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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 | What’s the right time to work with consultants

Podcast | What’s the right time to work with consultants

Working with consultants can help client organizations to accelerate their projects. But when is the right time to work with consultants?
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte & Laurent Thomas discuss value creation and timing when working with consultants.
Key Takeaway: The value created during a project can be technical or political. And most projects are actually a mix of both. There is not a one-fits-all rule for when to work with consultants. It depends on the company culture, its market and economic situation.

Podcast | How the consulting industry is evolving?

Companies are improving the way they source their consultants, the industry itself is evolving. Let’s look at why and how.
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains how the consulting industry is evolving.
Key Takeaway: Consulting is a strategic lever for client organizations to accelerate their transformation. The recent evolutions in procurement practices and the consulting value are changing the way clients buy. Will Covid be a accelerator for change?
 

Early Termination – How and When is Best to Do It

Early Termination – How and When is Best to Do It.

Let’s start by highlighting the main idea about the purpose of a Consulting project. Sustainable solutions that boost your competitive edge is the goal. Procuring the consultant and working through the project isn’t simply the goal.

Early Termination – How and When is Best to Do It
Meeting your 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.
When and if the project does not go as expected, you can consider termination.

“The very essence of leadership is that you have a vision. It’s got to be a vision you articulate clearly and forcefully on every occasion. You can’t blow an uncertain trumpet.” – Theodore Hesburgh

Terminating early – How to find a middle ground and agree on early termination?
Typically, contracts are considered terminated when the Consulting firm has delivered all the deliverables agreed in the initial contract, or the addenda, and has been paid in full. However, contracts can also be terminated by the client or the Consulting firm earlier. In that case, the two parties have to agree to facilitate the termination and prepare the transition. 

READ ALSO
It’s hard not to acknowledge the importance of speed in business today. Why Taking Advantage of the Disruption in the Consulting Industry.

1- Adapt the new scope to your needs
The pace of change is getting faster and faster. Between the moment you decide to engage a Consulting firm and the kick-off, many things can happen in your company. Think regulatory change, merger or acquisition, turnover in your senior management team. All these events could have an impact on your project, and very likely on the scope.
The first thing to do in this situation is to gather the stakeholders of the project and discuss the potential consequences of the termination.
Have a close look at your contract to see your obligations, particularly if you are required to provide a paid notice period to the Consulting firm. The notice period is meant to compensate for the drop in revenues on the Consulting firm’s side. If the project was expected to last several more months, the loss could be considerable. However, it is always negotiable, and you have to prepare a transition scenario.
Analyze the different options you have at hand and the potential costs associated and make your decision.
2- Don’t hesitate to stop the project
You have noticed that the Consulting firm is not delivering at the level you expected, and you gave them feedback and asked them to fix the issues. Too many executives turn a blind eye on underdelivering projects, especially if there is no obvious alternative. However, if the project is still not on track, you should consider terminating the contract.
When you decide to take that route, you will need a well-documented timeline showing the lack of performance, your warnings, the inability of the Consulting firm to improve the quality of the delivery, and the associated potential damages to your company.
Before you engage in the termination, confer with the stakeholders to find a solution such as changing the team, including the partners in charge of the project, reorganizing the governance, or rescoping the project.
If you decide to go through, your best leverage in the negotiation is the threat of negative publicity that a lawsuit could bring to the Consulting firm and the time to get paid. Analyze closely the performance of the consulting firm on the different deliverables included in the contract and define a fair exit scenario. Include the planning of the transition in the negotiation, as a final due deliverable. Also, always react before the end of the project. It will give you some room for manoeuver and leverage.
3- Other reasons for termination
There are other reasons for termination, such as breach of confidentiality or damage to the company. You will still need to trace all your decisions, the mistakes made by the Consulting firm, and their unwillingness to fix the issues. We recommend gathering with your legal team to discuss how to proceed on a legal standpoint, and with your stakeholders to find a solution that has the highest impact of your company.
Unless the damages caused you a significant financial loss, you would probably be better off avoiding legal actions and finding a compromise with the Consulting firm. Provisions for arbitration and mutual agreement on termination can be defined in the contract.
4- When the Consulting firm wants to terminate.
In rare cases, a Consulting firm may have the right to terminate the contract due to extreme circumstances. In particular, when they have misevaluated the project (e.g. find the environment significantly different than anticipated, mispriced the project, etc.) or face force majeure.
In most cases, the termination causes will have already been embedded within the contract, and there is not much you can do to convince them to reconsider their decisions.
Therefore, it is important to define in the contract the Consulting Firm’s obligation to transition their project responsibilities to your staff or a third party in an orderly manner and to clarify how to handle the associated fees.
5- Prepare your termination.
Carefully review your termination rights (as predefined in the contract) before purporting to termination to ensure your valid right.
The costs of termination can be very high, in particular, if you have to start again with an internal team or another consultant. Besides, the loss in time and realized value would never be completely recovered whatever your alternative might be.
When evaluating the cost of termination, take into account the cost of engaging with an alternative provider, such as those associated with conducting an RFP process, through to selecting the consultant, and after that, the costs of transition and transformation.
In the case of confirmed project cancellation, it is important also to give marketing and public relations people sufficient notice for them to plan and manage messages to internal and external stakeholders.
6- Pay the Consultants what you owe them.
The payments should also be aligned with the deliverables, not the time spent on the project. When you are reviewing the invoices, make sure they reflect the work done.
When you have launched a project, don’t forget to accrue the fees in your budget. If the project is launched at the end of the year, you can split the budget over the two years period.
If you are working with a performance-based bonus, determine the probability of success regularly to accrue the additional fees just like you would do for a Sales bonus.
7- Aim for a win-win situation – wrapping up on good terms
The purpose of every Consulting project is to produce mutually beneficial outcomes for both parties. That’s always preferable but not always achievable. The completion of a project is sometimes more complicated than just submitting the last deliverable. Once the project has drawn to an end, it’s time for a thorough evaluation. Now is the time to compare your end-results with your initial goals, which enables you to understand and begin to prepare the adjustments that are still necessary to make to reach your ultimate goal.
At this time, you can also evaluate the relationship with your consultant and whether they delivered on the initial promise. There are several elements that you must absolutely verify before you close the project and pay the last invoice:

All the deliverables must be submitted and complete. Do you have all the deliverables, as stated in the RFP, or the last version of the SOW? Were they delivered on time? Complete?

All stakeholders must agree that the project is over. Are the other stakeholders satisfied with the work delivered? Do they consider the project complete?

