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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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This Week in Consulting: Managing Risk in an Agile Organization

This Week in Consulting

Wednesday, June 17th , 2019

Managing Risk in an Agile Organization

THIS WEEK’S MUST READ
“As organizations move to agile delivery, control functions, including risk, compliance and business control teams, will need to rethink their interaction models for executing credible challenge and advising the business in near real-time methods.”
In this paper, Protiviti shares its Agile Risk Management philosophy. Risk management has to be designed appropriately to keep pace with agile organizations. They define practices for next-generation risk management that are more agile and better aligned, allow for operational excellence, and are focused on customer satisfaction.
This Week’s Must Read is an insight piece from Protiviti on the foundations of agile risk management.
Read on to Find out More: “Managing Risk in an Agile Organization“

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THIS WEEK’S VIDEO:

Dr Salim Al-Harthi and Dr David Hillson explain the purpose of the “100 Risk Questions” video project, and outline the structure of the video series.

THOUGHT LEADERSHIP

What is enterprise risk management? How to put cybersecurity threats into a business context– “Security is growing in significance to effective enterprise operational risk management Tight alignment with both the ERM and crisis management programs is essential.” Many companies still have a traditional approach to enterprise risk by assessing financial, regulatory and operational risks. But cyber risks are an increasing part of the equation. Are ERM program mature enough to assess these new risks?  | Maria Korolov
The future of risk management: “Firms should focus as much on risk response as on risk mitigation,” advises John Drzik, president of global risk and digital at Marsh, one of the report sponsors.” From cyber attacks to physical risks, are all low-probability/high-consequence events truly beyond our ability to identify and manage? | Helen Yates
Confronting the risks of artificial intelligence: “With great power comes great responsibility. Organizations can mitigate the risks of applying artificial intelligence and advanced analytics by embracing three principles.” We have all acknowledge the potential of artificial intelligence. But are we prepared to manage the risks that will arise from a broader application of AI in our organizations?   | Benjamin Cheatham, Kia Javanmardian, and Hamid Samandari, McKinsey
2019 The state of Risk Oversight: “An increasing number of organizations have embraced the concept of enterprise risk management (ERM), which is designed to provide an organization’s board and senior leaders a top-down, strategic perspective of risks on the horizon so that those risks can be managed proactively to increase the likelihood the organization will achieve its core objectives.” The portfolio of potential risks is increasingly complex. How do leaders identify, assess, and manage these risks? The article presents an overview of enterprise management practices.  | Mark Beasley, Bruce Branson and Bonnie Hancock, North Carolina State University
The Global Risks Report 2019: “Profound political, economic, societal, technological and environmental transformations are occurring at an unprecedented scale and pace and have become a part of day-to-day business life.” Is your company responding effectively to the risks it is facing? The 14th edition of the Global Risks Report, prepared by the World Economic Forum, is compulsory reading if you are interested in risk management. | John Drzik, Marsh & McLennan

TRENDS

On the same theme,here is a selection of conferences that you might find useful
 
What Keeps You Awake at Night? :Discover proactive risk management strategies to overcome recession fears, emerging risks, and reputational risk.
 
Risk USA : Re-inventing risk management in a radically changing financial landscape.

CONSULTING INDUSTRY NEWS

New Studio Blockchain Accelerator by IDEO Gets Amazon, Fidelity, Deloitte and Messari Backing: DEO CoLab, which is a subsidiary of IDEO, has found companies such as Fidelity, Amazon, Deloitte, Messari, the Ethereum Foundation and the Stellar Foundation as important partners in this enterprise.  | BitcoinExchangeGuide
A.T. Kearney Research on In-Store Consumer Retail Technology Finds Retailers Missing Opportunity to Meet Consumer Expectations Around In-Store Technology: The 2019 Consumer Retail Technology Survey, found that while 75 percent of consumers are aware of at least one retail technology, only 33 percent have experienced any. When it comes to in-store technologies, most retailers are lagging behind consumer awareness of them in terms of providing an experience involving one or more. | Cision PR Newswire
Capgemini launches first technology venture capital fund: International professional services firm Capgemini has announced it will expand its offering to start-ups with a new technology venture capital fund. Firms which successfully court the fund will receive an investment between €1 million and €5 million, as well as access to assistance from Capgemini’s consultancy business.  | Consultancy.uk

Estée Lauder Expands OMD Hong Kong Remit : Estée Lauder in Hong Kong & Macau has appointed OMD Hong Kong to manage the media brief for its portfolio of prestige skincare, makeup, and fragrance brands. | Bobby McGill, Branding in Asia

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

The Specialization Dilemma, Degrees of Specialization, and Differentiation – How to Select the Best Consultant?
If you are trying to get the best and most accurate snapshot of the various degrees of specialization in Consulting ...Read More

Challenges of Open Innovation and How Consulting Can be a Catalyst for Open Innovation
"For good ideas and true innovation, you need human interaction, conflict, argument, debate." - Margaret Heffernan Open innovation is the use ...Read More

8 Biggest Reasons Why Organizations Need a Consulting Firm and How Consultants Cater to Clients’ Needs
Businesses today are facing a growing number of challenges. And as an executive, you are often under pressure to find ...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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Challenges of Open Innovation and How Consulting Can be a Catalyst for Open Innovation

“For good ideas and true innovation, you need human interaction, conflict, argument, debate.” – Margaret Heffernan

 
Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.
Beyond the extended role given to R&D, the concept also requires a contribution for all stakeholders in the company. Rendering the innovation process much more collaborative and guess what … open.
As we discussed in a previous blog post, the main sources of Open Innovation are:

Academia – universities, labs, and research centers
Customers, Suppliers and Business partners – their unmet needs, issues, and suggestions for product improvements
Industry Groups and Professional Associations where sharing of thought leadership and newest developments, is happening.

Optimize your Consulting Spend

Consultants are selling their time, or more precisely, the access to expert knowledge and execution workforce during a certain period. The potential of production of a Consulting firm is the amount of time available for billing. Every day not billed is lost, just like an empty airplane seat.

Read More

And now here are some of the new challenges:
 
– Implementation of Open Innovation –
Recent reports revealed that about 80% of organizations are engaged in some kind of open innovation. But only a few would qualify those efforts as successful
 
– Balancing Act –
Cooperation of large companies & small start-ups. It’s a known fact that many small companies have reservations about Open Innovation collaboration with large corporations. It’s a matter of building trust and identifying common interests and mutual benefits.
The Virtual Technology Cluster (VTC) Group program provides a complementary platform for all existing accelerators, incubators, Academic programs, etc. as we focus primarily on connecting the innovation within each VTC to revenue.
 
– The Benefits of Curated Innovation –
The VTC Group attempt to take a much more curated approach to innovation. They aim to provide companies with a customized ecosystem of startups, academics, and government agencies to help bring the latest innovations that are happening in their field.
This curation process is crucial as there are considerable, and often unforeseen costs involved with open innovation.
 

