Hello and welcome to episode 34 of our podcast: Smart Consulting Sourcing, THE podcast about Consulting Procurement.
My name is Hélène, and I’ll be your host today.
Each week I’ll give you the keys to better use, manage and source consulting services. This week, I’ll discuss how to measure Consulting Performance
Last week, we had a chat with Marc where we talked about Buying Consultancy: A consultant’s perspective.
We saw that onboarding and developing your consulting providers was helping get them more ready and more successful with their projects with your internal clients.
And the cherry on the cake, always having on hand a list of potential providers will help you take control of the tail.
But this week I wanted to touch upon probably the most difficult subject in consulting sourcing: measuring consulting performance
Let’s start with the question –
How important is measuring Consulting Performance?
For Consultants – as long as their clients keep buying the services, measuring and analyzing performance is not that important. But for Clients, it’s a very necessary part of the process of acquiring such services and getting the best ROI.
If we take a look at the Automotive industry, for example, the ultimate price will be losing the business of the client. In most procurement categories, the receipt and inspection of the purchased goods is a key step in the process. When the product is damaged or not compliant with the requirements, it will be rejected.
When the product is compliant, but the quality is not satisfying, the provider’s contract will not be renewed. When a supplier is the subject of numerous claims it will be removed from the panel.
But here are the shocking facts:
- 57% of companies don’t have a systematic Performance Evaluation system for the Consulting Category.
- Consulting firms also don’t necessarily have a reliable system for measuring clients’ satisfaction. They realize the client was unhappy when they lose the account.
Why don’t we measure consulting performance?
Which is often unfortunate, and doesn’t help either party. Open conversation and feedback are the first steps. But why is it often obstructed? Consulting Firms are looking for feedback to engage in a continuous improvement process, and their clients are expecting them to listen and improve their ways of working.
There are a few reasons that prevent collaboration. Consulting Services are seen as hard to measure, intangible, and measurement can be tricky.
But companies know from experience that even intangible objectives can be measured. The best approach relies on a system. Since Peter Drucker has popularized Management by objectives in the 50s, it became a standard in General Management.
SMART objectives are used across the board to help employees have a clear understanding of their roles and responsibilities. The same can apply to Consulting Services. When you hire a Consulting Firm, you have some expectations such as the quality of the deliverables, the ability to understand your business, the ability to build trust with the stakeholders, etc.
Why not measure the achievement of these objectives? Implementing a systematic Performance Evaluation specific to Consulting Services is a cornerstone of the management of the Consulting Category.
What are the benefits of measuring performance in consulting?
The benefits of measuring can be seen at three time horizons.
The beginning of the implementation can be rocky. Being attentive to feedback from the main departments or business lines using consulting can help procurement to identify the Consulting Firm with performance issues and gather the necessary information to build the right improvement plan with them.
Tracking your providers’ consulting performance longitudinally is the only objective way to monitor the providers, benchmark their performance and identify the high and low performers: two essential elements to keep a fluid Preferred Supplier List. This analysis will also help you identify capabilities with insufficient performance.
The purpose of aligning your Consulting Spend with your Strategy is to maximize the Value for Money. Year-Long performance evaluation of the impact of your Consulting Projects will help you validate your decisions and make sure the money has been well spent with the expected impact in line.
Don’t forget that consulting Performance can be evaluated at all stages of a Consulting Assignment. And for every project time formats can be different.
As you can see there are many advantages to measuring consulting performance. Beyond the evidence, working only with the best, you can see that it will help you refine your sourcing process and align spend and strategy. You can transform a center of cost into a center of value creation.
That’s it for today. Next time, I’ll explain how to make sure you have an objective evaluation process of consulting proposals
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!
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