Your teams can take over without the consultants’ support. Do your teams know what the next steps on the project are? Has the consultant prepared and implemented a transition?

No project or professional relationship will be flawless. The project closure is an opportunity for you to give feedback to your project suppliers about your thoughts on the results, the relationship dynamic, and any other dimensions you covered in your project closure review above.
Giving feedback to your consultants will help them improve their business by gaining a clearer understanding of client expectations and identifying potential blind spots.
Clients rarely take the time for a complete debrief with the consultants, leaving the consultants with very few data to fuel their continuous improvement engines. Don’t hesitate as well to ask for some feedback from the Consulting firm on what could have been improved on both sides to start a common continuous improvement initiative. It is particularly important if you want to work in the long-run with this particular Consulting provider.
 

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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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 | What’s the right time to work with consultants

What’s the right time to work with consultants

How to organize to better manage your Consulting Spend

Leveraging Consulting can create massive value for your organisation but it requires for the Organization to be mature in its utilization and procurement of Consulting Services.

Podcast | How the consulting industry is evolving?

How to implement Demand Management ?

Your browser does not support the video tag.

Previous Weeks’ issues

This Week In Consulting: What is digital distruption for Corporate Finance?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week,October 21th ,2020, All you need to know about Digital Disruption in Corporate Finance.
read more

This Week In Consulting: Challenges and opportunities in High Tech

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week,September 23rd ,2020, All you need to know on what does the future hold for Strategic Communications.
read more

This Week In Consulting: What are the opportunities for Supply Chain during and after the pandemic crisis?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week,September 23rd ,2020, All you need to know on what does the future hold for Strategic Communications.
read more

Choose the best next step for you

Buy the Book

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

Podcast | Who does what in the Consulting sourcing process?

In order to launch a consulting project, you will need to put several skills and experiences that are often spread out over several departments. Here are 3 phases of the high-level process.
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains who does what in the Consulting sourcing process.
Key Takeaway: Consulting Sourcing is a team play. As a rule of thumb, the business lines will bring their business and their understanding of the problem, while the procurement team will make sure the process is compliant with the Company policies and best practices.
 

Podcast | How to implement Demand Management ?

There are several metodologies that can generate value for companies and Demand management is one of them . But what is Demand management exactly?
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains how to implement Demand Management for the Consulting category.
Key Takeaway: Demand Management is a great tool to make sure you invest in the projects that best support your strategy. While launching a demand management initiative, you should consider start thinking about your make or buy strategy for the consulting category.
 

Why is Speed Essential in Taking Advantage of the Disruption?

Why is Speed Essential in Taking Advantage of the Disruption?

Did you know that a customer downloads an app at the App store every millisecond? And that Apple sells 1,000 iPhones, iPads, or Macs every few minutes? And launches a new product every 4 weeks? The world of business moves at an impressive speed! We, as consumers, also love instant gratification and faster services in all kinds of categories.

Why is Speed Essential in Taking Advantage of the Disruption ?
It’s hard not to acknowledge the importance of speed in business today. And that naturally applies to Consulting as well.

“Visionary people face the same problems everyone else faces; but rather than get paralyzed by their problems, visionaries immediately commit themselves to finding a solution.” – Bill Hybels

How and Why Speed in Adapting to Disruption Applies to Consulting?
1- Customer Bargaining Power
Is as high as it has ever been, but the secret is well kept. The customer landscape is heterogeneous, and the companies that have structured their consulting procurement are quite rare. Even though the market is scattered and the concentration index of the customers ridiculously low, the share of wallet one buyer can represent for a given company can be significant. Do you know what your weight is in the business of the boutique consulting firms you use? The consulting industry is a fast-growing industry where, for the time being, the supply still outpaces the demand. Through clever competitions, by asking for rebates on volumes, or by leveraging the seasonality of the business to obtain discounts, there are multiple ways to exercise a strong bargaining power for a client. However, companies are not leveraging this situation to their advantage. For how long?

READ ALSO
There are, unfortunately, no guarantees in life, so your best bet is to have a solid agreement and prepare yourself and your organization to deal with any unexpected problems that might arise.

2- Suppliers Bargaining Power
depends on what we consider as suppliers. If we refer to talent acquisitions and talent costs, there are some challenges. If we refer to the bargaining power of suppliers providing services to consultants, this remains limited. It would be highly unlikely to see companies providing knowledge, slides design, or data crunching, capturing a significant share of the value.
3- Competitive Rivalry
is fierce in the consulting industry. Companies of all sizes and focus compete in the market. The concentration is rather low, with an Herthfindal index lower than 1000 (top 5 being each around 10%). Surprisingly, as only a limited number of consultancies have, indeed, a marketing function, they rarely analyze their market in depth.
As traditional players enjoy comfortable margins, you can see the emergence of low-cost consultancies like Greenwich in telco consulting, recently acquired by Deloitte.
4- Threat of Substitution is there
There is a clear and present danger but with a limited impact so far. The exponential growth of consulting marketplaces focused on talent will sooner or later take share from larger consultancies for spot projects. To date, as the industry is growing at 7% worldwide and has platforms barely representing 1% of market share, the impact is not perceivable. Another kind of substitution stems from the start-up world. The time where consultants were developing ad-hoc solutions in excel or MS access with some Visual Basic layer is behind us. Today they compete with start-ups focused on one particular problem and offering on-the-shelf solutions that can be customized for a fee
5- Threat of New Entrants
is a permanent issue that consultants have learned to leave with. Switching costs are relatively low, Capital Requirements Limited, and barriers to entry are almost nonexistent. With the changes happening in the industry, it becomes much easier to access all the services (knowledge, slides, …). All of these evolutions contribute to lower even further the barriers to entry.
Indeed, as surprising as it may sound, except in specific countries, anyone can set-up a shop and declare himself a consultant. The most frequent situation being the spin-off from existing consultancies when Partners decide to take control of their destiny and establish their own business. Businesses that they end-up frequently selling with significant upside to larger consultancies.
Companies slowly realize that they need to take the lead in changing the relationship with consultants. At the end of the day, they hold the keys, and most of the cards to change the status quo. Will most companies move to smarter consulting sourcing and at what pace? If you are buying consulting regularly, look no further: the answers lie with you.
6- How is all this benefitting to the Client?
For sure, clients have more choices than ever, and they can probably spend less while creating more value. Are they actually taking advantage of the situation?
We all know that entrepreneurs and business owners have to think fast to survive. It’s in their blood; moving quickly is a natural instinct to them. Still, it’s difficult to overstate the importance of speed in business. With the pace at which society progresses, companies have to do whatever it takes to stay relevant. Here are four reasons why speed is everything in business.
Let’s look at the speed of adoption and reaction to change.
Why is Speed Important? 
1- Be Faster Than Your Competitors
With the speed at which business moves, keeping up is a constant task that never gets any easier. Everyone out there is pushing harder than ever to quickly take the next step, which leaves you with little time to prove yourself. If you can’t keep up and move quickly, your competitors will. They won’t hesitate to leave you in the dust if you can’t think on your feet.
2- Your Clients Expect It
We live in an age of near-instant gratification, where consumers are not-so-patiently awaiting the next big thing. Take phone releases, for example – every year, like clockwork, we see a new iPhone, a new Galaxy, a new everything. People simply aren’t satisfied with the status quo; they want something more, and they want it now. Companies must work quickly to satiate their appetites because audiences will have no qualms about moving to another product or service. As companies continue to meet these expectations too, overall standards rise, making speed all the more necessary. It’s a simple choice, either you’re going to or your competitors will, and they’ll crush you in the market.
3- Create a Culture of Speed
Once you learn to move quickly and maintain speed, a culture of speed naturally forms, where standards for speed are just as high – if not higher – than those of consumers. The benefits are obvious, but they can’t be overstated. With everyone and everything moving faster, innovation and efficiency go through the roof, blowing back your competition and blowing away your customers. No company in any industry can expect to get ahead with a slow culture; by design, entrepreneurship is all about moving forward and pushing innovation forward.
So why should we be concerned?
While many consultants and consulting firms have established practices advising clients on strategies to leverage disruptive trends and technologies, few apply this to themselves.
Investing in the technological innovations and next-generation business models is a fundamentally paradoxical concept in an industry driven by billable hours, billable days, and closely held best practices in the form of “knowledge capital”.
Many clients hire consultants to tap into strategic thinking –  seeing the big picture, identifying scenarios, choosing options, and creating game plans. Yet, a conspicuous void exists when it comes to addressing strategic questions by and for the industry itself.
Repeatable processes, models, and tools are indeed important for efficiency, scalability, and profitability. Yet the physical delivery of these staples of the trade remains chained to an entrenched business model.

