Successfully Managing the Consulting Sourcing Process (2023)

November 10, 2023

In the world of business, managing the consulting sourcing process is often seen as a daunting endeavor, an intricate puzzle, a labyrinth of complexities. But we’re here to change that perception and reassure you that “managing the consulting sourcing process” need not be a phrase that induces eye rolls and exasperated sighs.

“Eighty-five percent of the reasons for failure are deficiencies in the systems and process rather than the employee. The role of management is to change the process rather than badgering individuals to do better.” – W. Edwards Deming

This process can be approached with simplicity, clarity, and confidence. And this comprehensive guide is your recipe for success, with a pinch of preparation and a spoonful of smart strategy.

We are here to show you that the consulting sourcing process can be not only manageable but as smooth as a baby’s bottom. More importantly, it can be incredibly efficient, expertly steering you away from the common pitfalls and straight towards achieving your consulting goals.

So, let’s embark on this journey together and transform your approach to “managing the consulting sourcing process” from a dreaded task into a well-executed strategy.

Successfully Managing the Consulting Sourcing Process

The steps involved in managing the consulting sourcing process are very similar than any other category. And in this comprehensive guide, we will be having a closer look at the most value-creating steps. So, let’s get started!

How to source a consulting project

#1. Define Your Needs

Defining the scope of your project is a compulsory step in the RFP process. You need to gather a team made of the major stakeholders and agree on the project’s expected results, timeline, and budget.

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.

Get Them Excited

If you decide to work with consultants, you are interested in their analytical skills, expertise, or 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 move down on their priority list. And it might not be “good news” in regards to quality and expertise.

If you are looking for another pair of arms or data crunching, you might prefer freelance platforms such as CoMatch, Catalent, TalMix, or even networks like Eden McCallum. You will find bright individuals ready to take on very small projects or interim work.

Take Your Time (When You Can)

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 sure 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 give you a ballpark on how much you are ready to pay for that project.

Formalize the Elements in a Request for Proposal

Many RFPs for consulting are rushed in their development. Sometimes the details or the context are insufficient to understand the business problem you are facing. Maybe some key requirements are missing, or the language is ambiguous.

You also might have omitted the common pricing framework to be followed or given too little time for the candidate consultants to respond to the RFI/RFP. However, the result is always the same: it is difficult for consulting firms to send a solid proposal, particularly newcomers.

The RFP will be the reference document for the consulting providers you invite to the competition. Don’t forget to include elements on the RFP process such as timeline, criteria of choice, and requirements. It will help the candidates to be laser-focused on their needs.

“Don’t tell me where your priorities are. Show me where you spend your money, and I’ll tell you what they are.” – James W. Frick

Improve your consulting sourcing process

 #2. Find the Right Consultants

With your RFP in hand, you can start identifying the potential candidates.

Adapt Your Short-list to the Project

Look closely at the scope of the project, the budget, and the internal procurement policies to define your selection criteria for the short-list. Be mindful of your time and adapt the length of your short-list to the level of priority and the budget of your project.

When you have a very tight timeline or for small projects with limited impact on your business, choose a small short-list so that you can spend enough time on the proposal and checking references. We recommend not going beyond three prospective providers.

For larger projects, you can broaden the first round (briefing/proposal phase) to up to ten consulting firms (depending on the project and the stakes) but keep at most four-five companies for the final round (pitching phase).

When your short-list is ready, contact your suppliers and check their interest by sending your RFP.

Secure Confidentiality

It is always important to protect your confidential information. Don’t hesitate to make your candidates sign a confidentiality agreement at the beginning (even at RFI or RFP stage) to protect proprietary information and make sure the consulting firms will not be sharing your project’s details with your competitors.

If the proposal includes collaboration and sub-contracting, make sure that an NDA legally binds all the contributors on the project.

If your project is particularly confidential, you should even consider working with a third-party sourcing company, like Consulting Quest, that will handle the process anonymously. They will keep your company and your project confidential until the short-list stage.

Keep it Simple

Unless you are handling a multi-million-dollar project, don’t organize extravagant tenders. Looking through proposals and listening to consultants’ pitches can be extremely time-consuming. It will also considerably slow down your project. Make sure that your RFP process is adapted to the scope and the budget for your project.

