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8 Biggest Reasons Why Organizations Need a Consulting Firm and How Consultants Cater to Clients’ Needs

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. 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.

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

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. 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.

8 of the Hottest Industries Ready for Disruption According to Experts

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. 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.

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7 Effective Steps to successfully launch your Consulting Project

The importance of information in planning and managing your Consulting projects cannot be overstated. Information is essential for the success of any endeavor. And naturally, whoever has the upper hand in the game, has the best chance of winning. However, at the center of successful Consulting lies mutual respect and mutually beneficial business. It has always been our credo at Consulting Quest that it is the most productive approach to all types of projects.
With that said, let’s discuss this topic in more detail.
As a general rule, the most successful man in life is the man who has the best information. – Benjamin Disraeli
There are some important points for consideration here.
Before you launch your next Consulting project, you need to review some critical aspects, such as:
1. The downside of asymmetrical information –
And why should you care as a client?
Asymmetrical information, otherwise known as information failure, refers to a situation when one party in a transaction has more information, than the other party. Almost all economic transactions involve some information asymmetries.

Leverage Disruption to create more value through Consulting

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

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

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

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

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

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

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

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

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

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

Create Value Through Consulting

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

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

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

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

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4 Practical Strategies to put your Consulting Spend back on tracks

“Consultants have credibility because they are not dumb enough to work at your company.” – Scott Adams.

Just joking! Now, that we have your attention, let’s talk about strategies, data utilization, value of services, and price.
When you start to look at your consulting spend and realize the drift in costs, amongst the various immediate initiatives that you can consider, think about scanning your consulting spend. It’s about slicing and dicing the data you gathered, to identify the outliers. You’ve seen the patterns and have a clear idea what’s going on. Discrepancies in the spending or the practices are often indicators of something that went wrong. Let us walk you through the most common situations.
Spending more is not always a problem. What matters is the value being created. Let’s check first if the money is well spent if synergies could be created and ways to avoid waste.
When one part of the organization is spending more than others?
What could be the root causes of this situation?

The scope of responsibilities determines Spending & Value created

All parts of the organization are not equal in their scope of responsibilities. Since Consulting is roughly proportional to revenues, a large Business Unit, for instance, is prone to higher Consulting Spend than a small one. Looking at the ratio spending vs. revenues can be a good way to look at a situation. Conversely, in a turnaround situation, you might be spending more on smaller GBUs to bring them back to value creation. Be careful not to throw good money after bad though.
The corporate can also be a good client of Consulting Services. For a company with an integrated Corporate in charge of Strategic decisions and Excellence programs, the Corporate can have the larger Consulting Spend whereas a decentralized Company with a light Corporate should expect a minimal spend for the Corporate functions if you have the later with High Consulting Costs, you may want to question either your governance model or your demand management.

Create Value Through Consulting

But you need to know that the Consulting Industry is not one homogeneous block. There some regional specificities, including on the capabilities.
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How the context and the strategy affect Consulting Spend

A regulatory change, a reorganization or an acquisition and the associated PMI can inflate the Consulting spending. If a part of the organization has launched a major transformation or has an ambitious strategy, it can increase its expenses for Consulting to accelerate the process. This can make sense to capture value faster, just make sure however you don’t end up overspending with luxury consultants and put in place a monthly reporting of consulting costs. This will avoid unpleasant surprises.
Sometimes Executives use Consulting as a workaround for strict HR policies since the rules on Consulting are often looser. Creating surprisingly a bump on Consulting Spend in the middle of a recruitment freeze. Cost reduction objective was then perfectly achieved.

Consulting Fees vs Consulting Expenses – the footprint

Keep in mind that most Consulting Projects separate the Consulting Fees from the Expenses of the Consulting Teams during work on the projects. If you are not cautious, you might end up paying up to an additional 30% of the total cost of your project only on expenses. If Consulting Fees are really tight, this ratio might end up being quite high. In this case, mostly make sure consultants are respecting your travel policies. There is nothing worse than consultants flying business while the rest of the company is in a travel ban.

If the entity selecting the Consulting Firms is based in Europe and tends to shop locally, every project in North America or Asia will have a premium attached to it. And don’t think that you are safe because you work with a large global Consulting Firm. Because most of them are set up with local P&Ls and are pressured to optimize their local resources, they would rather send their understaffed European resources than find local resources for your project.
When a Consulting Firm is charging more than others
When looking at the numbers, you realize that John Doe Consulting is charging 40% more than your other Consulting Providers on similar projects. Or maybe they are charging more only when working with Business Unit B, the most profitable of your BUs.