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.

Join our newsletter

  Thank you for Signing Up

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Consulting sourcing tips

Podcast | What’s the right time to work with consultants

What’s the right time to work with consultants

How to organize to better manage your Consulting Spend

Leveraging Consulting can create massive value for your organisation but it requires for the Organization to be mature in its utilization and procurement of Consulting Services.

Podcast | How the consulting industry is evolving?

How to implement Demand Management ?

Your browser does not support the video tag.

Previous Weeks’ issues

This Week In Consulting: What is digital distruption for Corporate Finance?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week,October 21th ,2020, All you need to know about Digital Disruption in Corporate Finance.
read more

This Week In Consulting: Challenges and opportunities in High Tech

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week,September 23rd ,2020, All you need to know on what does the future hold for Strategic Communications.
read more

This Week In Consulting: What are the opportunities for Supply Chain during and after the pandemic crisis?

This Week in Consulting – Curated News on the Consulting Industry published every Wednesday brought to you by Consulting Quest. This week,September 23rd ,2020, All you need to know on what does the future hold for Strategic Communications.
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

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Consulting Playbook: Hospitality Leader Successfully Splits into Two Separate Organizations

Consulting Playbook: Hospitality Leader Successfully Splits into Two Separate Organizations

The Consulting Playbook, Edition #8
The Travel and Hospitality Industry have gone through exciting changes that have transformed the entire traveler’s experience not just the industry itself. For hotels, hospitality services, and travel agents to stay in touch with evolving consumer trends, new and effective strategies need to be designed and implemented to secure revenues. Operations, services, customer relationship and marketing plans should align with the latest dynamics shaping up the industry.
Let’s have a look at a particular situation – A Worldwide Leader Hotel Group had to be divided into two separate companies both listed on the stock exchange. Creation of the new hospitality company posed the need to launch a large scale transition program involving dozens of countries in support of new standalone strategy.
The Executive Committee decided to hire a consultant to support and help accelerate the transformation process.
The Approach the Consultant took consisted of the following steps:

In-depth diagnostic of the management and culture, governance, and strategic landscape analysis were successfully completed.
Assistance to the Executive Committee in the design of strategic direction and transition program. Including actions to engage key stakeholders:

Brainstorming and Strategy Sessions organized with the CEO, the Executive Committee and a number of employees to define the strategic direction and the structure of the company wide program (level of ambition, growth levers, and transition programs)
Get the top managers from all countries involved in the implementation of the program

Engage the Board in the strategy and planning process tools and methods designed to support the launch of the strategic framework in all 40 countries (pilot case + specific support to large countries) Design and implementation of new governance and organization’s values and principles.
Strengthening the cooperation of the executive team to create an effective working environment. The overall corporate governance was reviewed and corporate functions reinstalled in a value adding role, with clear and shared priorities identified
Definition and support of four large scale transversal change programs on Innovation, Product Development, Technology and Talent
Roadshow event organized for all the 10,000 employees of the group to celebrate the launch of the new company and share the direction

The Impact on the Organizations achieved the following:

Successful onboarding of the new CEO and executive teams, helping them achieve a year’s progress in about three months
Four large transversal change programs defined and implemented
Successful completion marked by 20% EBIT rise and stock price hike by 40% – just one year after the 1st listing on Paris Stock Exchange.