If you only have a small number of consulting firms, or if the project is specifically complex, you might want to organize briefings to discuss the details of the project and make sure the consultants have well understood what is at stake.

If you have a large number of candidates, a clear RFP, and little time on your hands, you can just send the RFP and assess the written proposals to identify the most promising one for the next step.

Consultants add value along 2 dimensions

#3. Assess the Written Proposals

Once you have received the proposals, take the time to review them with the other stakeholders. This is the next step in efficiently managing the consulting sourcing process.

Always keep your objective in mind: maximizing the chances of success of your project. You need the candidates to submit their best proposals, and for that, they need to understand the problem very well.

Level the ground, so all companies have a fair chance in the competition. It is in your best interest to do so. Don’t hesitate to explain in length the background of your company and the context of the assignment and to take some time to polish the Q&A documents.

Assess the Fit with your RFP

Make sure the candidates have responded to the most important elements in your RFP. Their proposals should help you answer the following questions:

  • Has the consultant understood our objectives?
  • Do the deliverables answer our questions?
  • Do we trust the approach the consulting provider proposes?
  • Does the team have the required experience?
  • Is this consultant the right fit for us?
  • Does the budget fit the value we expect?

Note if there are any gray areas and potential misunderstandings.

Identify the Most Promising Proposals

When working on a large cohort of consulting providers, you should focus first on the most promising proposals to save time and energy. You can always go down your list if you are not satisfied with your first batch.

Start ranking your proposals based on your assessment of the proposals. You can use these five dimensions: objectives, deliverables, approach, experience, fit, and budget.

You should also put your finger on the uncertainties in the proposals and articulate them into questions. The list of questions will be the basis for the pitch session with the most promising consultants: an excellent opportunity to clarify the RFP if necessary and assess the fit with your teams.

Do I Always Need An RFP

#4. Select Your Ideal Consultant

Also keep in mind that the best consultants in delivery are not always the best in sales, and vice versa. Rather than placing too much emphasis on how consultants look on paper, give them a chance to convince you and organize a meeting where they can pitch their proposal.

READ MORE: 7 Ways to Always Work with the Best Consultants – A Definitive Guide (2023)

Define Your Selection Criteria and Your Budget

The first step is to build a set of criteria. Start with the dimensions you had defined in the RFP, and add the elements that may not be included in the RFP, such as price, cultural fit, intimacy, etc. Once you have agreed on the dimensions, start prioritizing them.

You should also agree on how much value you expect from the project and how much you are willing to pay. The price is a major parameter in the choice. You should always make sure that your project has a positive value for money.

In that part of the process, we recommend working with the different stakeholders to get the buy-in and prepare the start of the project with a compromise.

Ask for a Presentation

It is extremely difficult (if not impossible) to assess the chemistry between a given consultant and your teams on paper. When you invite consulting firms to pitch their proposals, you get the opportunity to sense the human element in their approach.

During the presentations, you will need to keep several goals in mind:

  • Challenge the core proposal
  • Make sure the team on the field has the right expertise
  • Understand the pricing
  • Assess the chemistry with your teams

After the presentation, give the consultants a few days to revise their proposals. If you haven’t done it already, now is the right time to check the references of the consulting firm and the partners in charge.

Make Your Final Decision

Go back to your list of criteria with the order of priorities. Allocate a weight to each criterion, and start grading each proposal on the different dimensions. Once you are done, you can calculate an overall score.

Last but not least, try to build a consensus score with the main stakeholders. Sourcing a consulting provider is just one requisite in the success of your project. Another requisite is to get the buy-in of the stakeholders.

When building consensus around the choice of the consulting firm, you are working to ease the way forward for the project and the consulting team.

Find the Right Consultant

#5. Negotiate a Consulting Agreement

Once you have identified the most promising proposal, the next step in managing the consulting sourcing process is all about negotiating. Like the selection process, you need to gather as much information as possible to leverage during the negotiation.

Prepare for Your Negotiation

Before you dive into the key elements, take the time to prepare for your negotiation. The first step is to agree on what you want to negotiate. With intangible services, almost all the components of proposals are negotiable. You can modify anything from scope to team composition to, of course, price.