The scope and deliverables

Look closely at the scope and the deliverables of the projects. For broad projects with several phases, you can either contract in one large project and in several small projects following the phases. Another point you want to look at is the range of the projects. For instance, for a Lean Manufacturing project, one Business Unit might have decided to work on all the factories at the same time, when another one will work on a small pilot group, and then implement in the rest of the organization.

The complexity

The complexity of the project can also have an impact on the price. Maybe you are using John Doe Consulting only on more complex projects because they are knowledgeable and can mobilize a huge volume of expert resources in a short period of time. Obviously, this often comes at a premium. In the same way, if only a handful of companies can complete a given strategic project, supply and demand rules prevail.

The footprint

The footprint of the organization can also have an impact on the price of the projects, through the expenses as mentioned earlier. A business unit heavily centralized and solely based in one region will probably face lower Consulting Expenses than a Company based in several regions.

The price – value dilemma

Some Consulting Firms are just more expensive than others. The real question that you should ask yourself is: “What is worth the investment?”. Spending more is not always wrong if the return on investment is excellent. What matters most is the fit and the impact.

The Culture

If your teams are culturally homogeneous, or on the contrary, extremely diverse, the performance evaluation will probably not be impacted by individual cultural differences. However, if your Business Units have different cultural structures, then it might not make sense to compare the performance results from one with the other. In other words, your Brazil Headquartered BU will probably have better scores, independently of the latest results of the soccer team.

The quality of their providers

Lower-Performance scores can come from the quality of the providers. It can be linked to the quality of the local Consulting Market. The logic behind when you are sourcing the best providers for your direct business should also apply for your consulting expenses. The probability of finding them in a 5-mile radius is fairly poor. Having been classmates with one of the partners or belonging to the same baseball fan club is not much better.
When Department D works almost exclusively with one Consulting Firm
Working with familiar consultants is comfortable. The Consultants know very well your business, its complexity, and even internal politics. However, we are always amazed to see the same senior partner morphing from a pricing specialist to a lean expert or a digital guru. And if it was only the senior partner teaming with other qualified partners, but you see the same phenomenon at the principal and consultant level. Or simply put, always the same team, different color jerseys.
Here is an interesting take on expertise –

“Chess masters don’t evaluate all the possible moves. They know how to discard 98% of the ones they could make and focus on the best choice of the remaining lot. That’s the way expertise works in other fields too: Wise practitioners recognize familiar patterns and put their creativity, improvisation, and skill towards the marginal cases.” – John Dickerson.

So now you know who is spending and why. Now what?
There is a myriad of ways to approach this challenging situation. What really drives the way forward is the sense of urgency you have. Here are four from the simplest to the most disruptive.
1) Implement a systematic competition policy to keep providers on their toes.
2) Centralize consulting budgets in each business line to align priorities.
3) Set a ceiling in consulting spend per unit vs historical or top line.
4) Implement a demand management process to match spend and ROI.

Agree? Disagree? How does your Consulting Spend look like?
Don’t hesitate to reach out and share your experience.
We love to hear from you.

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Why You Need Consultants Passionate About Your Project ? And The Best Ways to Measure the Value they bring

In this post, we would like to talk about two extremely important elements that determine the project’s success. Passion and value created.

“One person with passion is better than 40 people merely interested.” – E.M. Forster

The type of Consultant you decide to hire should not only be based on the right expertise and experience, but their passion and commitment to deliver the best value.
Being truly passionate and dedicated to your work can make a big difference in the level of success you achieve. Choosing Consultants for their experience and expertise is one thing, but also their personal commitments and genuine passion for your project is something that plays a huge part.
We are all aware of the belief that passion is particularly valuable for small businesses, and entrepreneurs, but it’s equally important in big organizations and Consulting as well.
There is no substitute for passion

Source Consultant

The importance of information in planning and managing your Consulting projects cannot be overstated. Information is essential for the success of any endeavor. And naturally, whoever has the upper hand in the game, has the best chance of winning. So how to launch a Consulting project with success?