Additional Information

Mobile and Technology Trends Affecting the Industry
Below we have outlined 3 new and notable marketing trends that every hotel and hospitality industry management needs to pay attention to:
1. Personalized Marketing Approach with a Guest Mailing List
With the growing share of online traveling and booking services and the leading providers such as Expedia, Booking, etc.; there is an underlying discrepancy with hotel chains and their access to guest’s personal contact information. If the booking agent desires to not share the guest’s email address, the hotel is at a disadvantage. Data is as important to hotels, as it is to all other businesses, when it comes to planning future marketing activities. Guest’s contact information is an essential and valuable piece in that puzzle. In creating that precious mailing list with previous guests, often the best option hotels are left with is their front desk staff being able to capture this information.
2. Mobile Marketing Impacting the Hospitality Services
Did you know that 52% of travelers who book trips online in 2016, are doing so using a mobile device? The mobile enabled technology and new consumer trends require a comprehensive mobile marketing strategy, and to become an integrated part of the overall marketing plans of every hotel and hotel management organization. This means that focus on responsive design, one-click booking, and location technology are very necessary points. Guests often use a cross-platform approach, so hotels need offer a seamless multiplatform experience before, during and after their stay.
With the growing competition from private accommodations, vacation rentals and alternative accommodations, the need for personalized guest offers and experience is even more pressing now, as hotels and hotels chains need to work harder to capture and retain market share. Creating last-minute mobile promotions with attractive bonuses can appeal to local residents as well, and younger guests who travel more spontaneously.
3. Increasing Revenues with the Help of New Data Trends
A few new trends in traveling and vacationing are rich in opportunity to be explored. They include last-minute trips which are growing steadily, the short local getaway and mini-vacations adding to that, and business trips combined with fun and pleasure, or Bleisure, as they are referred to. We will also see more multi-generational and multi-family travelling. But the best part is that, most of the new data on traveling is well captured via CRM that integrates data from both online and offline sources. This data, used properly, can empower an organization into planning and delivering the best experience and the most value, revenue and profits.
For Further Reading:
– Hospitality Industry Trends to Watch in 2016
– Predicting the Rise of the Smart Hotel in 2016
– What Do Millennials Want? Hotels Have Some Ideas
– The Best Travel Apps For 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.

6 Reasons Why Analyzing Your Consulting Spend Will Make You a Pro at Buying Consulting

6 Reasons Why Analyzing Your Consulting Spend Will Make You a Pro at Buying Consulting

You have decided to grow your Consulting Procurement Capability, the first thing you need to look at is analyzing your Consulting Spend that will allow you to establish your baseline.
Working with consultants can bring in tremendous benefits, but if you don’t know how to manage the procurement process, the results might be far from satisfactory.
 “Consultants have credibility because they are not dumb enough to work at your company.” – Scott Adams.
Sounds amusing, right? But all jokes aside, the task here is to show you how to design and apply an effective framework that screens your Consulting Spend based on three dimensions:

How much you are spending, on what and who is spending
How decisions about Consulting are made from inception to selection of a provider
What benefits you are getting from your projects and providers

Know the Consulting Category

The diversity of the Consulting providers in terms of size, and offerings is quite complex, and this makes buying Consulting services so tricky.
Read More

A first scan of your expenses, where the observation period will be the previous fiscal year, will give you a good basis for slicing and dicing the information. Having this structured data will allow you to understand the patterns of your Consulting Spend. You can capture quick gains, get the buy-in of your employees and embark on a self-funded journey.
6 Reasons why analyzing your Consulting Spend will help you buy better:

What is at stake –

Many Companies don’t have the overview of their consulting spend, and thus don’t see the interest of managing their Consulting Spend. Mapping all the expenses in Consulting will help you understand who is spending and how much. That will give a sense of the size of the prize, should you decide to change the way you manage the consulting category.

Why projects are launched –

Knowing who is buying the projects, and why did they buy it, will provide insights on the behaviors of your internal clients. How do they use Consulting? On what type of projects? What benefits were they expecting from working with external consultants?

Who are the internal stakeholders –

It’s essential to know who was involved, what department? Who was the point of contact? At what point in the process were they involved? Were there other stakeholders involved? They are your internal clients. The ones you will need to get on board when you start transforming your consulting procurement capability.

What is the Decision-making process –

Who is deciding? Who is paying? What were the validations required? Is there a different decision-making process based on the type of projects? What size? And who was the Project Sponsor? Allocating your resources on the right projects is key to leverage consulting to accelerate your transformation.

Is there a specific buying process?

Organizing a competition between providers is the best way to find the right consultancy. Was the competition relevant? Is there a threshold under which there is no competition? Or a Unit that never organizes competition?

Who are your providers and how do they perform?

Knowing on whom you spend your money and how satisfactory was the work delivered, can get you closer to decide if this was a good investment. There are usually a few dimensions you want to evaluate your Consulting Providers on. Was the firm qualified to do the job? Have they understood the problem you were trying to solve? Have they worked well with your teams? And what was the impact, and the return on investment?
Use normalized data for a relevant analysis. And be aware that how you organize the data will have a great impact on the success of the project.
By giving you the insights based on our decades of experience, and case studies, we hope we’ve convinced you to apply efficiency and diligence in your next project, to rock Consulting buying like a pro!

Do you want to learn more on how to anlayze your Consulting Spend?
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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The Savvy Structure and Approach to the Top 3 Dimensions in Managing a Consulting Project

The Savvy Structure and Approach to the Top 3 Dimensions in Managing a Consulting Project

“A good plan can help with risk analyses, but it will never guarantee the smooth running of the project.” – Bentley and Borman

Managing a Consulting project is like being a conductor. You direct the performance of all the orchestra players into producing their best. But what does that mean, really? Let’s have a more analytical look at the various parts and the roles of each player.
The first step is always to define how you will organize to manage the project.

Staff your Consultancy

A project usually starts with defining your Project Needs. The definition of the needs also called Requirements, is the first, and one of the most valuable steps in the process of procuring goods and services.
Read More

1. Project Management Structure and Approach –
When you are ready to launch a major project internally, these are the main steps you will take.
You define the scope, appoint a project leader, secure the resources, and prepare the work plan. You also define the governance of the project, including the Steering Committee and the main milestones. In other words, you organize to do the work and to steer the project.

Consulting services are intangible – It’s important to keep that in mind, and managing a project is a crucial part of the process to obtain the results you expect. The intangibility of the service coupled with the volatility of the business environment, makes it highly improbable that a project will unfold just as expected. Plus, the longer it is, the more likely it is to change.
The importance of governance – The governance defined for the project should be part of the proposal and the contract signed by the winning consultant. Outsourcing a significant share of the work to external resources doesn’t change the fact the project is important if you decided to allocate funds to it.