How Can Consultants Become a Catalyst of Open Innovation for Your Organization? 
The outside world offers a plethora of opportunities in using Consultants as your “agent” in successful Implementation of Open innovation.
– Facilitating collaboration between large and small companies – Here is a challenge that both large and small companies face –  Large companies are often struggling to explore disruptive ideas as they focus on their core business. Small companies can be fast and agile in developing new ideas, but often struggle bringing these to the market as they lack the means and capability to do do, but if you find ways to combine their resources, the results can be quite interesting!
– Act as your sparring partners –
It can be beneficial to keep the line of communication open with a limited set of partners and bounce ideas as sparring partners. Besides, in those conversations, you manage what you want to disclose or not.
Last, when it comes to getting ideas, don’t underestimate the power of your procurement processes. Leveraging RFIs (Requests For Information) is a way to gather some elements before launching a full-fledged project.
Obviously, some RFIs have to turn into projects at some point. Otherwise, consultants could see it as brain picking, and the source and quality of what you gather will dry.
– Being a source of ideas –
As one of the senior partners from a large consultancy puts it: “We were developing the big idea and selling it.” Consultants were pitching strategy ideas and helping to bring them to fruition.
Today projects have evolved in sizes and shapes, but the scheme where consultants are pitching their ideas remain.
Consultants are also screening and processing a huge amount of information to stay current in their industry of specialization. With the emergence of dynamic start-up ecosystems, consultants have also started to maintain a mapping of the most recent and relevant ones. Oliver Wyman produces on a regular basis an interesting mapping of the start-ups in the procurement field.
– Facilitating innovation task forces –
If you are re-inventing your business or a business unit, the first step will be to help you determine what you expect from your innovation but also what are the limits that you are placing for the exercise.
Facilitation can be very useful to create the conditions to spur innovation. You can find in the market all kind of facilitation services. It ranges from the innovation consulting firms to futurists, that can help you project yourself a few years down the road, taking into account megatrends and technological progress to look at what the future holds. 
– Connecting you with third parties –
New technologies have made it possible to leverage the power of crowdsourcing. Companies like Innocentive and Nine Sigma, for instance, are pioneers in crowdsourced innovation. They help companies to define the problem they are trying to solve. They then organize challenges that can be internal to the company or leveraging their huge network of experts. They can also create specific galleries where clients are exposing their main challenges for experts to solve.
Beyond Crowdsourcing, consulting firms have experience with multiple customers on the same subjects but through different angles. They can also help establish connections when discussions between their clients would prove valuable and beneficial.

If your organization aspires to grow, you need to incorporate open innovation, build an innovation machine or innovate in your operations. The right consultants can be the catalysts you need to spur your innovation. To find out how we can help you, please connect with us today to discuss further.

Book your call

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Understanding consulting fees to make smarter decisions

You might be nonchalantly asking yourself, why do companies hire Consultants?
Great question!
To improve a process, to save money, or to get a fresh perspective, but most of all, to get access to very specialized skills that great Consultants can bring in.
And as the business environment constantly evolves, it’s safe to say companies need to evolve as well.

“The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” Mark Zuckerberg

Now let’s have a look at Consulting Economics – 
Consultants are selling their time, or more precisely, the access to expert knowledge and execution workforce during a certain period. The potential of production of a Consulting firm is the amount of time available for billing. Every day not billed is lost, just like an empty airplane seat.
They charge per time spend.
So the fee structure is usually geared to optimize the utilization rates. As for products or services you might be more familiar with, this ranges from Cost Plus to Value Based.

Know the Consulting Category

Businesses today are facing a growing number of challenges. And as an executive, you are often under pressure to find solutions to multiple problems. What value can Consultants bring your organization?

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Consulting Project Fees Framework –
Daily Rate: For smaller projects or exploratory phases, the Consultant can propose a negotiated daily rate. The total fee is then calculated based on the real number of days spent on the project.
Flat Fee: The most common fee structure for large projects. The Consultant will evaluate the work to be done and the deliverables to be prepared, and define the expertise and time needed to deliver the project. Afterward, two approaches are possible. Taking the workload based approach using daily rates or use this as a reference but price based on the value to the end client.
While the following breakdown is standard, remember to focus on the benefits and the value, as that’s the most important!
Performance-Based Fees: This fees structure, also called success fees, is linked to the achievements of pre-defined objectives. It is particularly effective for projects when the results can be easily measured, such as cost reduction, or top-line improvement. This often takes place as a bonus on top of a flat fee structure.
There are also other occasional fee structures:
Retainer: A retainer is a monthly fee negotiated with a client, based on a certain number of hours of support per month. This fee structure is mainly used by coaches or trusted advisors. It is often combined with spot projects since a retainer is usually the best way to be the first one aware of projects to come.
Equity-based Fees: This fee structure is often used with fast-growing start-ups that have little cash upfront or in case of turnaround situations. It is then up to the Consulting Firms to adjust the resources to balance risk and value creation.

Percentage-based Fees: The fees here are calculated as a percentage of a project or transaction amount and often used for M&A projects, for instance, where the consulting firms play a facilitation and brokerage role too.
Hybrid Type Fees: And finally, some project fees structure can be a hybrid of various fee structures such as a retainer with a negotiated daily rate when the amount of monthly hours is reached, a flat fee with an additional success fee, etc.
The best parameters to define a project price –
Since Consultants are primarily selling their time, the time spent on a project is the main cost driver. Usually, the price is calculated as the product of the daily rate per the number of days spent on the project.
But another essential parameter is the team composition. The experience can make a huge difference. You can expect a multiplication factor of 5 or more between an experienced partner and a newly-graduated analyst.
Another element is the share of time spent on the project. A full-time assignment is pretty straightforward: the consultant is supposed to be on site most of the days. Any part-time assignment can be vague, and very difficult to verify.
Pyramid structure to explain fees –
Part-time assignments of very experienced consultants can have a significant impact on the bill and can be extremely hard to track. Many of you have probably experienced the team of experts in the proposal at 10% of their time that you have actually never used. In the same fashion, ramp-up and ramp-down of team members should be linked to clear phases.
The specific industry where clients operate is an overlooked driver of the price for Consulting Projects. You will have the high-end of the spectrum – the Financial Services or Energy, where Consultants apply a premium, and at the low-end the Public Sector or Non-Profit Sector.
Finally, don’t forget the expenses when you are evaluating your budget. On certain projects, clients have agreed to up to 30% of expenses. Some Consulting Firms prefer a flat fee, expenses included, to avoid such discussions with clients.
Understanding the Consulting Industry is a pre-requisite to optimizing your Consulting Spend. Knowing your options can allow you to reach for innovative solutions, and to get more for your budget.

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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The Perfect Consulting RFP or the Fun of Creating a Blueprint for the Right Consultant

A script to a movie, is what the RFP to the Consulting project is. And the Master of Film suspense can provide us with sound advice on how important that document is. The Consulting RFP holds the same weight when it comes to setting your project on the path to success, and in creating the value you expect besides the general scope.

“To make a great film, you need three things – the script, the script, and the script.” – Alfred Hitchcock

How to craft the best and most effective Consulting RFP?
The single biggest objective of the RFP is to provide your prospective consultants with a clear picture of your needs and issues, and the desired outcomes.
To ensure the success of the project, we comprised a List of the Top 10 Secrets of the Perfect RFP.
The goal, of course, is to find the right and the best provider uniquely suited to you.
1. Don’t rush it, and include all the elements in your RFP –
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 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.