Read More

And here are 3 Fundamental Reasons why choosing to work with people truly passionate about your project can make a big difference:
Before you launch your next Consulting project, you need to review some critical aspects, such as:
1.  Knowledge can be always expanded –
Knowledge and expertise on the niche subject is a definite requirement when choosing a Consultant for a project. But there is always more to learn. And it takes great commitment and passion for keeping learning. And generally, we live and learn throughout our entire lives.
 
2. Passion often wins over obstacles –
No matter how well we plan projects, there will always be room for surprises. And life itself, in general, can never be predicted. Issues and difficulties we haven’t plan for can quickly arise. Individuals and teams that have a passion for seeing the project succeed, will be more resourceful and tenacious when the going gets though.
 
3. Passion improves performance –
Or simply put, when you love the work and the project, you are more likely to do your absolute best. This is the kind of attitude that gets you to the finish line, the attitude of winners, and the one that produces the best achievements.
Assuming you found the best Consultant for your project.

Here is how best to measure the value created by Consultants:
Too many companies are thinking about consulting as additional resources or through the lens of the project they are working on. And few executives have a clear view of the value Consultants provide. The added value brought in by consultants can be classified into two main Categories –  Technical and Political
1. Parameters of Technical Added-Value .
Technical added value best corresponds with know-how in specialized professional fields. A seasoned expert in their area has decades of experience and can undoubtedly provide great benefits by working for your organization.

Providing Outside Knowledge – Derived from the wealth of their professional experience, Consultants possess rich information on customers, products, markets, and competitors. They can perform surveys, reach out to experts, and leverage their analytical power in ways unaccessible to clients. Indeed, the more consultants are specialized, the higher the chances they have faced similar issues or worked on adjacent problems. They provide a benchmark, state of the art elements, and perform maturity assessments.
Accurate Problem Diagnosing a Problem and Solutions –  Often, the problem an organization struggles with, is how they ‘see’ the problem. Misdiagnosed problems will further complicate the situation. And often lead the team in the wrong direction. Finding a solution being therefore much more time-consuming and expensive.
Ability to frame and analyze an issue leads to structured problem solving and accurate and effective recommendations. A Consultant will normally gather, analyze treasure trove of information, and present it in a way that enables Executives to make effective and optimal decisions for the company.
Assistance in the implementation of a solution – Consultants can successfully offer help with facilitating the generation of a capability improvement roadmap as well as Securing/Accelerating the execution – Projects Management; Additional dedicated resources; Increased expertise level are all elements of the execution which is the crucial stage to achieve the expected impact.

Audit of management practices – that includes analyzing performance; adherence to processes and policies; and also providing an independent assessment.
2. Parameters of Political Added Value .
In any organization, regardless of how big or small it is, there is always politics and political games at play. That, unfortunately, can create tension, and cause friction between various interests, departments, groups or individuals. And Executives are especially affected by these dynamics. Consultants, however, can effectively contribute to smoother processes, introduction, and facilitation of new measures, and much more.

Providing legitimacy of decisions – Consultants often can be used as a scapegoat in situations where the solution of a problem requires it. An Executive can justify a decision in question, and have the Consultant take the blame in case something goes wrong. It provides relief for the Management team and mimics the famous crime drama plot with the Consultant taking the ‘bad cop role’ to execute painful decisions.
Facilitating the convergence between stakeholders on a variety of issues and decisions – analyzing a situation, building alignment and improving relationships among key stakeholders, and improving decision-making process, can yield great benefits.
Acting as a Trusted Advisor – Playing a sounding board role to bounce ideas off of when CEOs can’t discuss them with their teams, is a valuable practice. It might feel lonely at the top as CEOs cannot share everything with their Leadership team. Besides, the Trusted advisor will not have an agenda and can provide an unbiased second opinion.
Enforcing unpopular changes – Cost cutting projects or restructuring are a great example. Those can, of course, be led internally, but it can be difficult to find volunteers to be the executioner of tough decisions or to be the one recommending to cut this or that part of the workforce.