Most Consulting projects consist of 3 main dimensions that must be well managed to secure its success:

Managing Stakeholders
Managing the Project
Managing Change

 

2. Managing Key Players & Effective Communication –
Once you project governance is organized, your next move is to make sure that you align the Key Stakeholders. You need to get the key players on board with the project. This initiative can take various forms. However, it always starts with why you launched the project and what benefits you expect for the business. Change practitioners would refer to it as the rationale for change. As there isn’t always an imminent change associated with a consulting project, we could refer to it as a rationale for the project.
Have they understood what you are trying to accomplish, and do they agree on the principles? Even if they may have doubts, are you sure that they will support the approach and provide what is needed from them? It may sound obvious, but a lot of projects are failing at this stage. A new executive decides to launch a project but does not embark the other members of the management team and ends up quite alone when execution time comes.
Communication with the Key players is quite important throughout the project.
Whether they are senior executives that should be aware and supportive of the approach or contributors that will have a role to play in the course of the project, this communication needs to articulate why the project is launched, what are the objectives and what is expected from the various stakeholders.
Your communication has to be aspirational and motivate people to act and contribute.
3. Project Management – Aim for the Best Practices –
Once the stakeholders are aligned and supportive, you need to put in place classic project management best practices, and address at least the work to be done, the role of the project members, and the governance for the project.
A work plan is usually a good place to start.
The foundation for any good project management is to break down the work to be able to deliver what the project is supposed to. The work plan also provides a backbone for structuring the activities and monitoring if everything is unfolding according to plan. Complex projects can require detailed project planning and interdependency management. For most projects a critical path analysis showing the various workstreams and associated milestones should suffice.
4. Planning the Different Phases –
You will very often start with a phase of information gathering, then phase of analysis, a series of meetings with the client, and the development of the report to be presented in the Steering Committee. When working on a consulting project, ask to review the detailed work plan in the early stages of the project and come back to it regularly.
The work plan should be associated with a breakdown of the resources required during each phase to complete the work successfully.
5. Roles and Responsibilities within the Teams –
Let’s see who is supposed to do what. You can usually identify two teams within the project. The client’s team and the consultant’s. Even though both teams have to work together efficiently, the roles of the various team members can differ significantly.

Roles within the consulting team –

Within a consulting team, you usually have a pyramidal set-up. At the top you will find the relationship partner. Then you will find a production partner, a project manager, and junior consultants. Depending on the size of the project the activities can be combined through fewer individuals, but the roles remain.
For small projects, this role and the principal’s role are often merged. Consultants are handling the heavy lifting during a consulting project. Performing interviews, handling quantitative analysis, formalizing the deliverables, etc.
Teams can be made of consultants or analysts, depending on the firm’s set-up. Experts are brought into projects to provide specific expertise on a given topic. They are usually spotted resources on the project and intervene only during interviews and workshops.
Note that Experts often serve as differentiators during the proposal stage and do not necessarily contribute afterward.
Now let’s make sure that your set-up as a client enables efficient management of the project.

Roles within the client team –

In the client’s team, you often have a budget owner that funds the project and a sponsor, a senior Executive that endorses the work. These two roles can be merged, especially on small or scope-limited projects.
The daily team is made of a project manager, responsible for the daily progress of the project in close connection with the consulting team and Project Stakeholders, individuals interested directly or indirectly in the results of the project. They can be contributors or those that just need to be informed.
6. The Effective Governance Model –
Most consulting projects have two governance bodies: one to drive the day-to-day activities of the project and one to steer the project and make major decisions.
The Steering Committee is the project’s ultimate decision-making body. It provides direction, support, and oversight as the project progresses. You should gather those main stakeholders that are real decision-makers. Don’t include too many people. It might be tempting to involve all the people impacted by the project to keep them informed, but the project would quickly become ungovernable.
The president of the Steering Committee is, most of the time the sponsor of the project, and the organizer is the internal project manager. In other words, don’t let the Consultants manage the Steering Committee. They have to support the internal project manager, not the other way around.
Five members for your average project seem to be reasonable. But the optimal number will depend on the size and the nature of the project.
Indeed the same applies to Steering Committees! They work better when there is a more cohesive environment.
The Project Management Committee is usually a recurring meeting between the client team and the consulting team. Frequency is often weekly but can vary depending on the nature of the projects.
7. Successful Change Management –
The third important dimension for effective project management is change management. This dimension is often overlooked or underestimated. Even today, a lot of people tend to believe that effective communication will do the trick. If we develop it, they will use it. If we teach them, they will buy-in. Well, things are a little more complicated.
The first step when looking at change management is to anticipate why change can be difficult. Depending on your project, people can refuse to accept the conclusion or passively resist the implementation of the new Customer Relationship Management system.
So place yourself in the shoes of the impacted stakeholders and try to anticipate why they would be resisting. They might be anxious about the security of their job, could have a feeling that their power within the organization will reduce or that the project will challenge their legacy.
For long projects with a significant change dimension, include change reinforcing elements in your communication. For instance, you can communicate on early successes and progress. It will help to keep the momentum.
Most consulting projects are going beyond pure transactional activities and will include a human dimension. Even though you want to keep your distance with your providers, you also need to maintain a close collaboration with the consulting team, to be able to discuss any topics and issues and take prompt action.

Ready to get started on your next project?
Need a fresh point of view? We will be happy to help.
Please give us a call today at no obligation. Let’s get the conversation started
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Let’s talk about the future of Consulting now

Let’s talk about the future of Consulting now

The future of consulting seems full of new and exciting changes. Disruption is the term that describes most of them. Let’s have a closer look at what these changes are exactly.
When most people think of the consulting industry, the first thing that comes to mind is giant firms that occupy the top floors of skyscrapers. However, in recent years the consulting industry (and many others) has seen a switch from firms and dedicated teams of people to freelance workers and virtual teams.
Freelance workers become a big part of it, not corporate-
One study estimates that by 2020, 40% of the American workforce (or 60 million people) will be freelance or contract workers. And that means some big changes in what companies will be looking for in their consultants.
Results and Metrics –
Results will matter more because digital channels are so easy to measure. No more creative campaigns designed to increase your hourly project billing and media buying commissions.

Read also...
The most simple and significant reason for every Consulting project is improvement. Whether you try to achieve growth or change, Consultants bring in expertise, fresh perspective, and new ideas.

Learn more

Cut straight to the problem and provide Fast solutions –
Also gone will be complex structural planning internal documents without action plans. Future consultants will need to cut right the problem, offering the best solution to fix it with only the client’s success in mind. Move fast, know what you’re talking about and be willing to eliminate the need for a consultant at all.”
Freedom of information and democratization of it –
Another major change that’s impacting the consulting industry is the ease in which people can find valuable information on virtually any subject. Communities have sprung up on the internet that tailor to professional development in every field. Much of the insight that would have been provided by consultants in the past can now be accessed on your phone or computer with just a few button presses – and most importantly, at no cost.