Know the Consulting Category

In this post, we would like to talk about two extremely important elements that determine the project’s success. Passion and value created.The type of Consultant you decide to hire should not only be based on the right expertise and experience, but their passion and commitment to deliver the best value.

Read More

2. The most important elements in the Consulting RFP  –
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.
3. Looking 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 find out if they are right for you and best fit for your project?
4. Adapt your short-list to the project’s Budget and Timeline  –
Look closely at the scope of the project, the budget, and the internal procurement policies to define your criteria of selection for the short-list. Be mindful of your time and adapt the length of your short-list to the level of priority and the budget of your project.
Small and Large projects –
When you have a very tight timeline or for small projects with limited impact on your business, prefer a small short-list too so you can spend enough time on the proposal and the references checking. We recommend to not go 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 Consulting RFP

5. 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 contributors on the project.
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.
6. 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 details of the project and make sure the consultants have well-understood what is at stake.
If you have a large number of candidates, a clear Consulting 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.
7. Assessing 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.
8. 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.
9. Identify the most promising proposals –
When you are 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.
10. Discover and resolve any uncertainties –
You should also be able to put your finger on the uncertainties in the proposals 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 Consulting RFP if necessary and assess the fit with your teams.

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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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.
With that said, let’s discuss this topic in more detail.

As a general rule, the most successful man in life is the man who has the best information. – Benjamin Disraeli

There are some important points for consideration here.
Before you launch your next Consulting project, you need to review some critical aspects, such as:
1. The downside of asymmetrical information –
And why should you care as a client?
Asymmetrical information, otherwise known as information failure, refers to a situation when one party in a transaction has more information, than the other party. Almost all economic transactions involve some information asymmetries.

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Management consulting companies have mastered the art of selling “digital transformation” projects to clients, but still struggle to adopt digital tools in their business model.

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2. How does asymmetrical information distort the Client-Consultant relationship? –
Asymmetrical information is particularly present when it is difficult for the client to judge the quality of the product or service. In Consulting, partners and consultants know their industry and their trade inside out, while the clients and their buyers have limited information.
3. Quality of Consulting services – Market Insights –
You might be familiar with the work of George Akerlof “The Market for Lemons”, where he explained that in certain markets, it’s difficult to distinguish the good product (“pears”) from the bad product (“lemons”). To mitigate the risk, the Buyer will use the average statistics of the market while the Seller has detailed information for each product. The Seller will tend to sell the product of lower quality to minimize their losses, and the best product won’t be sold. As a result, the market will shrink, and the average product quality will decrease. The case for Consulting is very relevant, as well. And as a Client, you need to be aware of these insights.
4. How to overcome the disadvantages when buying Consulting services? –
Unless they are handling several consulting projects a month in each capability, buyers of consulting services are at a disadvantage when negotiating with consulting providers.As a result, they might become risk-averse in their choice of consulting providers and choose consulting firms based on mostly their reputation or their existing relationship. The winners then are the large consulting firms that provide constant high-quality work and are excellent at building relationships.

How to get started? – 
The 7 Most Effective Steps in Launching Your Next Consulting Project-
If you are confident that you like to start a Consulting project, these are the most effective steps to follow:
1. Define your needs.
The definition of the scope of your project is a compulsory step in the RFP (Request for Proposal) process. You need to gather a team made of the major stakeholders and agree on the expected results, timeline, and budget for the project. Even though you are thinking of bringing in external resources to lead the project, the sound principles of project management still apply. Determine the real problem to solve and the project objectives. Many consulting projects fail because the scope is too vague and too broad.
2. Organize a competition among the prospective providers.
Organizing a healthy competition is not that complex. You have to keep in mind that the goal of the process goes beyond the sourcing and focus on the success of the project. Organizing a competition without putting all the candidates in the right conditions to give their best answer is meaningless. You need to bring in relevant potential consulting suppliers and give them a fair chance to get the project.
3. As a client, you are the boss.
Don’t let the Consulting firm dictate the pace or the content of the conversation. Explain your process beforehand. They need to give you one contact person, and to comply with your rules.The same applies to Terms & Conditions. Work with your documents based on your internal policies. Define, for instance, your rule for Travel expenses: Expenses capped at 15%, pre-approved by your teams, and based on your Company policy. Be fair to all consulting firms and apply the same to rules to everyone.

4. Be the “Early Bird” or start the process early.
Most of the time, you are not in such a hurry. When projects are complex, integrate Q&A sessions in the process. In all cases, give the consulting firms enough time to prepare their proposal. They will only be more detailed.
Generally, response turnaround times should be in the range of one week for a small project, two weeks for a standard consulting project and three to four weeks for a very large project (PMI, company-wide transformation, …).
Anticipate also spending some extra time for back-and-forth communication with the consulting providers to adjust the proposals
5. Sharing the roles.
As a general rule, business lines should focus on the Business Expertise, and Procurement should bring their Consulting and Procurement perspective to the table.

6. Create excitement.
If you decide to work with Consultants, you are interested in their analytical skills, their expertise or their outstanding communication competencies. Don’t waste their talent (and your money) on menial tasks. They are better employed at complex projects where they can do their magic. Besides, they might not be interested in working on small projects, and your project could go down on their priority list. And it might not be ‘good news’ in regards to quality and expertise.
If you are looking more for another pair of arms, or data crunching, you might prefer freelance platforms such as Catalent, TalMix, even networks like 2PS or Eden McCallum. You will find bright individuals ready to take on very small projects or interim work.
7. Time management and timing.
If you can afford it, take your time. It is sometimes difficult to translate the business challenges and the needs into a project. You might not be sure even if the project will happen, or have a clear scope in mind. The RFI (Request for Information) can be a good way to collect and leverage information. It will help you refine your approach to solving the problem and develop consensus within your organization. It can also be a smart way to narrow the number of contestants on your list before engaging in the RFP process.
Be careful to give a fair chance to all the consulting firms you engaged in your RFI, so your company is not seen just as a brain picker.
When the scope is clear, you can take an educated guess at how many consultants you need for the project. You can also think about the value expected from the project. That should help you define ballpark how much you are ready to pay for that project.

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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Top 12 Overlooked Challenges in Digital Transformation That Can Prove Costly to Clients and Consultants.

In the new digital economy era, the demand for change to the traditional consulting business model is more pressing than ever. Digital transformation is providing consultants with nearly 40% of their revenue, but still, there are plenty of challenges for Clients and Consultants as well.
The good news is several levers can be implemented to guide Consultants and Clients in the right direction.
There is the shared goal – Clients and Consultants aspire to become digital enterprises.
And it’s interesting to see is how Digital transformation is changing Consulting business models, and more specifically, the challenges that Clients and Consultants now face.
Consulting firms still have many hurdles to address to be able to exploit this opportunity, and to avoid being disrupted themselves by new forms or automation.