3. How to Best Measure the Value created?
Now that we’ve discussed the value added by working with Consultants, let’s talk about the best ways to measure the value they created.
The Best Ways to Measure the Value Added by the Consultant are described below:

Measuring Tangible benefits

Tangible benefits have a direct impact on the P&L. They are easier to measure since they can often be evaluated in numbers
Increasing revenues: The work done with your Consulting Provider can improve your top-line with more Sales, better sales margins, or increase in market share.
Reducing costs: The Consulting project can also have a positive impact on your costs, both direct and indirect through improved efficiency, better organized and sourced purchasing, and more.
Avoiding Costs (or avoiding future waste): It is a more complicated evaluation. However, it is often possible to calculate the avoidance of cost due to an improvement in reliability, a better focus, or a Capacity increase (assets and workforce expansion).
Improving Cash/Working capital: Finally, financial measures such as cash and work capital improvement can also be considered as benefits from a consulting project, for instance, inventory usage and management, improved and optimized Payment terms, development of better Financing options and payment/credit terms.

Measuring the Intangible benefits

With no obvious method to date, it’s easier to identify tangible P&L impacts. But there are other fields where subjective or intangible dimensions are measured. HR is an excellent example, with employee engagement, for instance.
Culture, Diversity & Inclusion, Talent management: There are numerous examples in management literature of how a new culture has improved innovation, how diversity and inclusion lead to better decision-making or how an efficient talent management system can help bring in and retain stellar individuals. All these results have an impact on the performance of your company, and on the value created by your team, even though it is difficult to quantify it precisely.  
Process and Systems Optimization: In the same way, optimizing your processes and systems can only lead you to serve your clients better, and thus create more value for your company. For instance, gaining a half-day on a 5-day process can allow you to serve 10% more clients with sane resources, which has a direct impact on your top-line, and little on your costs.
The long-term impact of the transformation program on the value of the company: If you launch a transformation program that moves an organization from a commodity player valued at x7 EBITDA to a specialty player valued at x10 EBITDA, you have naturally created tremendous value for your company and your shareholders

Ready to launch your next Consulting project? If you need help in selecting the best Consultant who can provide the most value, we will be happy to help you decide. Just give us a call today. We will be happy to be of any assistance. And provide you with valuable insights on how to maximize your project’s chance of success.

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The 8 Defining Stages in the History of Consulting

“Consultant” is not just a fancy name, but a professional who can make a difference in how a company address challenges and succeeds. A simple definition of a “consultant” includes the following: a provider of expert advice to another person or an entity, who is compensated for their services.
How old is Consulting?
We are not exactly sure, but the evidence of first Consultants offering advice might be traced back many centuries ago. Consultants then, might not have been called “Consultants,” and Thought Leadership could have been words of wisdom and guidance. As this ancient quote by Homer to Achilles (in the Iliad dating back from 750BCE), suggests, a great leader can inspire his followers, and lead by example too:

“Be both a speaker of words and a doer of deeds.” – Homer.

Modern Consulting generally follows the Economic development starting in the 19th century, and it has been shaped by it in profound ways. Management consulting sprung out of the need to help businesses improve their performance.
The 8 Defining Stages in the Development of the Consulting Industry –
The history of Consulting is holistically intertwined with the growing needs of businesses, shaped by industrial developments worldwide.
Businesses needed expertise and independent perspective to help them achieve their goals, improve strategy, streamline processes, increase sales and profitability, and many more, and Consultants perfectly delivered in their role of Independent contractors.
1st. The Need for Operations Efficiency in the Early 20th Century –
 Late 19th century and early 20th century, when the first need for Work Rationalization emerged, is generally viewed as the beginning of professional Consulting, as we know it today. The need for expertise in organizing people, processes, and machinery gave rise to the creation of the first management consulting firms. Among the main factors for the creation of Management Consulting are the increased need for Efficiency in Operations, and leverage of the specialization theories of Taylor and Babbage, Arthur D. Little (1886) started as general management service, and later specialized in technical and management engineering. They were the first to introduce “scientific management.”
These methods would allow companies to improve the efficiency of their operations by studying and optimizing each part of an operational task. 
As U.S. managers in the early 20th century scrambled for efficiency in their factories in and needed ways to speed up their workers’ performance, these progressive methods were enthusiastically adopted.

