The consulting landscape today is rich and diverse, and while this is beneficial to Clients, it also represents a challenge and to maximize the chance of success for your project, you want to hire consultants who have the right knowledge and who understand your business.
On this week’s Smart consulting Sourcing podcast, Consulting Sourcing Expert Hélène Laffitte explains how to select the right consulting partner for your project?
Key Takeaway: In an ideal world, you would like consultants to have the right expertise, geographical coverage, and the availability to meet your project needs. But each company has a unique set of markers and a unique consulting “DNA profile”. Being able to draw this profile will allow you to understand the range of projects where this particular consulting firm brings more value.
Hello and welcome to the episode 44 of our podcast: Smart Consulting Sourcing, THE podcast about Consulting Procurement.
My name is Hélène, and I’ll be you host today.
Each week I’ll give you the keys to better use, manage and source consulting services.
This week, I’ll explain how to select the right consulting partner for your project
Last week, I explained How to Avoid Potential Problems in the Course of a Project
We saw that There are, unfortunately, no guarantees in life, so your best bet is to have a solid agreement and prepare yourself and your organization to deal with any unexpected problems that might arise during a consulting project. Just remember that all problems have a solution, and the better you plan ahead, the better the outcome will be.
But this week, let’s dive into how to select the right consulting firm for a project.
If there is a “secret sauce” to find the right provider, it probably lies in the combination of 8 key markers.
But before I talk about these key markers, let me establish the right foundation first.
That’s what I call the consulting “DNA profile” of a Consulting firm-
You know, the consulting landscape today is rich and diverse, and while this is beneficial to Clients, it also represents a challenge.
So the question to any business is that in order to create the best value versus cost, the Client should find the best provider that matches their needs and requirements.
To maximize the chance of success for your project, you want to hire consultants who have the right knowledge and who understand your business.
In an ideal world, you would like them to have the right expertise, geographical coverage, and the availability to meet your project needs.
In other words, you should look for consulting providers with the right consulting “DNA profile.”
Every project is different, and so is the RFP. However, there are some elements of a consultant’s profile that you will always need to screen. The best way is to review your RFP, where you should find most of the information, and discuss it with your colleagues to understand their expectations fully.
So what are the main markers to look for exactly?
First marker, Capabilities – Do they have the capability you need?
Understanding what capabilities will be used to deliver a project is very important. Besides, the way Consulting firms describe their offering is rarely in line with how their clients would describe them. They tend to describe what they do but not necessarily the problems they solve. They can also use technical jargon that their clients don’t always know.
For instance, a company will have its capabilities listed on their website: strategy, operations, and organization. For a seasoned consulting buyer, this description can be enough to understand what this consulting firm does. But for the average executive, it doesn’t mean much.
These three capabilities can be really broad. At first sight, we could say that this company is handling projects from high-level strategy down to operations excellence— that’s quite a program.
Let’s take the same consulting firm. Now the management has decided to revise their website and detail further their capabilities.
. Supply Chain Strategy
. Supply Chain Organization
. Distribution Strategy
. Asset & Working capital optimization
Now what they do is much clearer. Their previous description was accurate but too broad.
When the description of the capabilities is not clear, have a look at the case studies. That should help you narrow them down.
Marker number 2: Industry experience – This really matters.
Defining the industry experience you are looking for is an easier task. However, be careful to pick up the details of the context and the expected results to finely define what breadth and depth of knowledge you need. For instance, if you look at the Oil & Gas industry, you can be interested in the industry broadly, or maybe your project is about Upstream Operations, or even Exploration/Production, and more precisely about Well Stimulation.
When you look for a very niche expertise, you have to be quite thorough in your research.
Marker number 3: Footprint – Are they present where you need them?
The scope of your project can call for a global company or a company with offices in a given country. Consider the locations where the consulting firm will need to work, the languages they will need to speak, the cultures they need to understand. Think also about where and how the team should interact with the project leaders.
Let’s say you have a Lean project for a High Tech company based in Germany with factories in Korea, and in the U.S. You might want to find a company with offices and consultants in both countries. The travel expenses must be included too. When the consultant comes in from very far away, the additional costs can go up to 25-30% of your initial project amount.