Consulting will become more tech-driven –
In 10 to 15 years, the consulting industry will be thriving even more than today. As technology continues to improve, specific expertise will be not only be required but worth more. Newer generations aren’t getting STEM educations as commonly as the older generations at a time where technology continues to increase.
Flexibility for Clients when hiring –
The great consultant will be able to articulate the value and quick ROI of their services and keep busy helping propel companies along the way in keeping competitive and growing in what will be marketplaces that will continue to become more technology narrowly defined requiring more specific talent, knowledge, and the ability to please customers with high expectations.
This opens the door to those with specialized knowledge that companies can’t afford to employ on a full-time basis. The future is bright for consultants with strong specialized knowledge.
AI Augmented Services –
Consultants will use Artificial Intelligence to enhance service offerings, creating proprietary algorithms that extend their capabilities or validate their recommendations with tests/data.
Cultural Catalysts –
No longer will consultants be creating their deliverables in a black box or behind a boardroom door. Instead, consultants will be expected to lend their expertise by embedding themselves in an organization and supporting capability growth throughout their engagement. We have seen the start of this expectation in the tech world with an increasing demand for Agile Coaches and other culturally catalyzing consultants.
Integration with Clients –
Consultants will increasingly be expected to integrate themselves with client teams to augment an organizations’ capabilities. These consultants will function as an out-sourced but on-site partner that can round out gaps within an organization. For example, a consultant may act as the research capability for an organization. However, due to the increase in agile working environments, it will be increasingly important for consultants to be on-site and integrate with client teams to move at the appropriate pace.
Consultant’s Presentation –
A consultant has to understand how to integrate their service offerings in their messaging and their design. If you are able to communicate your brand story in a creative way that shows you those investing in their business, you’ll have a long career in this industry.
A deeper relationship with Clients – not just hours billed –
The future of consulting is the end of billable hours, project fees, and commissions. Successful consultants over the next 10-15 years will need to forge a deeper relationship with clients in order to solve problems, not just create work for themselves.
The consulting industry will continue to grow, specifically within tech, due to the continuous development of new software, tools, and applications to accomplish strategic goals. The adoption of the new applications and tools will lead to further specialization by consulting firms or independent consultants who will offer their services focused on these tools. The integration of systems and tools in line with business processes will help the consulting industry grow, expand, and develop.
More personalization –
The consulting industry will become more personalized during the next 10 years, and the scope will be extended into new areas such as typical HR-responsibilities or procurement. This is needed for the consultant to provide an end-to-end customized solution – for example. Those will provide not only the organizational structure but also will be in charge of filling in the contributors, employees, subcontractors and freelancers, part-timers, etc.
Team Clusters of Consultants –
The consultant will move much more in direction interim management acting as a customer solutions provider with specific expertise. All independent consultants will become part of clusters where the latter provides networking, expert recommendations for new projects to be assigned, and platforms for knowledge sharing between consultants of the same cluster.
Growing but ripe for Disruption too –
Consulting is a growing market. According to Forrester’s Global Business Technographics Business And Technology Services Survey… However, despite strong growth, we feel consulting is ripe for disruption and see growing evidence that the consulting model will continue to morph and change dramatically over the next decade. Until now, we have been able to win new customers and grow by playing the role of trusted advisor to executive clients.
Interdependent relationship –
Clients don’t just want great advice with pretty excel spreadsheets.They don’t want to develop a dependency on consultants. They want a more interdependent ongoing relationship with consultants that understand their business drivers.
End-to-End Solutions – the new norm –
In an era of the connected consumer and integrated consumer experience, there is a pressing need for consulting agencies to provide an end-to-end solution in creating, implementing, and iterating customer-centric experiences across touchpoints.
Over the next 10-15 years, we will see the consulting agencies begin to streamline and focus on the brand experience and brand outcomes.
So what kind of disruption is really coming? –
The demand from clients today is crystal clear: they want more flexible, more expert, and less expensive consulting models with more transparency on performance and more creative consulting fees. At the same time, the ever-growing number of consultants makes the consulting market more and more complex and hazardous for the buyers. As most companies are not managing a sufficient volume of consulting assignments, they are struggling to explore the market, evaluate the performance of the providers, and be able to recommend the best vendors to their executives. Thus the easy solution and the safest bet remains to stick to the big brands … at a cost.
The ever-growing demand for industry and capability expertise, the shift of the willingness to pay for performance rather than effort, and the very high level of profitability, are creating pools of opportunities for disruptors.
New capability expertise. New direction in demand.
Disruption might come from various sources, from smaller specialized boutiques that offer consulting models close to the needs of their clients, to Medium-size companies with Thought leadership, and Large players are reinventing themselves as well. However, the most powerful disruptive force to challenge the status quo is generated by the clients, who have the willingness to grow and lead forward.
Consulting indeed shows strong calling for disruption such as an ever-growing demand for industry and capability expertise (in short supply in generalist firms), a shift of the willingness to pay for performance rather than effort, and a very high level of profitability creating pools of opportunities for disruptors. The impact of digital, in particular, data analytics and big data, are shifting demand and leveling the playing field.
Some capabilities are starting to be commoditized and industrialized imposing on traditional consulting firms to change their business models.
Are organizational models from large consultancies adapted to the pace of change requested by the market? What can be the impact of a booming population of former consultants in blue-chip companies’ pivoting needs? What about the lack of transparency in consulting performance?

The changes we outlined above will give you a clear perspective on the future of Consulting.
If you have a project you would like to discuss with us,
please get in touch, and we will be happy to help you get started
Book your call

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Learn the Secrets Behind an Sucessful Consulting Pitch

Learn the Secrets Behind an Sucessful Consulting Pitch

Your proposal is ready. Your team has researched, brainstormed, written, and designed the proposal to perfection.  And you’re pretty sure that you can do an amazing job on the project you’re writing about. Once the client has read your proposal, they’ll see that you’re the consulting team for the job.
Unfortunately, just sending a proposal doesn’t guarantee that it’ll be read. Proposals tend to be hefty things and most people have a lot to do with their time. They may not get the chance to read the whole proposal cover to cover. In fact, they may just skim through it, skip to the pricing section, or only read half of it, if other obligations arise.
In order to make sure that you get your ideas through to your audience, you can’t rely only on the written material. It’s also a good idea to make a verbal pitch. Before you make the pitch, keep these pointers in mind:

Present the members of your team to spark the interest of your client and really build your credibility.

If you’ve misunderstood the needs of your client—that’s OK. You can always re-evaluate and get back on track.