Create Value Through Consulting

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

2nd. The Emergence of Management Consultancy –
As Management Consulting developed, the boundaries of the service became clearer and more profound. Clients started seeing the need and value Management Consulting could provide.
Management consulting is a service directed at managers, to help them make decisions. It is knowledge-intensive and independent. The work is structured as a separate project and can be conducted part-time or full-time.
As pointed by Marc Baaji, New forms of production spurred growth and more significant capital needs, well beyond the typical financial means of any given business. At the same time, the need for expertise and professional business management grew significantly.
3rd. Growth, Profitability, and Challenges During the 2nd Industrial Revolution –
The second industrial revolution paved the way for growth and profitability. However, it also created many challenges that managers could not always overcome on their own, especially because investors were no longer involved in the day to day operations like most owners once were.
The separation between management and ownership of factories grew into chasms. Professional managers were neither owners nor entrepreneurs. Facing the responsibility of making major complex decisions, they looked for advice from consultants.

Even governments started to seek advice from consultants, whether it was the US Government hiring Booz Allen and Hamilton or the French Government implementing scientific management in its defense industry.
4th. Demand for Financial Advice Following the Great Depression of the 1920s –
Following the great financial crisis of 1929, The Glass-Steagall Banking Act in 1933, stopped banks from getting actively involved in re-organizations and consulting activities. This new law triggered rapid growth in demand for expert advice in banking, finance, management, strategy, and organization, all of which boosted the consulting industry. And one of the pioneers in modern Consulting industry, McKinsey & Company, founded in 1926, quickly established Itself as a provider of both Accounting and Strategy expertise. While banks and large accounting firms were moving out for regulatory reasons, the firm experimented with new business development methods and leveraged its general survey of company managers to gain corporate clients.
 5th. Major Strategy Frameworks Created in the 1950s & 1960s –
 Structure follows Strategy, according to Raymond Chandler, as a means to its implementation. From a consulting standpoint, it turns out that strategy consulting followed the organizational efficiency version of the service. Under Bruce Henderson’s leadership, the BCG authored multiple strategy frameworks that are still in use today. The two great examples include:

The “Growth-share Matrix” which helps companies evaluate where and how to allocate cash among their business units, and
The “Experience Curve” which models the evolution of costs with the number of units produced for the first time.

6th. The Emergence of IT Consulting And The Big Four –
During the 1980s and 90s, the demand for strategy and organization consulting developed rapidly. Meanwhile, the need for information technology advice and expertise grew exponentially. Both the number of consultants and their range of activity exploded, spreading out geographically into Europe, Asia, and South America.
IT Consulting and the Big Accounting Firms mark a major development in Consulting.
Computer technology and its wide adoption in the economic and business terms ushered in need for a new field of consultancy.
IT consultancy became an important new niche. However, computer manufacturers were prohibited from offering their expertise due to antitrust concerns. As a result, IT consulting developed independently, offered by outside vendors. It led to the creation of EDS (Electronics Data Systems) by Ross Perot, a former IBM employee.
The Big Four, who were The Big Six at the time, swiftly diversified beyond accounting and auditing, into consulting. Seizing an opportunity to grow their consulting market share, they populated the IT Consulting niche market, helping clients, among other things, to implement enterprise resource planning (ERP) systems all over the world. By mid-1990 they became larger than most other consultancies. Most of them ending up splitting as a consequence of the Enron Scandal.
Depending on calculation methods, IT consulting can be considered the largest and fastest growing segment of management consulting, with only operations excellence coming close.
7th. The Business of Excellence –
Business excellence as a concept sounds really exciting, and we can thank  McKinsey for being the first who introduced the idea of ‘scaling up’ success through excellence in the 1980s. Leveraging the work of Peters and Waterman from the book  “In Search of Excellence,” McKinsey introduced the 7-S framework. Also inspired by Nadler and Tushman’s Congruence Model and Galbraith’s Star Model – this framework served as the foundation for linking strategy, organization, and culture. It identified competencies and later, capabilities as sources of competitive advantage.
Today McKinsey & Co continues to be a Consulting industry leader. Since the mid-1990s, the company offers Operations Excellence programs and most large consultancies have embraced the same offering to the point of commoditizing it. Moreover, today’s increasingly competitive environment requires true excellence for entire processes from A to Z. Think excellence in manufacturing, excellence in R&D, excellence in marketing and sales, …. you name it.
 8th. The Segmentation and Specialization Era –
 For consulting firms that were previously leaders in one field of management consultancy, it is always challenging to establish a similar position in a new field. It is difficult to diversify. The more logical approach is specialization by capability and by industry sector. It has been a major factor for Management consultancy branching out into several specialties:

Strategic management
Information technology (IT) consulting
Human resource consulting
Virtual management consulting
Operations management consulting
Engineering​ management
Management science

Beside this segmentation, Consultants also began to focus more on specific industry verticals.
And now what? –
Unless you have inherited the same perception skills as Tom Cruise in Oblivion or Jim Carey in the Truman Show you have probably noticed that everyone speaks about embracing Digital. Consultants have clearly identified this wave and strategy, the big 4 (they are back), IT consultancies and even media agencies are colliding at full speed. We will develop this in a future post..