You also need to keep in mind the overall value of the project vs. the price. Understanding the dynamics of the pay-off matrix will help you define the needed magnitude of the negotiation.

Now, look also at how much latitude you will have in the negotiation. Do you have a negotiation edge? Or are your hands more or less tied?

Finally, get the right people at the table based on the size and the strategic importance of the project.

Try to anticipate as much as possible how the consultants will act to get the best deal. In this situation, the best deal is when both parties have a positive outcome.

Negotiate the Key Elements

When you enter a negotiation with multiple dimensions, the best alternative to a negotiated agreement (BATNA) and zone of possible agreement (ZOPA) concepts can come in handy. They will allow you to draw a bundle of potential deals along the different dimensions.

To build this bundle, you will need to analyze how the changes in scope or team staffing will impact the price and, conversely, identify the trade-offs you are willing to accept. If you still need to reduce costs, you should explore other savings opportunities, such as travel expenses or expert staffing.

How To Negotiate with Consultants

Give Feedback to the Unhappy Consultants

Don’t forget to debrief the consultants who lost the project bidding. Take the time to explain why they didn’t get the project and what they could have done differently. It will help them improve their proposals for your next project or their next client.

You can also ask these consultants to give you some feedback on your project as well. This can bring you valuable insights into how your teams manage a consulting project and help you improve your practices.

#6. Draw the Contract

Once you have negotiated the terms of the agreement, you can start drawing the contract. You can either work with a standard consulting agreement or work with a master service agreement (MSA) plus a statement of work (SOW).

The latter solution is particularly interesting when you work with the same consulting providers regularly. We strongly recommend working with your legal team to develop your own agreement templates.

Formalize Your Expectations

Even if you work with a standard consulting agreement, the statement of work is the first element to include in the contract. It covers the scope of work and deliverables, the schedule and phasing, the governance and escalation procedure, and the expected outcomes and metrics.

The contract is always the reference in case of litigation. You want the consultants to commit to the results of the project, not the means.

Define the Terms & Conditions

When you have described what work will be done and how and when, it is time to define how the consultants will be paid, the schedule and the terms of payments should be clearly stated in the contract, even if you have opted for a flat fee.

If you work with hourly fees, flat fees, or performance-based fees, you should include the conditions to get paid and the potential safeguards to avoid derailment.

Clarify the Rules

Depending on the project and the company, some rules should be included in the agreement:

Confidentiality – This clause should always be involved in a consulting agreement. Many projects include confidential information about the company’s strategy or products.

Use of Third-Party – Many consulting firms work with subcontractors or partner with other firms on projects.

Intellectual Property – Monitor the information and the models developed during the project and clarify the ownership in the contract.

Client Policies (such as information management and safety) –The consultants should comply with any rules.

Conflict of Interest and Non-Compete – On some projects, you might want to ensure that the consultants won’t have any conflict of interest or won’t go and sell the methodology they developed for you to your competition.

Prepare for the Worst

As Lao Tzu said, “Anticipate the difficult by managing the easy.” You should integrate clauses that cover the most probable problems you might encounter if the project goes awry in your contract. Resolution of the issue if and when it occurs will be then much easier to manage.

Where to focus during the consulting sourcing process

#7. Manage a Consulting Project

When you are buying services, and in particular intangible services like consulting, the bulk of the work comes after the procurement process has ended. You have to monitor and manage the outcomes of the project, but also the project itself. Indeed, consulting projects very rarely play out as planned.

Get Organized to Manage Your Project

Managing a consulting project is first and foremost managing a project. The same principles apply. To maximize the chances of success of your project, you will need to manage these three elements:

Stakeholders – This is Project Management 101. Align the stakeholders to make sure they will support the project and collaborate with the project team and the consultants.

Project – You need to put in place the best practices for project management: define the work plan, clarify the roles and responsibilities, and place clear governance with a steering committee.

Change – Always obvious, but more often overlooked, change management is a key success factor for consulting projects. Anticipate resistance to change from the teams impacted by the project and define strategies to address each situation.

Monitor the Performance

Don’t wait until the end of the project to evaluate the performance and share your results with the consultants. The reasons for low performance can be multiple and simultaneous.

