Analyzing proposals to select the right provider is a key step in the procurement process. What is the secret sauce to identifying winner proposals?
Why Focus on the Roles Within Your Team Can Ensure the Project’s Success?
“No matter what accomplishments you make, somebody helped you.” – Althea Gibson
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. However, the procurement requirements for goods are mainly focused on the specifications of the products. For Consulting, the background of the company, the context of the project, the scope, and the deliverables are equally important.
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ompanies that have implemented a Category Management System were able to make breakthrough savings (10-30%) …
1. Defining the Project Needs –
The whole point is to make sure the consultants have all the elements to submit a relevant proposal. Writing well-defined requirements is the cornerstone of a successful consulting project.
Unfortunately, too many companies are leaving the definition of the work in the hands of their consultants. If you have troubles sleeping, will you go directly to the store to shop for a new bed? Of course not. You would end up with the largest bed in the store with all the gadgets, but your sleeping problem might still be there, unresolved. You need first to review all the other options.
It’s somehow the same when you start defining your needs with a consultant. They will tend to paint your problem with their capabilities and experiences or to make it fit the resources they have available.
2. Clearly identify your problem –
Working internally to define your problem, and identify what could be the best option is key to invite the right consultants to the discussion. It doesn’t mean that your requirements are final. You are just optimizing the chances that the project you are launching will fix the issues you are facing.
When procuring Consulting Services, the requirements are always dependent on the internal and external context of the company. Besides, the definition of what you expect and why is a key success factor for the project. It is always a good idea to formalize your requirements into an RFP, even though you don’t necessarily want or need to organize a tender.
3. Delegating the roles within the team –
Even before you start brainstorming ideas, and envision your ideal outcome, you need to make sure that the right people are in the room. And to build the right team.
Depending on the magnitude of the project, you can adapt the size of your team to it. However, here are a few roles that need to be included:
Number 1 – The Project Sponsor
The Project Sponsor is the person (often a manager or an executive) that will be accountable for the project. S/he will make sure that the project delivers the expected outcomes, and will champion the project to “sell” it within the project team and the organization. S/He will also be the chair of the Steering Committee.
The Project Sponsor has the right authority and decision-making power to lead the project effectively. S/he is also directly impacted by the project outcomes.
Usually, the project sponsor owns the budget. However, in some companies, consulting budgets are centralized under the CEO, Finance, or Strategy. In this case, you might want to invite the budget owner to the party as well
Number 2 – The Project Manager
The Project Manager is the person that has the daily accountability of the project. S/he will guide the consultants and make sure they work under the right conditions with the teams and deliver the expected results in time.
S/he is very often part of the Project Sponsor Team and is impacted directly by the project
Number 3 – The Procurement Leader
Unless you are working on a very small project and you have already a list of potential provides handy, you want to have someone from Procurement in the room. Sourcing the right candidates can take some time, and it is sometimes useful to start early in the process.
Besides, procurement managers are experts in defining needs and preparing bids, while it is rarely the case for the rest of the organization. They can facilitate your work and guide you through the process.
Many companies, however, don’t have the critical mass to have someone dedicated to consulting procurement. In that case, you can include in your team the person in charge of indirect procurement or the Head of Purchasing.
Number 4 – The Main Stakeholders
We mentioned that the project sponsor and the project manager are often part of the same team. However, their department might not be the only one impacted by the project. Ask yourself if you should expect a strong impact on or a profound change in interfaces with another part of the organization. If that’s the case, it can be a good idea to involve them at the requirements stage.
If your project is very large, like a Company-wide Transformation project, you might also want to involve Finance and Strategy, to make sure that it is aligned with the overall strategy.
When you have the right team at work, you can start brainstorming.
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4 Key Areas of Category Management
“Without continual growth and progress, such words as improvement, achievement, and success have no meaning.” – Benjamin Franklin
Category Management should always have two main objectives.
Generating savings, but more importantly,
Maximizing value creation
Let’s discuss how Category Management is the perfect lever for bringing your consulting procurement to the next level.