“Problems are good, as long as you solve them quickly.” – Meg Whitman
 

We have a developed a List of Challenges that represent new opportunities as well-
1. Adoption is still slow –
Even though Digital transformation is happening, and Consultants are adding digital service offerings to their portfolios adopting digital tools to enhance their capabilities, the process is still slow. The slow digital transformation of many consulting firms is inexcusable. Take a look at the websites from the consulting firms in your network, and you will see if the shoemakers have good shoes.

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Some Consulting Firms are just more expensive than others. The real question that you should ask yourself is: “What is worth the investment?”

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2. Clients expect better value and customized solutions –
Clients in the digital economy are demanding more value from day one and customized solutions unique to their specific problems. New upstart competitors leveraging data and technology are beginning to make waves. Should the clients take the usual route through consultants or embrace the disruption proposed by fashionable start-ups.
3. Stronger integration –
Adopting new consulting business models that leverage digital applications is crucial to the transition of Consulting firms into the Digital transformation economy. For example, Accenture started to implement Agency-type services that comprise of ad spending, media, and consulting together.
4. Optimization of the Intellectual Property Value –
McKinsey Solutions lead the way with their Productized Approach in an attempt to get the best value of their intellectual property. BCG is stepping in the same footsteps with several tools that look extremely close to the Mc Kinsey ones. See for instance Key by BCG vs. Wave by Mc Kinsey. Another productization is offered by a company like nine lenses industrializing assessments (maturity models, capabilities, …) for all professional services from consulting to talent.

5. On-demand Subscription Service –
First introduced by GLG Introduces, the As-A-Service Model, this new opportunity needs to be tested as a business model.”As-a-service” will include more long-term, smaller projects rather than large-scale projects for a fixed period.Subscription pricing, instead of billable hours, and on-demand services, is also a new financial model that will gain ground.
6. Consultants need to lead by example  –
The challenge to Consulting firms seems that first, they need to adopt digital transformation, then promote it to clients. Management consulting companies have mastered the art of selling “digital transformation” projects to clients, but still struggle to adopt digital tools in their business model. 
Also, digital transformations promoted by consultants need to be pragmatic enough. Aspirations do not always convert at the bottom line level, and the level of risk associated with digital models is quite high.
7. New significant cost savings for Clients  –
The significant cost savings that Digital transformation can bring represent an attractive proposition. If clients can save enough thanks to digital in their operations, it can fuel other profound transformations in other areas. From digitizing processes to the digitalization of ways of working, the opportunities for savings are almost unlimited.
8. Embracing Digital transformation internally –
Consulting firms followed different strategies to deliver digital transformation projects, with a strong focus on how to best serve their clients externally more than how to embrace a digital culture internally. A good indication would be the number of Chief Digital Officer within consulting firms. Rather limited, isn’t it? Are consultants sharing best practices or re-inventing them? How codified is knowledge ? Are they using digital learning platforms …. Do they take advantage of open innovation?
9. Opportunity to attract top Tech talent  –
Thanks to the attractive elements of the consulting career such as low risk, higher salary, diversified work experience, and fast career growth, Consulting firms can attract the best tech talent, at least those not joining the GAFAs and have them join their digital transformation teams. But the competition is fierce with the start-up world and the sirens of venture capital.
10. Pressure on Consultants to deliver top-notch digital transformation expertise –
We see digital transformation as a massive opportunity for growth for clients and consulting firms. Businesses will have to rethink their business models and processes to succeed fundamentally. Clients will be very selective in choosing their business partners while willing to pay high consulting fees to ensure their business doesn’t get disrupted in the Digital transformation age. This calls for creating a successful differentiation among Consulting firms, as they offer similar sets of expertise.
11. The emergence of Crowd Consulting –
As an evolution of innovation crowdsourcing, consulting crowd consulting could provide great value to the clients to solve micro battles, allowing them to access the best possible expertise and insights irrespective of which Consulting firms they decide to work with.
From a Consulting Firm standpoint, it raises similar questions. Should Consulting firms build the capabilities in house, develop a network of reliable experts and subcontractors or Should they rather rely on digital platforms ?
12. Clients’ capability development –
One of the main challenges for both clients and consultants remains capability building of clients. In any consulting project, capability building is important, to ensure the implementation of the strategy, but even more demanding in Digital Transformation.
As client gear to embrace digital transformation, they will need to staff at various levels. Implement governance to manage demands for Digital Transformation. Create catalysts in the organization to promote digital culture and propose low-cost rapid prototyping. But also connect the ideation and project management properly with the rest of the IS infrastructure without hampering speed with legacy processes. Did anyone say agile?
As we outlined the main challenges and opportunities in the Digital Age, we know that every client faces a unique set of questions. We welcome the opportunity to discuss your specific needs and see how we can further assist you in your Digital transformation journey. Do not miss the chance to step up your digital strategy today and bring it up to pace with the changes transforming your industry.

If you want to share your experience on digital transformation, or need help to get started, you can just book a call. We are always happy to help.

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The African Consulting Market is focused on Strategy and Human Capital

Welcome to the fourth 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.
In the previous issue, we discussed that Large Consulting Firms (with 1000+ employees) make up one-third of the consulting firms in Africa. Despite the strong presence of foreign companies in the region, 57% of the consulting firms are in fact only based in Africa, and almost half of the companies have less than 50 employees.
In this issue, we will take a look at the top capabilities of the Consulting Firms in the region and how the figure compares to that on a global scale.

The Capabilities
According to Consulting Quest’s research and data from the Global Directory, the Top Three Capabilities in the African consulting market are Strategy, Human Capital and Operations. Technology, being the most common capability among large companies (with 1000+ Employees), is the #4 biggest capability in the region, while it is only ranked #6 globally.
The total number of capabilities covered on average is 2.5. Interestingly, however, almost a quarter of the consulting firms in Africa is specialized in only one capability. Niche, local and small consulting firms are on the rise.
In the next issue we will dive into the Industries of the consulting offering and explain how the overall consulting offering is not reflecting yet the local needs.
 

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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.

Never Miss Another Opportunity with the Right Collaboration

Most talented small and medium-size consulting firms are likely to have run up against the same type of frustrating conundrum while securing new work: staffing limits. No, this is not simply a matter of the number of colleagues on board. Instead, we are focusing here on other staffing-related limitations:

What if an opportunity at hand includes a specific area of expertise that your firm currently lacks?
What if a given opportunity requires widespread geographic and/or cultural challenges?

The good news? There is one word to ensure you never miss an opportunity: collaboration.
Effective consulting firms innately understand and value the idea of collaboration. The internal work habits of effective consulting firms reflect a constant flow of interconnecting collaboration. After all, consultants collaborate with clients all the time—and train clients’ staffs to strengthen their own internal collaboration.
Let’s take a closer look at turning to collaboration to enlarge your consulting firm’s circle of opportunity. But first, we’ll briefly review impractical paths to avoid, as they may end up doing more harm than good.
Impractical Paths
The Eager Beaver
The eager beaver is the one who jumps up and says, “Yes, we will do it!” while not quite knowing whether the specific expertise is there, sufficient consulting time is available within the client’s timeframe, or the ability to reach the client geographically is practicable. It’s similar to that old joke about the piano mover who says, “I got it, I got it, I got it …I don’t got it,” as his end of the piano crashes to the floor.
We’ll just call Charlie Whatshisname.
An opportunity comes your way, and you realize that you will need to add one specialist to round out the best team to tackle the job successfully. Possibilities race through your mind until you recall that at a recent conference you met Charlie (what was his last name again?) who has just the right experience. Or does he?