Curious to learn more about the history of the Consulting Industry?
Don’t hesitate to comment, share or reach out to chat further.
We are always happy to debate about our favorite subject: Consulting Sourcing.

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What Happens Once You Diversify and Optimize Your Consulting Providers’ Panel?

“The core of the consulting business is going in and essentially making yourself indispensable by eating the brain of the organization, meaning consultants go in and assume key functions in the organization.” – Matthew Stewart

You might or might not have an official list of preferred suppliers, but most likely you have consulting firms that you work regularly with. We will refer to them as your panel, just to simplify things. So now, let’s see how to upgrade and prepare the right panel for your future challenges.
Most Companies work with consultants to access their skills and experience that are not available In-house.
One of the main procedures to do is a Performance Diagnosis, that will allow you to measure the Performance of each of your suppliers and identified the high- and low-performers.
Rationalizing Your Panel –
#1- Let Go of Low-performers –
This is a no-brainer. You don’t want to work with Consultants that are not delivering the results expected. Get rid of the companies that are consistently underperforming.
When the feedback is alternating from good to bad, try to identify a pattern.
The poor feedbacks are on the same type of projects. They don’t have good results when they work in a hostile environment. Or they don’t really do well with very operational teams. Maybe you shouldn’t consider them for these projects in the future.
Only one of the Consulting partners has low-performance. Why not ask to work exclusively with the partners that have positive feedback?

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#2 – Lack of Bench Is Not an Issue –
It’s best to avoid tying yourself to only one supplier on your strategic needs. Think Supplier Risk management and apply the same sound principles than for other purchases.
Besides, each Consulting Firms have a different DNA profile and a different portfolio of projects at which they excel.
Find 2 or 3 different Consulting Firms for each strategic need. You might end up with the same supplier for several needs, and that is fine. And competition will keep all providers on their toes.
#3 – Identity Rising Stars on Your Team –
You will probably realize that you need to find new Consulting Providers for some strategic needs. When you are screening for new profiles, don’t forget that you only want high-performers. Ask for references and check them or ask a third-party to do so (when references are with competitors, or if you want to remain anonymous). Make sure they have done projects that are relevant to the said strategic need.
#4 – Diversify and Expand Your Sourcing –
Lack of actual knowledge of the current Consulting market leads many Executives into sourcing locally for their Consulting Projects. It’s also a fact of life that most sourcing is based on word of mouth and personal networks.

But you need to know that the Consulting Industry is not one homogeneous block. There some regional specificities, including on the capabilities. If you are looking for Operational Excellence Experts, you might have a look at Europe where companies are more mature in that field. For Leadership capabilities, on the other hand, you should explore the other side of the pond, where North American firms are more numerous and experienced.
Besides, you might need Consultants in locations that are on the other side of the globe. Will you have your Consultants travel thousands of kilometers to work on a project? Or should you just find Consulting Firms in any part of the world, when they best match your project’s needs? You know the answer.
#5 – Hunt for Freshness of Ideas –
Another key winning component is the freshness of ideas. Independently from the performance of your existing Consulting Providers, you might want to bring in new blood and fresh ideas. The Consulting Industry is constantly evolving, and new concepts are emerging. To stay current on the innovation trends disrupting your market, for instance, you want to look at the emerging players to test them out on projects.
Focus on Developing Synergies –
An interesting insight of the portfolio of projects is the potential synergies between different groups or business units, in particular for smaller projects.
For instance, you might find that you bought several times more or less the same project in different parts of your organization. Depending on the feasibility, you might consider grouping these needs in the future and organize a joint competition.
You might also realize that the same Consulting Firm sold more or less the same project in different business units. Putting all the projects together would have helped you to increase your bargaining power and get better prices.
Last, if one part of your organization has a high-performer of a specific type of Consulting Project, while its neighbor had a low-performer, you probably want them to share the love (while you take out the low-performer from your panel).
So, we just described a best-case scenario, the steps, and the approach you can take.
 The results will be worth the effort! As extra value and savings are generated, you will be jumpstarting your transformation.
This is the most efficient way to win the buy-in of the stakeholders and to fund the desired transition.
The next step is to hire a data scientist, get started on crunching the numbers, add a pinch of artificial intelligence and a good dose of machine learning. Cool trendy techniques are fun but don’t forget classic methods can be very efficient also.