Measure your Performance
If you worry about team performance, the risks, and the issues associated with a Consulting project, you are totally right…
Companies that have implemented a Category Management System were able to make breakthrough savings (10-30%) and noted improvements in supplier performance, internal client satisfaction, supplier relationships, and visibility on spending.
The problem however is, that Consulting is rarely managed as a category, but rather as part of the indirect procurement together with Travel and Insurance. In some case, Consulting is folded in the professional services category.
But there is a much better way to do it –
The first step to optimizing the Consulting Spend is to recognize Consulting as a strategic category.
Indeed the size of the spend (0.5% to 3% of revenues) added to the potentially significant impact on the business makes it a key enabler of the strategy.
But does Category Management fully apply to the Consulting Category?
Monitoring the Consulting Category – 4 Key Areas
One of the principles of category management is to implement a continuous analysis of the spend, the market, and the performance of the suppliers to identify opportunities for improvement.
1. Spend Analysis –
Performing a Spend Analysis is often the first step in aligning the Consulting Procurement Strategy with the Company Strategy. To analyze all the projects outsourced and to forecast for the future, you need to aggregate the Consulting Expenses across all organizational divisions.
The objective of the spend analysis is to produce a fully documented understanding of the company’s prior and future spend for Consulting Services, broken down by users and suppliers.
2. Market Analysis –
Knowing the Consulting Market is crucial to procure Consulting Services. Leveraging your existing consulting spend, you can analyze the consulting market for the main capabilities of interest for your company. The second step, often more complex, given the lack of familiarity with the subject, will be to look at the market for the services you could use to accelerate your objectives and create more value.
The outcome from the Consulting Market Analysis should be a better working knowledge of the supplier market and your place in it. You have identified potential suppliers and know your value as a customer.
But unlike other categories, you cannot limit your supplier analysis to only the major players. The complexity of the market, the diversity of the offerings and the granularity of your potential needs make it necessary to take a deeper dive into the Consulting Industry.
3. Supplier Performance Analysis –
The Supplier Performance Analysis should give you a holistic view on the Performance of your Consulting Providers, broken down per capability, organizational division, and project. It is often based on metrics on tangible performance, such as on-time delivery, respect of the initial budget and quality of the deliverables.
4. Managing the Human Factor –
Consulting Services have an intrinsic human component, that has a direct impact on the performance. Attitude and relationships have a powerful effect on the project’s outcome.
The behavior of the Consultant with the different stakeholders, his ability to build trust or to transfer knowledge are parts of the delivery as well.
Especially for Large Companies, it is recommended to look at the performance of the consulting firms at the Partner or project manager level. Indeed, it is not unusual to see significant variability of performance when looking at a company level. However, the performance can be very well correlated with individuals. In other words, people trump brands, and not all Companies are good at everything. Learn to identify the sweet spot of each of your Potential Providers and the partner that you want to work with, depending on your needs.
Last but not least – a Consulting firm can deliver perfect action plans, but fail to support you in the implementation or in transmitting enough knowledge to take over when they leave. Make sure this is taken care of.
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13 Questions About Internal Consulting Answered. And Why Organizations Should Take Note
“You can’t sell it outside if you can’t sell it inside.” ― Stan Slap
1. Focus only on the biggest value projects.
Over the past 20 years, the growth of in-house consulting groups has been one of the most notable elements of change in the fast-moving Consulting Industry. It is hard to evaluate the extent of internal Consulting. But large companies such as Bayer, American Express, Google, Airbus, Samsung, Dell, SNCF, BASF, Deutsche Post, etc. have built internal consulting structures that can go from small ad hoc teams to fully-developed groups of 100 consultants and more.
Know the Consulting industry
Consulting can create great value for companies who can use it strategically and are able to leverage the advantages it offers. But there are smart ways to do it, and some not so smart.
2. Who do Internal Consultants usually work with?
Even though internal consultants are permanent employees of an organization and typically only consult for one single ‘client,’ they often provide equivalent services, and in many cases are former external consultants. One could argue that Internal Consulting is the ultimate form of specialization of the Consulting Industry. However, in doing so, companies are partially losing the best practice dimension and independence..