Do you know the depth and breadth of his expertise?
Does his value proposition complement or clash with yours? What about his consulting style?
Have you checked references?

The downside to precipitous consulting decisions? Damage all around: to your reputation and professional relationships, to your ability to attract new clients, and most importantly, to your and your client’s bottom lines. It is much better to take a pass than jump in too hastily and unprepared.
So how can you accept and deliver on the opportunities that come your way, without taking one of these impractical (and risky) paths? Read on to learn how collaboration can rescue you from missing future opportunities and provide the value your customers seek.
Preparing for Those Forks Along the Path
Different forks along the path can stop consultants in their tracks—or worse, lead them astray—unless collaboration is built into the equation. Understanding those forks is the best preparation for deciding to create new collaborations. Here are six forks to look out for:

If yours is a generalist firm, you often face the tough choice of whether to take on a job yourself, take on a subcontractor, or take a pass in favor of a specialist.
On the other hand, as a specialist, you may be asked to expand a project into areas outside your expertise.

Grow your Consultancy

While you may not have current problems with recruitment, finding the appropriate level of staffing is tricky. 

Read More

In today’s global economy, some assignments will require a simultaneous presence in more than one part of the globe. For example, a manufacturing firm may need you at headquarters and at their plant, half a world away. A high-tech enterprise may require simultaneous services at their site and the site of an important partner on another continent. In other words, while some assignments are manageable with minimal travel, others require you to decide which fork to take: a consulting partner, or a pass.
Globalization also provides the chance to land choice assignments with clients and stakeholders anywhere in the world—an exciting opportunity to be sure, but yet another fork along that path. I remember the story of a French consultant asked to facilitate the cultural integration between Korean and Chinese workers on the Chinese border. That French consultant faced the question, “If not me, specifically who would be the right fit to handle this project for the best outcome?”
Let’s say you are considering taking on a consulting team as a subcontractor for a sizable project. Have you explored their comportment with clients, their stances on the situation facing your client, and how they go about working with a client’s staff? A partnership that works at cross purposes or is perceived by clients as incompatible will not only confuse clients but fail to provide the quality outcome the client deserves.
The nature of a project defines your consulting relationship with the client’s staff. Some projects require you to be perceived almost as one of the team. Yet, the needs of that client may evolve, altering the nature of the work, which now may require you to be the bearer of tough messages—creating a perception among client staff that you are Dr. Jekyll and Mr. Hyde rolled into one. It’s more than uncomfortable; it impacts your ability to serve the client’s needs effectively. Are you ready to pivot to a collaborator?

Tapping the Right Collaborators
The ability to tap the right collaborator is your next challenge.
First, be clear about the scope and boundaries of the collaboration, before you approach a key potential collaborator. Here are three options:

Pitching the project together as a partnership: You may gain a competitive advantage to land the assignment with the combination of your respective skillsets and credentials.

Subcontracting deliverables: It makes sense to turn to this option when you need a wider geographic range during the project and/or simply more help.

Brokering a new consulting relationship between your client and another consultant: The consultant in question may just be the better fit for a specific assignment—allowing you to bask in the glow of the value you have added for the client.

A partnership, of course, may be the most interesting and rewarding path to follow.
Building a Collaborative Network
One way to ground your decision to collaborate is to take the time to build a network of highly qualified specialists, over a wide geographic area, whose value propositions and styles mesh with your own.
Vetting can take quite a bit of time up front. However, you can minimize that by taking a hard look at the types of work coming your way and the geography you would need to cover to handle those opportunities successfully. Look for specific partners who are able to fill the gaps you have identified in your firm, and don’t forget to factor in their potential availability.
Regardless of how natural a networker you may be, if you are like most consultants, your time is tight and your current network typically consists of former colleagues, some consultants with whom you have crossed paths, and former clients-turned-consultants.
Fortunately, for those times when you encounter an assignment leading to one of those forks along the way, you can turn to a company whose sole expertise is helping you find qualified consulting partners with the specific expertise and geographic area that will allow you to never miss another opportunities, reduce your risks and deliver the value your clients expect.
Consulting Quest specializes in identifying consulting solutions that boost your competitive edge. We have put in the time, build the world largest database of pre-vetted the consultants, and understand that you need the perfect fit in terms of skillset, value proposition, style, culture, and geography. Do not hesitate to reach out if you want to discuss further how we could collaborate.

Consulting Playbook: Creating a Framework for On-shoring Export Controlled Work

The Consulting Playbook, Edition #28
An engineering company had engaged in a massive cost reduction exercise. The Executives of the company had identified weaknesses in the management of off shored work packages. This led to delay, inefficiencies and the costs were far beyond expectations. The company decided to on-shore the management of the workflow in its domestic center. They opted to bring a consultant in to facilitate the process.
Optimizing the Workflow
The consultant first moved to acquire an understanding of the remote and domestic center capabilities and the current utilization of those capabilities (indirect charging). It turned out the quality of the production of the off shored center was in line with expectations and but project management from specification to workflows management was presenting major flaws.
Afterwards they began collaborating with the senior leadership on site, to create local workflow focal points accountable for sending work to the domestic center, establishing a series of receiving counterpart focal points at the domestic center responsible for tracking and ensuring the execution of work packages.
The next task was creating buy-in at leadership level on the new scheme, by demonstrating to them on a pilot the quality of the end products, as well as showcasing signed plans designed right first time.
After the decision to generalize the solution, training the teams on how to use a workflow tracker.
Performance and Savings Followed the Adjustments Made
The project encountered a greater resistance to change than expected. However, thanks to a close collaboration with the HR function and leadership team, the implementation of the framework was finally delivered as per the plan and enabled the expected boost in performance and subsequent savings.

Additional Information

As of make or buy decisions on-shoring or off-shoring decisions are not always black and white. The key is in finding the right balance to maximize performance and focusing on core activities. Shall you on-shore in full? Breakdown activities into smaller work packages and strengthen the management of those?
One of the tendencies of historically integrated companies likes aerospace or automotive ones has been to position themselves as architect / integrators. Putting in place strong program and project management teams working mostly at the functional level and leaving the design and manufacturing to specialized partners. Those partners deciding, or not, to subcontract part of the activities to tier 3 suppliers.
However, if you decide to onshore in full, here are a few thoughts about Manufacturing locally again.
Making Local Manufacturing Strong Again
With Globalization and outsourcing of all types of jobs, production facilities and activities, on a massive scale, we don’t see the ‘Made in Here’ label too often today.
But getting sentimental about it, won’t outweigh the economic reasons supporting the trend. Despite the fact that trend has continued for a few decades now, there is a new change taking place, the reverse version referred to as “reshoring”.
As many businesses took advantage of the lower labor costs in Asia, and other countries, logistics and transportation fees have steadily increased as well, making the overall cost less attractive. Another factor that is affecting the overall price accordingly is the increase in wages in China, India and other countries.
Labor unions are also more willing to negotiate and agree to reasonable wages, aiming at keeping jobs and provide steady employment.
Also Western companies are more willing to employ Western workers provided they are well trained and skilled, additionally there is a tendency of shifting to full-time from part-time employment.
Another Factor shaping up the job outsourcing is the stronger Chinese currency, and its  increase in value.
The downside of offshore operations is also the extra expenses for inventory, potential waste, more risks, quality control problems, cash flow deficiency, etc.
All these factors and new developments made many Executives to reconsider moving manufacturing back.
The Biggest Benefits of Reshoring

