultants. The reasons for low performance can be multiple and simultaneous. It could come from the Consulting Firm (capabilities, skills, experience, staffing, etc.) or your teams (low priority, staffing, etc).
In any case, it is best to sit down with the Consulting Firm to discuss and understand the issue and find solutions together.

3. Manage the Consulting contract
When you are working with external consultants, you also have to manage the relationship. First, you will have to track the changes in the project that can touch scope, staffing, timeline or unforeseen events. When these changes are substantial, you should consider amending the contract. In any case, keep a trace of the changes in the minutes of the Steering Committees.
For very large projects, you should consider organizing a formal mid-project review. You can cover both the changes to the statement of work and the quality of the outcome. It should not prevent you from checking-in regularly with the Consulting Firm to anticipate potential slips in the project scope and timeline, and allow your provider to fix the problem.
Consider the consulting firm as your partner with a common objective: the success of your project. Be unbending on the quality of the outcomes. Give them feedback on their performance and visibility on payments.
4. Wrapping up – Anticipate and prepare for when the Consultant departs
Maybe you have prepared the transition from the start (in other words, in your RFP), and included the transition plan and regular check-ins in the deliverables. If that’s not the case, make sure to prepare for when the consultant leaves.
Once you have decided what recommendations you will act on, you have to organize for how you will act. You should also consider the transfer of knowledge in particular if the project implemented a new organization or technology. And you should define this plan with the consultant at hand.
Prepare the performance assessment for the Consulting Firm by gathering the information collected along with the project.
5. Don’t hesitate to end the contract earlier
Sometimes Consulting Projects have to be closed earlier than expected. Many changes can happen between the moment you decide to work with consultants and the end of the consulting projects.
The context can change or the management team. If that’s the case, continuing the project as it is might just be a loss of energy and money. Always find ways to adapt the scope to your needs. And terminate the contract if you must, and if the consequences will be acceptable.
6. Close the project neatly
Whatever the reason for terminating the project early, don’t rush into it. Take the time to analyze the impact of the termination and the probability of success of another consulting project. Prepare also what to communicate with your teams involved in the project.
At that point, you should have paid the consulting provider based on the delivery, and accrued the budget until the end of the project.
Keep the last invoices on your desk until you are sure that the project is delivered in full. That will give you enough leverage to get back to finish the project.
When you think the project is closed, and the invoices are approved for payment, you can take the time to debrief the consultants on their performance on the project.

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This Week in Consulting: What you should expect from Learning and Development in 2020

This Week in Consulting

Wednesday, March 04th 2020

What you should expect from Learning and Development in 2020

THIS WEEK’S MUST READ
“As we move further into a new year, many individuals and organizations alike are planning and implementing resolutions and annual plans for the coming 12 months. For many organizations, L&D efforts rank high on the priority list of 2020 goals and initiatives—and for good reason.”
What is the importance of L&D efforts for staying competitive in a knowledge-based economy and what are the L&D trends for 2020?
This Week’s Must Read  is an insight piece from HR Daily Advisor where the author lists L&D goals and priorities in 2020.
Read on to Find out More: “Top Learning and Development (L&D) Trends for 2020“ | Lin Grensing-Pophal for HR Daily Advisor.

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THIS WEEK’S VIDEO:

Coaching Business Strategy To Take It To The Next Level. How can you level-up your business to reach and impact more people without burning out or overworking?

THOUGHT LEADERSHIP

How Professional Coaching Can Advance Human Potential: “ In the past four decades the world’s understanding of the potential of a human being, especially as it relates to our understanding of how the brain learns, how habits are formed and how the brain copes with pressure has grown immensely. In a world that is rapidly changing a different way of thinking and communicating is required.” Is coaching  so powerfully that it enhances human potential and learning and behavior? | Tania Burrow, Coach Masters Academy
6 Signs an Executive Is Not Ready for Executive Coaching: “Even the highest-performing athletes work with coaches to make them better.  Athletes may have team or position coaches, but many of the top athletes in the world employ personal coaches that work with aspects of their development, such as a strength or conditioning coach.” This article shows how companies can leverage Executive coaching as a significant investment in a leader’s growth. | Elevate Corporate Training
The professional development trends to watch in 2020: “Many people are feeling lost in their careers. Trying to navigate a VUCA world – an environment that is volatile, uncertain, complex and ambiguous – creates a lot of opportunity for confusion and distress. Feeling lost is perfectly normal. It is a sign that you are evolving as an individual in spirit and mind.” The authors predict the biggest trends in coaching and L&D in the UAE. | Gaj Ravichandra and Leila Rezaiguia for Training journal
Digital transformation: how modern media habits can shape the future of digital learning: “In the past, the L&D industry mirrored peoples’ media habits and embedded them within the learning experience. The process of implementation can take a while, however, and by the time a habit becomes part of the learning infrastructure, it is already the norm or even outdated by the next new trend.” Do you have an innovative mindset to challenge traditional methods and approaches? | Kerry Pascall, Fenturi.

TRENDS
On the same theme,here is a selection of conferences that you might find useful
 
AC Co-Coaching: Harrogate Forum : Co-coaching provides an opportunity to reflect on your coaching style and to experience and experiment with new coaching techniques.
 
The 2020 Coaching Effect Summit: This annual event is a career-boosting, professional growth opportunity that every leader, manager, and coach should attend.

CONSULTING INDUSTRY NEWS

KLM-BCG to partner with Virgin Atlantic to digitize operations: “The KLM-BCG partnership, based on their shared vision of driving integrated decision making in airline operations, has developed, implemented, and marketed a suite of state-of-the-art Operations Decision Support (ODS) tools based on artificial intelligence (AI), machine learning, and advanced optimisation techniques” | WEBWIRE
Deloitte named a leader by Gartner in 2020 Magic Quadrant for Data and Analytics Service Providers: “We have entered the ‘Age of With,’ where the collaboration of humans with intelligent machines becomes paramount to success. Deloitte’s breadth of capabilities, from AI-led Strategy to delivering AI-enabled services, help clients become insight driven and drive value out of their investments in AI, Analytics and Automation” says Costi Perricos, Deloitte Global Analytics & Cognitive leader” | Deloitte
Cambridge Quantum Computing Announces Significant New Quantum Technology Collaboration With CERN: “We are excited to collaborate with CERN, the European Laboratory for Particle Physics, on this innovative quantum computing based research project,” said Ilyas Khan, Founder and CEO of CQC.  “CQC is focussed on using the world’s best science to develop technologies for the coming quantum age. Joining CERN openlab is a special development for any organization and we look forward to developing advances together,” he added.” |PRNewswire
US life sciences consultancy Putnam Associates enters the UK: “Putnam Associates has announced the launch of a new office in Chiswick, London. The new location sees the firm open its first presence in the UK and take a significant step toward expanding its European profile.” | Consultancy.uk

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 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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7 Effective Steps to successfully launch your Consulting Project

The importance of information in planning and managing your Consulting projects cannot be overstated. Information is essential for the success of any endeavor. And naturally, whoever has the upper hand in the game, has the best chance of winning. However, at the center of successful Consulting lies mutual respect and mutually beneficial business. It has always been our credo at Consulting Quest that it is the most productive approach to all types of projects.

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Top 5 Articles

7 Effective Steps to successfully launch your Consulting Project

The importance of information in planning and managing your Consulting projects cannot be overstated. Information is essential for the success of any endeavor. And naturally, whoever has the upper hand in the game, has the best chance of winning. However, at the center of successful Consulting lies mutual respect and mutually beneficial business. It has always been our credo at Consulting Quest that it is the most productive approach to all types of projects.

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