Do you have a List of Preferred Suppliers for Consulting? How did you build it?
Or do you want a little boost to get started? Don’t hesitate to reach out.
Share your opinion, and if you need our perspective, we love to debate.

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6 Tips on Monitoring Your Consulting Spend That Will Give You Confidence & Peace of Mind

 “Analysis is the art of creation through destruction.” – P.S.Baber, ‘Cassie Draws the Universe’

Monitoring your Consulting Spend might sound like a hassle, but it really comes down to a few main steps executed consistently. If you are interested and determined to see the benefits of transforming your Consulting Procurement Capability, you must regularly measure the impact.
And the good news is financial impact is an easy metric to track. 
When you monitor your Spend, you will need to set a target, segment the expenses, track the data and monitor the development closely. 
Here is how to do this best – Our 6 best tips to monitor your spend
#1- You Need to Establish Your Guidelines
What are you trying to achieve? Setting a target is the best way to make sure you are on the right track. You can decide on a loose target, for instance, to stay in the limits of X% of the revenues. Or you can opt for a stricter goal setting for a fixed target.Having a set target, or if you prefer guidelines covering different segments of your Consulting Expenses, can help you determine the level of expenses, the performance and expected to return on investment.

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#2 – Limit the Consulting Projects to the Most Beneficial Oness
Depending on various factors, and considering turnarounds, you know that Consulting Projects vary in scope and outcomes. You may want to limit Projects that are not presenting tangible benefits (i.e., cost savings, sales increase, etc.) in less than one year.Conversely, you can loosen those criteria to prepare for future projects when the financial situation permits.
#3 – Segmenting the Expenses Will Give You the Real Picture
Looking at your Consulting Spend as a whole doesn’t always bring enough information to identify trends and patterns. You might want to segment your expenses based on:

The size of the projects: small projects vs. large projects
The strategic importance and impact
The group handling the procurement process

If you decide to implement Demand Management, this segmentation should fit with the criteria you define.
#4 – The Importance of Tracking Everything, Tail Spend Included
Often companies only monitor the Consulting Expenses that go through the centralized Indirect Procurement group. They consider that smaller projects are not relevant to the analysis of the Consulting Spend.

But, if you are familiar with the notion of tail spend, you know that, when they are unmanaged, small expenses can add up to gigantic amounts.All the Consulting Expenses, even the small ones, have to be integrated.
#5 – The Monthly Dashboard Will Serve You Year Around
This might sound obvious, but we like to remind you to create a monthly (or quarterly) Dashboard.
Consulting Expenses are very often seasonal with a peak at the beginning of the year, and a clear slowdown in the last quarter. While you are cruising through the peak period, be careful and don’t burn all your Consulting budget in 3 months. You might need to keep some money in the bank to absorb a last-minute strategic project.
Make sure you monitor at the same time expenditures (what you paid) and engagements (what is still to be produced and paid) to avoid some end-of-year surprises.
#6 – Make Data Your Strongest Ally

 “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” – Jim Barksdale.

Gathering, analyzing and optimizing your data is of paramount importance. Without data, all you have is a variety of opinions. To touch on data briefly – in a recent study performed by the MIT Center for Digital Business, it was revealed that companies with data-driven decision making achieve 4% higher productivity and 6% bigger profits than the average ones. It is also a known fact that many business leaders often don’t make data-driven decisions.
Take the savvy approach, and always apply the data you have available when it comes to your Consulting Spend.

Do you monitor your Consulting Spend? Do you want to share your successes or your challenges?
Or do you want a little boost to get started? Don’t hesitate to reach out.
Share your opinion, and if you need our perspective, we love to debate.

