Hello and welcome to episode 23 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 explain about how to make sure your consulting spend is supporting your strategy
Last week, I have invited Laurent Thomas, my coauthor of Smart Consulting Sourcing, to discuss about what is disruption in consulting.
We saw that disruption is pretty much everywhere. Consulting and procurement included. And that means that there are opportunities to work with consultants to take advantage or react to the disruption in your industry.
But it also means that there are opportunities within procurement and consulting to create more value as well. And your company strategy should integrate some of these opportunities.
So this week, I wanted to chat about how your consulting spend should support your strategy.
What is consulting strategy?
You can find plenty of definitions for Strategy in the literature. The definition we will use here is the one provided by Michael Porter in the HBR in 1996 :
Strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage relative to the competition and the expected financial returns.
Having a consulting strategy is about aligning your consulting budget with your strategic priorities to accelerate the execution of your strategy. With some logic and discipline in execution, you might be quite surprised by how much you can achieve.
So where do you get started? Well, like often, you have to look back to understand where you stand. How many projects you launched in the last 12 months were directly supporting your strategy?
Were your projects strategic?
You can have two types of strategic projects:
– Core Strategy
This project is supporting a core strategic workstream that will directly advance the long-term vision of the company. Projects enabling strategic projects also fall in this category.
For instance, your company has decided to implement a customer-centric organization.
– Strategic Adaptation
This project is needed to adapt to an issue or a new regulation.
For instance, a country is issuing a new regulation in your industry and you have 2 years to be compliant.
If you have a significant amount of non-strategic projects, or if you have larger non-strategic projects, take the time to ask yourself the following questions:
- Why did we hire consultants on that specific project?
- What was the decision-making process?
- Was the project necessary?
- What was the return on investment?
Are your efforts congruent?
Are your actions all serving the same purpose and therefore reinforcing each other?
- Make sure you have mapped the key activities to execute your strategy and that you are not leaving some key pieces on the side.
- Review on a regular basis the allocation of your resources and particularly the utilization of your consulting budget.
Is your sequencing optimal?
Take another look at the projects you launched last year.
- – Did you launch the projects at the right time?
– Were all projects high priority?
– Did you break down the projects in relevant phases?
– Were there phases that could have been launched later?
– Did you evaluate the interdependencies with other activities or projects in your sequencing/timing of the project?
– Were you able to self-fund some of your projects?
– Did your projects integrate quick gains to facilitate change?
Define a consulting strategy
Now that you have this overview of where you stand, you can start moving forward: define a consulting strategy.
- Translate your high-level priorities into clusters and define what resources you want to allocate to each cluster.
- Identify the potential projects and determine the contribution to each of your clusters.
- Define priorities, smartly sequence your projects, manage interdependencies, and run a make-or-buy assessment
A few remarks now:
- Note that the goal of this exercise is not to take over decision-making. The business lines need to keep control over their consulting spend.
- You are here to make sure that they get the most value from consulting by implementing the right best practices.
- You need to have implemented some degree of centralization of the consulting spend
- You need to have RFP described for most projects
That’s it for today. Next time, I’ll answer the question: “Should we freeze our consulting spend during a crisis?”
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 email@example.com
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!