It could come from the consulting firm (capabilities, skills, experience, staffing, etc.) or your own teams (low priority, staffing, etc.). In any case, it is best to sit down with the consulting firm to discuss and understand the issue and find solutions together.

Manage the Contract

When you are working with consultants, you also have to enable a productive relationship. First, you will have to track the changes in the project that can touch scope, staffing, timeline, or unforeseen events.

When these changes are substantial, you should consider amending the contract. In any case, keep track of the changes in the minutes of the steering committees. For very large projects, you should consider organizing a formal mid-project review.

You can cover both the changes to the statement of work and the quality of the outcome. It should not prevent you from checking in regularly with the consulting firm to anticipate potential slips in the project scope and timeline and allow your provider to fix the problem.

Consider the consulting firm as your partner with a common objective: the success of your project. Be unbending on the quality of the outcomes. Give them feedback on their performance and visibility on payments.

#8. Wrap Up the Project

Now, the last stage in managing the consulting sourcing process effectively is all about wrapping up the project.

Anticipate and Prepare for When the Consultant Departs

Maybe you have prepared for the transition from the start (in other words, in your RFP) and included the transition plan and regular check-ins in the deliverables. If that’s not the case, make sure to prepare for when the consultant leaves.

Once you have decided what recommendations you will act on, you must organize how you will act. You should also consider the transfer of knowledge, in particular, if the project implemented a new organization or technology. You should define this plan with the consultant at hand.

Prepare the performance assessment for the consulting firm by gathering the information collected along with the project.

Don’t Hesitate to End the Contract

Sometimes consulting projects have to be closed earlier than expected. Many changes can happen between the moment you decide to work with consultants and the end of the consulting projects.

The context can change, as can the management team. If that’s the case, continuing the project as it is might be a loss of energy and money. Always find ways to adapt the scope to your needs and terminate the contract if you must, if the consequences will be acceptable.

Close the Project Cleanly

Whatever the reason for terminating the project early, don’t rush into it. Take the time to analyze the impact of the termination and the probability of success of another consulting project.

Prepare also what to communicate with your teams involved in the project. At that point, you should have paid the consulting provider based on delivery and accrued the budget until the end of the project.

Keep the last invoices on your desk until you are sure that the project is delivered in full. That will give you enough leverage to get back to finish the project.

When you think the project is closed and the invoices are approved for payment, you can take the time to debrief the consultants on their performance on the project.

Final Thought

Running a structured and highly effective sourcing process is essential to objectivize the selection of the best consultant and keep the project’s success in perspective.

Understanding the associated risks and the potential for savings at each step is key. Surprisingly, most executives lack a clear view of where to focus on creating the most value.

5 Takeaways for Busy Executives

  • Healthy competition is the best way to overcome asymmetrical information.
  • Set up a multifunctional team to make sure you get the right expertise at each step of the process.
  • Use selection criteria to support the selection of the right consultants for your needs.
  • Formalize your expectations into contractual terms.
  • Manage the project to transform the potential into real value for your organization.

🌟 Got Questions or Facing Challenges? 🌟

Don’t navigate this alone! Book your FREE consultation with us today, and let’s find solutions together.

Helene Laffitte

Hélène Laffitte is the CEO of Consulting Quest, a Global Performance-Driven Consulting Platform. With a blend of experience in Procurement and Consulting, Hélène is passionate about helping Companies create more value through Consulting. To find out more, visit the blog or contact her directly.

Questions? Challenges?

Book your FREE consultation now and find the solutions you’ve been searching for.

Load More

You May Also Like…

RFP for consulting made easy
RFP for Consulting Made Easy: The Definitive Guide (2024)

RFP for Consulting Made Easy: The Definitive Guide (2024)

Master the art of creating impactful RFPs for consulting services with our definitive guide. Learn to articulate your needs, set clear criteria, and engage effectively with consulting firms. Whether you're a seasoned pro or new to RFPs, our guide simplifies the process, helping you to craft requests that attract the right consultants and ensure the success of your projects.


Join our Consulting Sourcing Spark newsletter.

You’ll receive monthly fresh perspectives on anything and everything relevant to consulting procurement!

We promise to give you enough food for your grey cells and reasons aplenty to be excited!

We have received your message. Check your email to finalize your subscription!