Do you really need the consultants onsite? Can you leverage modern communication technologies? You have many options here.
Marker number 4 the Size of the Consulting firm – Is a brand or a boutique firm a better fit for you?
What are your policies regarding small firms or independent consultants? What is your timeline for the project? All those questions will help you to choose what consulting firms could work with you on a specific project.
Beyond the purely technical capability of a firm, you have to look at the ability to deliver that is linked to the resources.
Number 5 – Are you clear on the budget and the value you expect?
Knowing your budget is crucial to source your consultants. Consulting fees can vary from one firm to the next by a factor up to five. It is not a surprise that large Consulting firms will charge more than smaller ones. The size of a consulting firm is usually a decent proxy to estimate the consulting fees. If you have a tight budget, you will look into small local boutiques. If your budget is more accommodating, you can test several sizes of consulting firms.
Marker number 6– Next Credibility – How to decide quickly and objectively on that?
Credibility is usually established through 3 main channels: Brand, Thought Leadership, and Partner profile.
Let’s start with Brand – sometimes, you will need a brand Consultancy for your project. When your project has a board exposure, or when the value expected is largely political, you want to work with the large players. They will have the credibility at the highest level of the company and with your investors, and the shoulders large enough to roll with the punches if you need a scapegoat.
– Thought Leadership – companies with relevant thought leadership can bring you insights at the right level of expertise and on niche fields too. Let’s say that you are looking for deep expertise in multimodal transportation for process industries, for instance. Your teams are reluctant to work with consultants because they “know nothing.” You now bring a consultant who wrote a book, or several white papers, about network distribution optimization and multimodal transportation. There is a good chance that your teams will welcome this consultant.
Finally Partner Profile – another way to get the buy-in of your teams and your major stakeholders is to bring in consultants with the right profile. For instance, if you are working on building an intrapreneurial program to boost your innovation, you might like to look at innovation consulting firms with partners mixing entrepreneurial and corporate experience. When you want to optimize your tail spend without a lot of resources on your hands, working with consultants with a past in corporate procurement can be very efficient.
Market Number 7: Delivery Model – What are the deliverables?
How do you want to collaborate with your consultants? Do you want them to help you diagnose the problem or design your strategy? Or do you want them to support the implementation of your decisions? Consulting firms rarely excel at both. Besides, implementation consultants are usually less expensive than strategy consultants.
Another dimension to take into account is the hard vs. soft approach. Let’s imagine that you want to reorganize your procurement team and redesign the processes. Ask yourself what your priority is. Is it to get the buy-in of your existing teams? Are you looking for a collaborative approach? In that case, you need to look for a consultant with a high-sensibility to change. But if your main priority is to get the work done, then you will need a consultant who is more focused on the hard aspects of the project.
Finally, how senior do you need your consultants to be? If you want to professionalize your teams in the process, then you will need consultants that transfer knowledge. Hence, you want to work with senior consultants that have an on-field experience. If you are mainly interested in the results of the project, then you could work with younger consultants supervised by a more senior colleague.
Last but not least, Culture – Do you see any prospective challenges working with diverse teams?
Companies are becoming more and more global. Their teams are more ethnically, culturally, and linguistically diverse than ever. Beyond language, many elements of business life are different from one country to the next: management culture, business etiquette, communication preferences, you name it.
For example, when you have a highly-sensitive project in Asia, you might want to find consultants that understand the local culture and speak the language. Part of the consultants’ job is to establish trust with their clients’ teams. And it’s important to avoid any communication issues.
So you see, each company has a unique set of markers and a unique consulting “DNA profile”. And being able to draw this profile will allow you to understand the range of projects where this particular consulting firm brings more value.
Ultimately, this gives you the keys to choose the right consulting providers for your projects.
That’s it for today. Next time, I’ll explain How to Get the Best Performances from Your Consultants
In the meantime, if you have any questions, or want to learn more about what we do at consulting quest, just send me an email at firstname.lastname@example.org
You can also have a look at our website smartconsultingsourcing.com to know more about our book and download free templates & guides to improve your consulting sourcing.
Bye and see you next week! Au revoir!