Consultancy is a different type of purchase to almost every other area of spend, and people will invariably have a different perception of what good looks like depending on the role that they play or the experiences that they have. Before we drill into the four primary steps in the buying process it would be worthwhile highlighting some key points about consulting expenditure generally:
- It is highly unlikely that there will be single owners for consultancy spend within an organisation. There may well be someone centrally who has ultimate financial authority but project responsibility and accountability will be dispersed across a number of stakeholders.
- The need for consulting services is not always identified and budgeted for at the beginning of a financial year. Often the need is in response to a particular business situation, for example an efficiency problem or a new market opportunity.
- The consultancy marketplace is dynamic and firms renowned for a particular specialism(s) at a point in time may suddenly lose that capability if key individuals were to move elsewhere. This is especially pertinent if buying organisations engage service providers via a Preferred Supplier List (PSL) approach. A PSL can quickly become outdated if the capability and capacity of the organisations on the list are not actively monitored.
- It is essential that consultancy buying decisions are based upon delivered business outcomes, rather than the cost of effort. There are many variables which influence how a consulting project is costed and it is important that clients and procurement professionals know the right questions to ask and that they realistically compare the alternatives available.
- The scope of work in many consulting projects is difficult to articulate on paper and real clarity emerges out of questioning and discussion. Buying organisations should be wary of using a rigidly documented RfP process to select a service provider because often they will be merely judging how successfully a consulting firm has guessed how they will achieve the stated objectives.
Enlightened consultancy buyers will be doing all they can to maximise the value of achievable outcomes. This portal is intended to demystify the consultancy purchasing process and clearly show buyers, irrespective of their organisational role, how best to realise that value. Let’s now hone in on the four key steps.