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The 12 Essential Elements Every Solid Agreement Should Cover- Part1

Let’s discuss first the importance of the Agreement when working with consultants, and the absolutely necessary elements that every good Agreement should have. You can customize these elements to fit your project better, and also use this as a template when you decide to do another Consulting project.

The 12 Essential Elements Every Solid Agreement Should Cover -Part 1

(on Managing Your Expectations, Defining the Scope of Work, Detailed Timeline, Governance Model, Escalation Process)

The Agreement formalizes in writing all the aspects discussed during the RFP process and the negotiations. During the first round of talks (and all the further ones), you should thoroughly review the contract and make all of your required changes to it. Also, insist the Consultant does the same. It’s advisable to develop your own Agreement, and you will see why.

The 12 Essential Elements in Your Consulting Agreement –

1. The 4 Main Dimensions a Consulting Agreement Usually Covers:

  • Statement of Work, what will be done during the project,
  • Terms and Conditions, what will be paid and how,
  • Rules for delivery, how the work will be done,
  • Deviation measures, what will be done if there is an issue.

“Most people spend more time and energy going around problems than in trying to solve them.” -Henry Ford

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2. Statement of Work -Define Your Expectations.-

The first step when drawing up the contract is to define the Statement of Work (SOW), or in other words, to lay out your expectations of the project.The goal of the SOW is to make sure the Consulting providers commit to the results and not the means. The elements stipulated in the contract will be the reference in case the performance is not at the level you expected.

The statement of work normally includes:

A/ SOW Main Points

  • Scope of Work and Deliverables,

  • Schedule and Phasing,

  • Governance and Escalation,

  • Expected outcome and Metrics.

When you are working with a frame contract or Master Service Agreement (MSA), the statement of work will serve as a Consulting Agreement. It will define the work to be done and the specific terms on the other dimensions. The rest of the terms will be covered in the MSA.

B/ Define the Scope of Work.

The scope of work will be very close to the scope defined in the RFP and adjusted along with the discussions with the Consulting providers.

For example:

“The Company has engaged the Consultant to provide services in connection with the Company’s Commercial Excellence Program. The Consultant will help to define the new organization for the Marketing function at the group and business unit level.

The expected deliverables associated with the project will be:

  • Diagnosis of the existing organization,

  • Future Organization recommendation,

  • Top-Down Impact Projection,

  • Organization Principes for the Marketing Function,

  • Future Organization by Business Unit,

  • Tailored implementation roadmap per Business Unit.”

You can also include the RFP and the proposal in the appendix of the contract to maintain an emphasis on the expected results for the project.

“The Consultant will help to define the new organization for the Marketing function at the group and business unit level as more particularly described in Appendix A (the “Services”).”

3. Specify the Timeline for the Project.-

The timeline should clarify and define the different deadlines, including the phasing, the milestones, and the schedule for the deliverables. Here is a good example:

“The Project will be organized intotwo phases:

Phase 1: High-Level diagnosis –To be delivered before the end of August 2019

  • Diagnosis of the existing organization,

  • Future Organization recommendation,

  • Top-Down Impact Projection,

Phase 2: Organization Design –to be delivered before the end of November 2019

  • Organization Principes forthe Marketing Function,

  • Future Organization by Business Unit,

  • Tailored implementation roadmap per Business Unit.

At the end of phase 1, the Company will decide the launch and the duration of phase 2.”You can also add the project schedule in the appendix as you did for the scope of work.”The Services shall be performed in accordance with the planning described in Appendix B (“The Planning”).”

4. Establish a Governance Model-

In your SOW, you should describe the governance of the project and, in particular, the escalation procedure. Clarify how the performance will be measured.

The SOW needs to specify the metrics to assess the success of the project. For intangible services like consulting, you can define SMART objectives that serve as a guideline to make sure the quality of delivery is there.

We have said several times that Consultants should commit to the results, not the means. However, in certain circumstances, the means can be of importance too. When you have chosen a specific Consulting firm for their team composition or the availability of a given expert, you can (and should) add your expectations in the contract.

For example: “When applicable, the consultant will maintain the composition of the team, as initially described in “The Team Composition,” for the period of the Agreement. In the event of a member of the team assigned to the project,for any reason,unable to pursue the goals of the project, he/she will be replaced with anotherconsultantof the same expertise at no additional fee. (added in “Appendix C”)”.

5. Set Escalation Process Guidelines-

All types of issues might arise in the course of a project, and it’s highly recommended that every organization has an Escalation Process protocol. In case your organization does not have one, here are a few tips you can implement.

When to escalate an issue? The short answer is when you see thatcritical problems are not addressed and promptly resolved. Critical problems include areas and activities that, if not completed, will delay a major project milestone, result in budget overruns, jeopardize the estimated due date for project delivery, break other commitments to Clients, for example, and various others.

As a project manager, it’s your responsibility to remove the obstacles teams might face that can lead to delays or inadequate deliverables. The issues should be documented and forwarded to the manager in charge, the project sponsor, and to higher management to address them; in other words, an Escalation Process should take place. Often there are tough decisions to be made, but escalation is a healthy part of the project’s life, and it generally benefits all the parties.

 

 

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.

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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Published in Source Consultants