Manufacturers can ensure better quality products
Smooth operations and less disruptive supply chains with lower working capital.
Better efficiency of the overall production line
Closer control over design, plans and execution of the final product
Higher worker productivity compared to some countries.
Shift in consumers’ mentality and willingness to pay higher price for goods and services produce locally.
As Manufacturers base their operations close to consumers to lower logistics and transportation costs, big Metro areas will reap the best job-creation rewards.

For Further Reading:

THE EVOLUTION OF GLOBAL BUSINESS SERVICES
Ten Key Procurement And Logistics Trends And How To Navigate Their Pitfalls
14 Ways to Reduce Materials & Cost of Goods Sold in Your Business
5 Pressing Issues Confronting Multinationals in Latin America
2016 Supply Chain Trends

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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.

Consulting Playbook: Overcoming Today’s Challenges in the Banking and Financial Services Sector

The Consulting Playbook, Edition #7
We all are aware that the Banking industry went through a lot of major changes and serious challenges in the past eight years. Banks are no longer perceived as the safest or most reliable organizations even though we can’t imagine economic activity without their ubiquitous presence. In today’s fast paced environment, the banks can be left inadequately weak in dealing with the changes.
Uniting Bank Leaders on Core Principles in Reorganization
The case below describes a leading European Investment Banking institution, created from a Co-Op group of companies that experienced disappointing financial results. The newly appointed CEO was given the task of repairing the situation. He also had to align the Financials, Asset Management, Insurance and Specialized services, on a new common strategy and improve collaboration among them. Often the general policies could not apply or benefit the entire organization. And that was the real challenge. The Executive Committee could not agree on a common vision and a future strategy.
3- Year Performance Boost by Incentives for Management –
The desired transformation was developed in a few steps:

The new CEO received support in the strategic realignment of all Leaders: Executive team, Management team (Directors for Core functions) and the Top 100 (N-1, N-2)
A variety of initiatives were implemented towards the new strategic plan with ownership from the Executive team (N-1) downward. The timeline was set at 1 to 3 years, to encourage both individual and collective performance and secure short term results without endangering the midterm transformation.
Each member of the Executive team designed implementation plans for strategic actions per the functions and the priorities, tied to individual performance for their N-1 and N-2
Various Committees and each of their members had been assigned objectives and targets aligned with their pay and Incentives plan for the Top 100.

Greater Performance and Profitability Achieved –
The impact of working with a Consultant achieved remarkable results. It contributed to aligning performance, new behavior, and created a favorable context where new links took place. The new Strategic Plan and its implementation aligned the CEO’s and the Top Team’s priorities. All the teams across the whole organization were mobilized and engaged for timely strategic plan deployment. Great financial and commercial results were reached during the first year of the strategic plan deployment. Improved cooperation among management, and empowered CEO in his role, with a strong grip on cost control and overall efficiency, achieved as well. Pay and incentives alignment were implemented for the Top Management Team and Top 100 Leaders.

Additional Information

Top 3 Concerns Banks and Financial Institutions are facing today and how they are being addressed:
1. Regulatory Pressure
After the economic crisis of 2008/2009 the government has put a great pressure on the financial services sector with increased Regulatory requirements, to prevent another such crisis. And banks have no choice but to comply and to continue to do so. This particular task can put a serious toll on budgets and staff training. Banking, risk management, and the responsibilities associated with that, stretch beyond limiting credit risk and procedures to monitor that risk.  Reliance on new technologies bring new challenges as well.
2. Retail Banking and Customer’s Satisfaction
After the 2008 Financial Crisis, the Consumer Financial Protection Bureau (CFPB) was created to educate customers about irresponsible banking practices. Banks are now a lot more accountable if making misrepresentations about products and bank services, and can easily be sued and sanctioned. And If you’ve waited in line at a local branch, you know how important fast and efficient service is.  But in many banks, that service is below the customers’ standard, and banks are trying to step up their offerings and clients’ service. With the advantage in modern technology and internet service, new and dynamic Financial Services are being offered, traditional banks are having difficulties in retaining their lead. Let’s hope retail customers are the beneficiaries of service improvements.
3. Cybercrime
Or commonly known as hacking, is one of the biggest security threats today. The extended digital exposure of the financial organizations, and the always evolving methods of cybercrime, increase the sector’s vulnerability, and is a top priority of concern. Any data breach can make the news, and result in tarnished reputation as well as loss of huge number of customers and revenue. Banks continue to fight cybercrime but unfortunately not very successfully.
For Further Reading:
– Top 6 trends that are redefining financial institutions
– 2016 Banking trends: Taking a closer look
– 10 Big Ideas for Banking in 2016

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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 enjoy the value creation process

Welcome Professionals…
…as a top management consultant, we all want to create perfect results for our clients. But striving for perfectionism can actually constrain our value creation process.
For a long time in consulting business, I concentrated on achieving perfect results. At my former employer, we were especially great at pointing the attention to areas that were not perfect, yet. Each time when my project leader or partner or eventually the client found some flaws in my work, I used to beat myself up for that. I interpreted every necessary additional iteration loop as a defeat. I was striving for perfectionism.
Years later I was able to discover the drivers behind this behaviour and change my point of view. I recognized that it makes me very unhappy over time to strive for the perfect end product. The end product will never be perfect and if it was, I would already be busy with the next big thing. By having this tendency, it would be impossible for me to stop working and feel satisfied about it.
Today my motivation is different. I commit to delivering the best value I can in a given amount of time. I set time slots for me to work on a specific project and then do the best I can. I embrace opportunities for iteration, because it helps me improve my work. As an additional positive effect, it takes my client on a journey through my value creation process. Communicating intermediate steps and results makes my client value the work much more.
Everyday I try hard to concentrate on the value creation process! I am not attempting to create a perfect end product, but to give my best. Hopefully, that comes close in the end.

Prepare your teams for when the Consultant leaves

You have decided to pivot to a consultant to bridge your company’s skills gaps, better optimize your profits, or boost your marketing and sales effectiveness. As an experienced executive, you completely get that you need a discrete plan—with its clear timelines and goals—and a winning RFP to attract the right partners in the first place.
What may get overlooked, however, is the critical point where the rubber will meet the road: how to follow up the work of the consultant.
After all, procuring a consultant is an investment and the return on that investment comes through the follow-up. Here are the seven most helpful tips for optimizing the return on your consulting procurement.
1. Aim beyond the project.
Envision what success will look like. No, not at the end of the project—longer-term.
Picture someone about to break a block of wood or concrete with a karate chop. If he aims for the block, he instinctually will start to draw back a bit just as he is about to make contact with the block. Now picture him focusing a foot past the block as he aims, then chops. Crack!
Aim past the project. That will help begin to mark the right follow-up path.