While most of us are more comfortable sending out written material than we are standing in front of an audience and presenting our ideas, having your team pitch its proposal can be incredibly effective.  Here are our top five tips to present your proposal and to impact your audience:
1. Don’t forget that it’s all about the client.
It’s tempting to devote time to talking about your background and your achievements—don’t. Take advantage of the time you have with the client to ask questions and provide further clarifications about your proposal.
If you feel that the proposal went slightly off-track, don’t be afraid to adjust and take it in a different direction. These meetings are great opportunities to co-construct with your client, according to her requirements. Take advantage of the time and to really home in on the client’s needs and create the buy-in.
2. Be mindful of the selection process.
Every company will define its own criteria to select the best consultant for its unique needs. During your proposal, you must make sure that you fulfill as many of those criteria as possible. If you do, you’ll maximize your chances of earning the project. There are several key points that almost every client will want to hear about, so make sure that you address them.

Deliverables: Be clear about what you will deliver to the client.

Impact: What will your impact be? Will your impact be made on the bottom line? On the teams?

Differentiation: What makes you the right consultant for the project?

Grow your Consultancy

The many common mistakes performed by consultants while preparing their proposals are not just inside their head. Mistakes often enter into proposals and presentations in the most awkward time and manner.

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Ask your contact or procurement beforehand if there are other important points you should address.
3. Know your proposal inside and out.  
This may seem like a given, but the better your team knows its main talking points, the more confident you’ll be when you’re actually in the pitch. Before the actual pitch, try going over all of the main points out loud, so you can find any areas that could be better clarified.
Make sure that you know your parts, and that every team member knows his parts, too. Take reassurance in the fact that this is a collaborative effort, and that your teammates wil be there to field questions with you.
The bottom line is that the better everyone knows all parts of the proposal, the more confident you’ll all feel while you’re making your presentation.
4. Tell a story.  
People are always more interested in stories than they are in facts and figures. Even if the facts and figures are impressive, a story is much more likely to grab an audience’s attention and keep it.  
Stories work because at the heart of every story is the main character. A story involves people who look, think, and act like us. We’re always curious about what other people are like and what they’re thinking and feeling. So if you can make a point with a story, your team is sure to grab the audience.  
The story can be a simple one about how you went about implementing your ideas at a company, or it can be taken from historical and news sources. In general, if you find the story interesting, your audience will, too. A pitch is your team’s chance to impress and interest the audience with a story they can relate to.
5. Remember that a picture is worth a thousand words.  
Whether you believe in this saying or not, there’s no harm in using a few pictures along with all the written words in your proposal. This is easily done nowadays with the help of programs like PowerPoint.
Choose your pictures carefully. As per this article from Sitepoint, it’s possible to put your audience to sleep with too many charts and graphs. Of course, if your chart or graph makes an important, dramatic point, such as how changes like the one you’re suggesting have greatly increased revenue for other organizations in the past, you need to show your audience this.  
Overall, the images that work the best are the ones that people can easily relate to. If you’re suggesting a human-resources overhaul, you can use a couple of images of happy, smiling employees. This might seem too simple, but people respond positively to smiling faces and images depicting health and happiness.
6. Be humorous—but cautious.
Making people laugh can also help you to pitch your proposal. Make sure that none of your jokes are made at anyone’s expense. It’s hard to stay politically correct when it comes to humor, but a verbal presentation of a proposal is no place to challenge people’s norms!  So keep your jokes as harmless as possible.  
At the same time, there’s not much point in using a joke unless it is actually funny, and maybe even a little edgy. Have your team test out the jokes with friends and colleagues before you use them in your pitch. You don’t want your audience groaning when your punch line comes around.
7. Keep it short.  
This is a good rule to follow both for pitching proposals, and for writing them. Most good writers will tell you that writing concisely is the most difficult task. Delete everything that’s not necessary. Of course, this can be hard to do, because everyone falls in love with their own writing.
Make your pitch exciting, dramatic, informative, and short.  Pour as much as you can into the time you’ve allotted yourselves. Choose the points you’re going to emphasize with care and explain them fully. If your audience wants to know more, they can always read the proposal.
Try to think about your pitch from someone else’s point of view, so that you can remove any unnecessary talking points. No one wants to listen to an hour-long monologue. In short, your pitching material is different from your detailed proposal.

Consulting Playbook: Establishing New Organization to Meet Globalization’s New Challenges

Consulting Playbook: Establishing New Organization to Meet Globalization’s New Challenges

The Consulting Playbook, Edition #20
A major Automotive company aspired to become a global organization. Their ambitious goal required several trade-offs to expand internationally. The company needed to develop a new Program function covering strategic resources allocation and building a connection with all the other existing functions such as product development, engineering, manufacturing, purchasing and marketing/sales. Besides, a new organization had to be set up with business units – zones in the international markets. This was a drastic change for the company and they decided to get some external support.
The Consultant’s Approach Centered on Facilitation
A team of three main Executives developed the business principles of the new organization, progressively building the new organizational structure, operating model and appointing the new management.
The set-up of the newly defined program function was quite challenging as former program entity was mostly in charge of synchronizing milestones without clear levers. The new scheme, inspired from the aerospace industry was giving the accountability to the programs on product plan, development budgets, resources allocation, major trade-off decisions and off-course planning. Resources were distributed across programs and functions depending on their level of dedication to the programs.
The creation of the regional business units in charge of marketing, sales and services in their region was also a massive shift considering that all those activities were previously organized by function. The newly created structures would have P&L accountability for their region but also the necessary levers to deliver. The overall consistency on the brand, policies and practices would be ensured through the implementation of small but powerful corporate functions. Regions would express regional customization needs to the programs to make sure products would answer the regional specificities.
The consultant  facilitated the migration of budgets, headcounts, transfer of accountabilities with a specific focus on the continuation of major projects.
At the project’s completion, few major achievements were made:

The launch and start of the new organization was successfully completed.
Cost reduction (opex and capex) of 15% realized, by improving allocation of strategic resources carefully managing tradeoffs but also streamlining the organizational structure
Acceleration in development of customized regional products that addressed local markets needs

Additional Information

4 Major Trends in the Automotive Industry That Will Impact the Future
Despite that the Automotive Industry has enjoyed a solid rise in demand, there are few potential risks that can hinder the growth, and will have a cooling effect.
Among these risks factors are slowing global economy, fluctuations in interest rates, and changes in future demand.
Exciting new technologies are impacting the Automotive industry today, from electric cars, to self-driving vehicles, and a multiple mobile apps changing how drivers and passengers interact. But beside the exciting things, some serious concerns have emerged too.