3. Do Internal Consultants have the same expertise as External Consultants?
There used to be an experience and impact gap between internal and external consultants. However, as the value chain is evolving, internal consultants have now access to better talent and methodologies. On some mainstream projects such as commercial excellence or lean, the impact from internal consultants is now equivalent to the one brought by external consultants.
4. How is internal Consulting affecting costs?
Costs are often given as the first reason for creating an internal consulting team, according to CEOs. When most companies were growing and consolidating, the prices of consulting firms have been steadily increasing. Internal Consulting is a great option in lowering this cost.
Large companies have professionalized their Procurement, and they now realize how much they spend on Consulting. Cost-Conscious CEOs want to decrease their Consulting Costs and stop hiring only the large strategy players such as McKinsey, Bain, or Boston Consulting Group.
5. How are Internal Consultants paid?
Employees in internal consulting groups are most of the time compensated on the same grids than internal employees. Their full cost is, therefore, two to three times lower than external consultants. This indeed it does not include the cost of the partners or the cost of the beautiful office in central Manhattan.
6. What would be the deciding factor in favor of Internal Consultants?
If internal consulting teams can provide performance close to the external ones, the trade-off will almost always lean in favor of the internal team.
7. Is working in an Internal Consulting Group a rewarding career path?
Internal consulting groups can also be used as a career accelerator, inspired by the black belt concept developed by GE. High-potential individuals get trained in consulting problem-solving and managerial concepts. They also acquire the structure and discipline of consultants.
They also get exposed to the top management and highly strategic projects, giving them a broader perspective on the company. After a few years in the Consulting Group, they take a senior position in the organization. Talent is, in this case, kept in-house and developed.
Alternatively, a few years in an internal consulting role can be a smooth entry point within a large organization. The newly hired employees can work on a broad range of projects, and in return, share their experience acquired in prestigious firms with other internal consultants. At the same time, they gain precious knowledge of the company and build a professional network.
8. How are sensitive and confidential projects handled?
Internal Consulting is the preferred choice here rather than hiring an External team. There are projects where the management does not want any outsider view. It might be because it involves a highly strategic decision or very touchy Intellectual Capital. The more people at the party, the higher the risk of breach of confidentiality.
9. How is Clients’ information protected with Internal Consultants?
Most consulting firms will argue that they have established “Chinese walls” and that all information stays private. However, it is at times difficult to disconnect from the information you have and refrain from using it in the next project. But working with Internal consultants decreases the risk of using the information collected as a benchmark or reference from another client, with the next one.
10. Is the Executives’ perspective on working with Consultants changing?
Not long ago, working with consultants was seen as a necessary evil, and we all know the joke about the consultant and the watch. However, Executives have seen the benefits over the years in working with External experts. Their image has shifted to a more neutral position, from judgment to support. As you can imagine, the growing population of ex-consultants in the Executive ranks helps as well.
Companies have understood the interest of dedicated teams working on projects independently from the rest of the organization. They have indeed identified a potential lever for improvement in creating teams with the same focus and ways of working as external consultants.
11. What are the main reasons to start an Internal Consulting team?
Consulting to its core characteristics is about internal teams, experts in their domains, working on project mode to improve the effectiveness and efficiency of the company.
You will then realize that many functions in the organization fall under this umbrella. What about the excellence functions newly created to work on commercial or purchasing excellence? Or the customer experience task force? The internal audit team working on processes? The business process management group?
12. How can an organization kickstart an Internal Consulting team?
Setting up improvement teams is not a new concept. But it is worth exploring the evolutions. You can organize them as a single group or community to professionalize the ways of workings. Or manage the demand and optimize the resources by creating fluidity across the teams. Afterward, you can decide to refer to it as Internal Consulting or to keep it stealth.
Organization structures are now optimized to get synergies and make the most of the existing talents. If you put together the needs of all the business lines and support lines, most companies will be able to get a critical mass of similar projects that could justify building a dedicated team.
13. What are the first steps in setting up an Internal Consulting team?
You can start by setting your objectives and the size of the team. Having clear objectives can help the team and position their efforts on the path to success. Another big point is funding. There are various funding models, the most sustainable one is to charge each internal Client the full cost of the project. However, for kick starting your practice and demonstrate the impact you could use corporate funds.
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