Use Consulting Strategically

(…) the procurement process doesn’t stop with the order. To be successful, it should be a long-term process that goes beyond the moment the contract is signed.

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2. Plan the transition from the RFP.
Remember, the RFP is all about procuring solutions, not just making a purchase. With that in mind, think long-term and include the ways to determine whether project goals were met and additional consulting support is needed once the consultant leaves.

Keep in touch. Executives and consultants should keep in touch to ensure that the consultant’s recommended systems and ideas work to resolve the original issue.

Yes, we’re talking about data collection—evidence that the new knowledge and systems work, fail, or result in zero changes that are meaningful. Build in the collecting of data points during the project for three to six months, or even a year afterward.

The data points need to measure the extent to which the solution you were aiming for does exist. You or the consultant can analyze these data as a way to determine project success, failure, or status quo, as well as the next steps to take
Include a compliance check within the RFP. Once the original project ends, the consultant should schedule a return visit to determine to what extent your team absorbed new lessons and how well new systems are being incorporated as intended.
The last deliverable could actually be the proposed way forward.

3. Decision time: figure out which recommendations to keep.
Just because you paid a consultant to address a gap and offer a solution does not mean that your company needs to jump in blindly.
The company’s senior executives can sift through the consultant’s suggestions and cherry-pick the ones that are most likely to solve the issue at hand.
Once that sifting occurs, meet with the consultant for feedback on what your team has chosen as the wheat and what’s the chaff. After all, the consultant may have experience with what result can occur (positive or negative) if recommendation A is kept but recommendation B is tossed.
4. Know the what, the how and the who before the consultant exits.
Clarity with regard to the next steps is key. Knowing what to do but not how to do it is a roadblock to success.
Before the consultant departs, take the time to make sure that everyone affected knows what to do next, and how to do it and that the appropriate resources will be allocated.

The combination of the what to do and the how to do it makes the difference between a return on the consulting investment or a loss. It’s not enough that employees just understand. The rubber won’t meet the road if they can’t also implement what they know they need to do.

Plan ahead to build in ways to manage implementation and potential failures.

Who will be accountable for implementing the plan? How will the activity be steered?
Who will be responsible for correcting implementation issues? How often and by what method will that person be accessible?

5. Plan to retain learned knowledge and skills.
Whether it’s staff turnover or vacation time, new skills can get lost in life’s shuffle. You need a plan to keep that new information at the forefront of employees’ work.

Is transferring knowledge explicitly part of the mandate?
Will you offer annual refresher courses? Online manuals? Access to the consultant via email or web forum? All of the above?

Will there be a mentoring relationship for an extended timeframe once the project ends? Mentoring often makes the difference between long-term ROI or loss on consulting investments. Just be sure to structure the arrangement with a timeline and clear data points for ending the mentorship.

6. Keep the door open to transformational ideas.
You know what often happens when you focus for a time on a project and then step away. New, perhaps even transformational ideas may pop up unexpectedly.

Depending on how your company is structured, novel ideas can float up to your senior team or through your project team. Or perhaps the consultant experiences a couple of brainstorms once the project has ended.

You will want access to these raw new ideas. Coming on the heels of intense project focus, they may contain just the right germ of an idea that, when shaped and cultivated, can provide an unforeseen breakthrough that boosts your competitive edge.

Explicitly create the potential for following up with the consultant on promising innovative ideas and approaches after the initial project ends.

7. Build in check-ins as a forcing function.
Finally, assuming that you found the consulting team helpful, build in check-ins at the frequency that matches your business tempo to take a fresh look at what was accomplished and perhaps what needs to be tweaked now to continue to optimize the original investment. These build-in check-ins as forcing function will also prevent business as usual from taking over.
Procuring the consultant and working through the project aren’t the goals. Sustainable solutions that boost your competitive edge are the goals.
Meeting those goals requires you to lead the company through a follow-up phase once the consulting team leaves to ensure the highest return on your consulting investment.

Consulting Playbook: Effective Identification of Growth and Cost Synergy Brings Higher Revenues

The Consulting Playbook, Edition #18
The case involved two big players in the Mobility Service sector. The two companies had decided to merge and had identified areas for synergies. However, they could not, for antitrust reasons exchange information prior to the merger. Given the respective geographical coverage and market share of both parties, the antitrust process was anticipated to be quite lengthy. In order to accelerate the integration, and to speed-up the materialization of the synergies both CEO decided to use some external support.
Quantitative and Qualitative Approach Produces Desired Outcome
The Consultant was hired to provide expertise with the merger, the new company’s launch, and more specifically to identify growth and cost synergy applicable to the newly formed company. Strategic direction and top priorities were outlined as part of working groups but it was now a key issue to move down to concrete actions. The project was especially important and expected to deliver the methodology for future growth and cost synergies, including progress-tracking and reporting. Two working teams comprised of senior executives from both companies, closely collaborated in the facilitation of the consulting clean team to ensure the successful outcome.
The Consultancy used a 2-stage Approach –
Preliminary Assessment
Following the executives’ decision to merge, costs and cost synergy were assessed to determine the potential benefits.
Interviews with key players from both companies were held, and the assessment performed was based on numerous documents and records – annual reports, market studies, presentations reviewed. The reached conclusions helped chart the merger and post-merger strategy. The work on the synergies was broken down into manageable work streams with two leaders, one from each company, to supervise the process.
Detailed Synergy Identification and Action Plan
While in the pre-clearance and pre-closing periods, each team using corporate and geographical coordinates, designed synergy targets relating to costs, headcount, and redundancy. These were broken further down into secured (concrete action plans) and identified areas where more analysis was required to determine exact numbers and measures. Those areas included :

Target Corporate Model
Target Regional Organizational Model
Procurement Synergies
Revenue synergies due to better positions, new capabilities and innovation applied
G&A (communication, general services, and legal)

After an intensive exercise of baselining on both sides, tracking tools were put in place to ensure a proper tracking of the synergies as they were progressively identified, confirmed and implemented.
Total synergy and performance realized across all geographical areas and the two companies additionally to each current company’s annual performance represented the equivalent of one year of operating revenues. The consulting team continued to support the integration for a few months and then transferred the reporting tools to the PMI team. Thanks to all the preparatory work, the materialization of the synergies after closing took less than a year.