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How to Best Define Your Procurement Strategy: Pillars & Pitfalls

We should probably start with a definition of Procurement Strategy –
A successful Procurement Strategy for the Consulting Category requires a good understanding of the overall Strategy, the Consulting Market and the past performance within the category. It has to be in line with the Procurement Guidelines, and custom-made to Consulting.
We have reviewed below the ‘pillars’ that can produce effective outcomes, and pitfalls to try to avoid.
Feel free to apply what suits best your specific vision and policy

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our Consulting Strategy

Halfway between Strategic planning and Demand Management, one of the overlooked levers is to define a Consulting Strategy.
This Consulting Strategy aims at identifying the key projects or project areas where using consultants will accelerate your strategic objectives and create the biggest impact. Once defined and planned over a period of 12 to 24 months the consulting strategy will help in guiding the teams towards the key actions supporting your strategy, and alternatively will indicate areas where a lower effort should be engaged.
Pitfall – failing to provide a proper time frame, delegating extra effort or human resources to projects that are smaller, or not enough resources, can backfire.

Choosing Between Make-or-Buy Strategy

Defining a Make-or-Buy Strategy is another key step in establishing the Procurement Strategy for the Consulting Category.
The Make-or-Buy Strategy is very closely linked to Demand Management, and both matters should be (re)evaluated altogether.
The goal here is to come to an improved, more effective decision-making process, often including a decision framework and a decision matrix.

This framework allows deciding what projects should be prioritized and what is the best execution model for each project.
As an example, think of a major transformation exercise for an insurance company across all sites in Asia to implement new development methodologies inspired by the lean startup and the scrum principles.
The consulting firm could provide all resources for the project, or you could decide to implement a hybrid team mixing external consultants and your own in-house scrum masters.
Pitfall – Missing out on fees’ reduction due to the inadequate decision process, weak buy-in from the teams, and uneven knowledge transfer from external firms.

Your Preferred Supplier List & Master Service Agreements

One of the Strategies that can be extremely efficient in Consulting, like in other categories, is to build a Preferred Supplier List.
It is based on the fact that 80% of your needs are usually covered by 20% of your Suppliers. You can anticipate what Suppliers will be engaged, when and how, by looking at both your past Expenses and the strategy for the years to come.
With these “Preferred” Suppliers, you can start negotiating Frame contracts, or Master Service Agreements, including pre-agreed terms and conditions and volume discounts.
Pitfall – not having clear expectations, or deficiency in the list of Preferred Suppliers can affect the projects’ success in various ways.

When and How to Do a 2nd and 3rd Tier Consulting Firms Integration

It can be quite beneficial to leverage 2nd, and 3rd Tier Consulting Firms (small to mid-sized) to decrease the average costs and cover the niche and/or very operational needs from your business lines, and help you get control of the Tail Spend while optimizing the ROI.
Pitfall – Do not miss out on identifying specialized niche providers who can deliver excellent performance at lower rates, that other general providers won’t.

Your Consulting Procurement Process

 “If you can’t describe what you are doing as a process, you don’t know what you are doing.” – W.Edwards Deming

To set the process on the right track, you can start with RFPs. They are an amazing tool for buying Consulting Services. You should always write an RFP, even a simplified one. Why? Because it sets expectations like the scope and the deliverables.
In that specific case, writing an efficient RFP will maximize not only the performance of the procurement but also the chances of success of the project.
You might also want to segment the projects based on the size, the strategic importance, the potential impact and/or the complexity to define what will be the process: RFI or not, simplified RFP or not, competition or not, procurement support or not.
Pitfall – Make sure you leave room in your RFP to the Consulting Firm to bring innovative ideas and approaches. Lack of clarity in your expectations and the criteria of evaluation in the RFP, might not produce the best proposals.
And as a final piece of advice, once you have identified your preferred Consulting Firm, do not forget to formalize the agreed expected deliverables, terms and conditions in a separate Statement of Work (SoW)

How does your Procurement Strategy look like?
Do you want to learn about how to get started or just want to discuss further Procurement Strategy.
Do not hesitate to contact us today.
We’d love to hear from you!
 

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  • Know the Consulting Category
  • Source Consultants
  • Optimize your Consulting Spend
  • Create Value Through Consulting
  • Leverage disruption to create more value through Consulting

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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. 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.

4 Practical Strategies to put your Consulting Spend back on tracks

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. 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.

How to Best Define Your Procurement Strategy: Pillars & Pitfalls

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. 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.

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