7 Ways to Make Sure you Spend your Money on the right Consulting Projects.

In today’s business environment, we put a lot of emphasis on the strategy, forgetting that the most successful strategy is the one that will be well executed.

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.” Sun Tzu

I believe consulting, leveraged properly, is a formidable lever for companies to step up their game, accelerate transformations, and implement effective new strategies. But how can companies efficiently take advantage of consulting to advance their agenda?

1- Manage Your Consulting Spend

When top executives understand the benefits of working with Consultants, the next most important step is to align strategic Consulting spend with the Company’s goals and strategy. This approach is the best way to guarantee you are getting the most value.

2- Centralize Your Consulting Budget

Consulting for better or worse is usually taken into account in your budgeting. As a consequence, the department that used consulting one year continues to budget for it while the department next door should get some help but does not get anything. Centralizing your consulting budget is a good practice to ensure balanced allocations of resources year after year.

3- Prioritize Your Projects

All projects are not created equal and do not bring in equal value. Also, the timeframe and synchronization of projects must be carefully reviewed by the management team and executed accordingly.

4- Have a Well-defined Decision-making Process

The decision-making process is an essential part of success in creating value through Consulting. You want to spend your money when it makes more sense to you. Your process has to deliver the right value, with as little hassle as possible. The trick is to fine-tune the decision-making process in regards to strategic value and the cost of the projects. That means, for example, finding the right threshold under which the projects go through a simplified and faster process (fewer stakeholders, lower validation, little or no mandatory competition)

5- Improve Your Sourcing Process

Your sourcing process for Consulting has to be aligned with your sourcing practices. Keep in mind the specificities of the Consulting category, where close collaboration between procurement and the business lines is crucial. Adapt the decision thresholds to balance the number of projects (and the amount of work), so the different entities procuring Consulting (local procurement, global procurement, business lines…) can manage their workload efficiently while keeping the spend under control.

6- Manage Your Consulting Projects

You probably have a project management process defined internally. With projects outsourced to external consultants, you are in a specific situation where you will have two project managers, one internal and one external. You need to define governance, KPIs, build a schedule, and do regular reviews. You can also ask the Consulting team to propose a governance model. And in such a case, you will have both, a project leader and a project sponsor. It might be a good idea to separate the governance bodies for execution and steering.

7- Measure the Performance

Measuring the performance of your consulting providers is essential to manage the quality of your Consulting panel. You have to put in place a system that is simple, easy-to-use, systematic and ideally, linked to your vendor management system. Share the results with the different stakeholders to get them committed to the system and leverage the findings to define improvement plans and manage supplier relationships.

The key to optimizing your consulting spend and developing a highly-effective consulting strategy lies with navigating the demanding business landscape today, avoiding underutilizing or overutilizing consulting, using the improper compensation models, or working with the wrong consultants on the wrong projects. But with a congruent and well-defined consulting strategy, you can successfully accelerate the execution of your business strategy and unleash substantial value.

Article published on Medium