Additional Information

Synergy Excellence – 6 Practices To Help You Aim for The Best Synergies
In many mergers, it’s not uncommon that synergies do not materialize as expected leaving the companies’ executives puzzled. This fact alone can be very disappointing to executives and staff alike. Let’s take a closer look at the possibilities of optimizing synergies. One of the underlying reasons for the sub par outcomes, is related to huge overestimation of the synergies due to lack of solid due diligence, board estimates, and a lack of clear understanding of the expectations of the merger.
However it is highly recommended to look at some mergers that over delivered, and see what practices produced these results.
We should also mention that synergies strongly depend on the company’s size and type of industry. A good example for lower synergies is the retail sector, while telecommunications companies often realize bigger synergies.
Here are 6 Practices to Apply for the Best Synergies:

Fact – Announced synergies in more than 65% of the cases are overestimated. It is important that companies have more realistic projections.
The best companies who achieved greatest synergies are the ones that had a clear blueprint in realizing their ambitious goals. They are the companies who reached full potential, and were able to minimize inefficiencies and reaped the fruits of scaling up.
Merging companies need more accuracy in calculating synergies. Costs prior to the deal must be well evaluated, and a deeper understanding of what can be gain with the merger is a must.
Also important is to set clear target of the costs compared to bigger and smaller competitors.
Using the Deal Thesis and function-by-function benchmarks can provide the best approach in evaluating the costs and the best synergies.
Setting ambitious goals of 5% instead of expected 1-3% in synergies, is achievable when all aspects of the merger are fully optimized.

For Further Reading –
– The World is Bumpy
– To Get Value from a Merger, Grow Sales
– Cost Synergies
– M&A: Identifying and Realizing Synergies
– Negative Synergies in M&A

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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.

What Is the Right Size for Your Consulting Team?

A consulting firm is a dynamic organization that is vulnerable to the fluctuations of the business cycle. New projects come and go, and the people who staff your firm tend to change over time. While you may not have current problems with recruitment, finding the appropriate level of staffing is tricky. A major economic event could shift the entire market, meaning that your company might quickly lose or gain projects that affect your staffing scheme. Whether you have too many staff on hand or not enough, firms rarely end up in the middle with the perfect number of consultants.
Due to unpredictable economic changes, it’s important to have a flexible staffing plan that accounts for factors affecting your firm’s optimal size, taking into account the structure of the business and the market demand. The appropriate level of staffing is not an issue that will go away. With too many consultants, you could lose profitability in the case of headwinds. Without enough consultants, your firm could miss important opportunities to grow and profit. In addition, having excess staff could mean that your firm accepts projects for which it isn’t qualified, which creates the risk of damaging your credibility. In a consulting firm, delivering great value and return on investment for your clients is a must have, but the key to profitability is finding the size and cost structure that works for you.
Optimizing the risk rewards equation
The driver for profitability, in all asset-intensive businesses, is optimizing the utilization of the assets. Consulting, despite being asset light from a tangible asset standpoint carries the bulk of its costs through salaries and follows the same rule as consultants on the payroll also generate the value. This means that you need to find the right trade-off to get the maximum economical performance results from the utilization of each employee, without overextending your human capital budget.
Besides sizing, finding the right equilibrium between base salary and bonus Is very often an underestimated lever. Many consultancies consider the total compensation as a fixed cost and link the bonuses to the quality of delivery without taking advantage of the flexibility it could provide.
Tying part of the bonus calculation to the economic profitability of the firm can not only mitigate partially the risk of the downturn but also drive the right behaviors from your consulting staff.
Another lever can be, to change the ratio between base salary and bonus to lower the guaranteed amount but grant higher rewards if the firm is doing well. This is a deal that many young consultants are more than willing to take as it mimics the classical partner structure the aspire to.

Sizing for the Unexpected
Just like staffing for any business, maintaining the right number of employees directly affects your profitability. Keep in mind that, once you have people on the payroll, you measure profitability by what remains after their checks clear your company bank account.
Your firm makes a financial obligation to employees, at least in the short term, by offering ongoing employment and perhaps benefits and perquisites. When you extend your budget for a certain number of staff, financial issues and downsizing might threaten your ability to keep them on the payroll. Or worse, the pressure to keep up with your payroll needs could lead you to unscrupulous or deviant behaviors to capture new business.
You cannot always predict an economic downturn. Because of this, your firm should add new employees in stages, so as not to overextend the payroll budget. It’s always easier to hire new consultants than it is to fire them, so be prudent. If you do have to begin downsizing, you run the risk of blemishing your firm’s reputation and damaging relationships with your consultants.
Investing in Non  Production activities
When reviewing you sizing assumptions it is important to anticipate that not all days will be productive.

Staff your Consultancy

When you have the energy and focus you need, you can build great product funnels and create value for your clients.

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First by design as assignments usually don’t align themselves to optimize your own schedule. Second as you need to dedicate some time to other activities that are key to the sustainability of your company. Those activities will range from commercial and networking to more knowledge related tasks on research, capitalization, thought leadership and knowledge sharing. This layer in your resource planning is extremely important as it will condition your ability to bring something fresh to your clients and also your flexibility to move from one contract to another.
Preparing for good news
Once you have defined the minimum size and added some resources to handle other activities, choosing the right size for a consulting firm is still not an exact science. As it turns out, with a sizing like this you might be unable to take additional projects and therefore to grow your business.
The secret formula lies somewhere in the ideal balance between internal and external resources. This means that you have enough full-time consultants on staff to provide stability and to inspire client confidence. While at the same time, you have successful partnerships with external organizations and individuals to meet the requirements of special projects on schedule.
You want the size of the staff to meet the level of projected demand. You also want your company to build a network of value partners and qualified subcontractors. This enables your firm to augment consulting staff when the demand for all projects exceeds your internal capacity. When you accept new projects, you can temporarily take on extra consultants. Later, you can scale down to the usual team size, especially after those extra projects are completed. Unless in the frame of a deliberate strategic move, none of your projects should extend your firm too far beyond its core competencies.

Partnering With Qualified Staff
While you may rely on external consultants, you must also ensure that each of these resources possesses the right skillset for the job. Not every consultant will have the appropriate qualifications for each new project. You may need a diverse recruitment strategy to attract subcontractors who can augment your operations.
Beyond the optimization of your cost base and the proper management of your company’s risk profile, working with external partners creates new business opportunities. When you expand your professional network, you can pitch new business. Your additional partners can bring capabilities that are complementary to your core business. At first, this may seem like conflicting advice, but your firm should begin by adding partners with capabilities that closely relate to your core competencies.

While you could augment your staff through relationships with other firms around the world, it’s important to choose those located in countries or regions that offer your company the biggest competitive advantage. The intent is to win new business. This occurs, in part, by attracting the interest of the companies that are familiar with your new business partners.
Finally Answering the Question: What is the Right Size for Your Consulting Team?
Your firm will eventually adjust the number of staff, hopefully, to include more consultants. This will mean that the pessimistic scenario is improving and that you are actually growing your activities in a sustainable way. Even though financial challenges may arise, you will agree that the best time to add more human assets is when things are going well. When your company is successfully completing its current projects and attracting more projects and your worst case scenario in term of planning can cover your internal staff it may be time to consider adding at least a few consultants to your team. In essence, you are scaling up to prepare for future growth while managing risks. Looking at your teams and discussing the capabilities needed for new opportunities, as well as factoring in the use of qualified partners and subcontractors, will help you to optimize your consulting set-up.
Balancing your current resources, while leveraging partnerships, doesn’t mean you need to fundamentally change your recruitment plan but those adjustments can make all the difference on your balance sheet, reduce risk, provide higher rewards to your employees and open up new opportunities to fuel your growth

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