Production

After the recession and the subsequent growth in demand, manufacturers have expanded facilities to cope with higher demand, they invested in new facilities and ramped up production capacity. But all this can become problematic when the demand starts declining. And scheduling issues might become a serious problem for suppliers who are doing their best to optimize work schedules, delivery, and use flexible sourcing options, and selection of manufactures.

Consumer Demand Trends

Right now, older baby boomers represent the biggest segment of car sales, and this pattern likely won’t change. Millennials on the other hand, are less interested in car ownership and prefer other transportation options. The popular ride-sharing apps are changing consumers’ behavior. Auto suppliers are starting to worry how they are going to grow sales when the demand starts declining soon.

Global Expansion

Approximately a third of North American automotive parts are manufactured in Mexico, and many US suppliers have facilities there or a planning to establish ones. However with the new administration in Washington commencing early next year, we can’t be sure about  the future developments at the present moment.

Workforce Shortage

With the creation of many new jobs, and the ever-increasing sophistication in machinery, suppliers face difficulty in staffing. There is simply not enough skilled labor in the industry. Attracting and retaining skilled labor means offering enough incentive, effective salary and benefits packages to secure workforce commitment. Many manufacturers are also working on training and internship programs, in partnership with colleges, to facilitate new talent education and career choices.
For Further Reading –

THE TRANSFORMATION OF THE AUTOMOBILE 2016
2016 Auto Industry Trends
Eight disruptive trends shaping the auto industry of 2030
KPMG’s Global Automotive Executive Survey 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.

Understanding consulting fees to make smarter decisions

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?

Read More

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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This Week in Consulting: Tech sector interrupted: trends and challenges in 2020

This Week in Consulting

Wednesday, February 26th 2020

Tech sector interrupted: trends and challenges in 2020

THIS WEEK’S MUST READ
“Earlier this month, major tech companies announced they would temporarily shut down all corporate offices, manufacturing factories, and retail stores across China. These companies include Apple, Samsung, Microsoft, Tesla, and Google. (Google has also closed offices in nearby Hong Kong and Taiwan.) Most of the closures were expected to last until Sunday, February 9th, though some companies did not specify when exactly the offices would reopen​​”
Office, store and factory closures, companies restricting non-essential employee travel… The technology sector is hit hard by coronavirus
This Week’s Must Read  is an insight piece from The Verge where the author explores how the coronavirus has already affected the tech industry.
Read on to Find out More: “All the ways China’s coronavirus outbreak is affecting tech“ | Natt Garun, The Verge.

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THIS WEEK’S VIDEO:

Technology is advancing faster than ever, and it’s not slowing down. This decade was the era of smartphones, streaming, and the internet of things​​.

THOUGHT LEADERSHIP

2020 technology industry outlook: “While familiar themes such as cloud computing (including everything-as-a-service, or XaaS) and artificial intelligence (AI) will once again dominate technology headlines, 2020 could be a breakout year for “edge computing.” According to Paul Sallomi, global technology, media, and telecommunications industry leader and US global technology sector leader, the time is right for companies to seriously consider exploring the advantages—including reduced latency and lower bandwidth costs—of processing data locally, at the edge of their networks.” In this Interview, Paul Sallomi shares his perspectives to accelerate growth in technology. | Paul Sallomi, Deloitte
Indian tech industry facing biggest-ever HR challenge, needs to recruit, skill 2 mn professionals: Report: “The increasing competition has not left organisations with much of an alternative. They have to either embrace the challenge or perish, according to the report titled ‘AI & Future Of Work: Redefining Future Of Enterprise.’ Employability with technology continues to be a problem despite India having a large number of higher academic institutions.” Here the author highlights the problems faced by India in terms of employment in the technology sector. | The Economic Times
How Blockchain Tech Is Solving Problems In The Supply Chain Sector: “Information is often siloed, hard to access, inconsistently formatted or difficult to analyze. Thinking about driving change in an industry like this could be overwhelming, but the silver lining is that even the most basic applications of blockchain technology could significantly increase productivity and profitability.” How do companies realize the untapped potential of the supply chain, an industry faced with massive amounts of data and enormous complexity? | Richard Ma, Quantstamp for Forbes
Powering Growth with Digital Innovation: “While most industries attempt to survive the vortex of digital transformation, high tech companies occupy the eye of that vortex, albeit with varying providence. On one hand, platform companies are fueling digital transformation with rapid growth in AI-powered automation. On the other hand, semiconductor and component makers are raking in big bucks thanks to the explosion of connected devices—both consumer and industrial.” This report spotlights what distinguishes “high-tech champions” companies in a world of increasingly complex supply chains. | Dave Sovie, Aidan Quilligan, Raghav Narsalay and Aarohi Sen, Accenture.

TRENDS
On the same theme,here is a selection of conferences that you might find useful
 
MRE 2020: The event will be a showcase for ground-breaking new materials and their manufacturing process.
 
ISS Europe: Semiconductors are at the center of the innovative solutions required to develop the Digital Economy and provide a secure and sustainable Digital Future.

CONSULTING INDUSTRY NEWS

How PwC’s Face Recognition App Drives Engagement for The Mob Museum: “In partnership with PwC’s connected solutions’ arm, the Mob Museum announced an engaging new mobile app that provides a virtual guide to the museum for visitors in Jan. 2020. With the help of facial recognition technology, the app compares a visitor’s facial features to a database of more than 800 images across notable personalities and identifies the visitor’s closest ‘Doppelgangster’.” | Neha Pradhan, Ziff Davis B2B
Youtility Closes £4.5m in Funding: “Launched in November 2018 by Will Kostoris and Charlie Quigley, Youtility is an open-banking enabled home finance tech platform which allows banks to connect their customers with personalised home services contracts best suited to their needs, offering customers enhanced control over their core financial outgoings.” | FINSMES
Dell Technologies and Orange Deliver the Power of 5G: “The two companies recently completed live field trials of Dell’s first 5G-ready Latitude notebook announced at CES earlier this year, making it the first PC to successfully pass the Orange 5G testing. These first field trials, conducted on the Orange 5G network in Paris, demonstrate the promise of 5G with sustained download speeds over 900 megabits per second on an enterprise-grade mobile compute platform – surpassing 4G speeds that typically are under 60 megabits per second.” |PRNewswire
Organisations struggle with bridging data strategy to execution: “As firms continue to chase the potential of data to improve their sales and operational efficiency, the same old problems are preventing them from realising the true value of their data-sets. According to a new study, questions of governance, ownership and skilling the workforce are still hamstringing companies’ efforts to wield data effectively.” | Consultancy.uk

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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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