In this episode, we will discuss the importance of selecting the right delivery model for your consulting project.
In the previous episode we explained our first lever which was Investing in the right consulting projects.
The objective was that the clients should consider the consultancy category wisely. If you consider it an investment rather than a required expenditure, you will select how to spend it wisely, early on.
You determine which initiatives you want to launch next year, which areas may require advisory assistance, and how much money you’ll need to implement your strategy.
You should, therefore, be able to grasp the sort of consulting businesses you require in terms of capabilities, pricing, geography, and so on, and compile a list of preferable suppliers. You should be able to tweak your budget from there to anticipate certain high-return initiatives or enablers.
With that in hand, you narrow your demand management criteria and ensure that you exclusively focus on.
Let’s Dive Into Today’s Topic, Which Is “Select The Right Delivery Model!”
Now that you have identified what projects are good for creating more strategic value to the organization, you need to get things up and running.
But before you even start your project, one of the first decisions that needs to be made is what approach will work best for delivering. There are three common alternatives: make-or buy strategy, hybrid model and hiring an external consultant/expert networks.
Now, while making the decision, organizations should not base their decisions merely on the availability of resources. They need to adopt a more value-based approach, they need to think which delivery model may bring them more value.
Before choosing any particular model, they must keep a few factors in mind such as the need for confidentiality, skill development, and compensation model among the others.
Delivery Model Options That You Could Choose From
A delivery model is not actually about the work itself, nor is it about the approach or the methodology. It’s more about what kind of setup you’ll use to deliver that project.
For instance, each project is different, but when it comes to a strategy project, you need to consider the transformations that the project aims to enable in this case, you need to start by breaking down the entire project into several smaller bits, which you can call “work streams”.
Such a classification not only helps to complete tasks more efficiently and with minimal frustration but also to identify skillset that is required for each task. This understanding, in turn, helps you to decide whether you are going to work with internal consultants or hybrid teams or external consultants.
Internal Consultants
Talking about the options that you could choose from, if you haven’t already set-up an internal consulting group, you might want to consider that option now. Because having an in-house consulting team without the help of an external consultant would add great value and save extra bucks for your company. Of course, you need identify the employees who could be worthy of handling the strategic project.
Take a look at one of our previous podcasts about internal vs external consultants and it’s all about what works best for your project, I’m not saying you should use internal consultants all the time but having them at your disposal might create value out of your consulting spend!
Hybrid Model
By Hybrid model, what we mean is, working with external consultants on a specific component, while using your internal teams for doing the rest, I’ll give you an example of this model.
So, in internal consulting team you could have people that are experts in their field. They can help you with the project on top of their daily works. Alternatively, you can have a dedicated team that works on such projects.
You could also leverage a Hybrid model, which consists of external consultants and internal people. You may have to invest in skill development for your internal consulting team. But for the hybrid model, you need to explore different compensation models and see which one is better for this project.
External Consultants
Now we are left with the last option, which is external consultant. You know, 20-25 years ago, anytime when an executive needed expertise or market intelligence or strategy advice, they would go to a consultant because that was the only way to get that. Even when they needed temporary workforce due to someone being absent on maternity leave, quitting the job, or being on sick leave, they would hire a consultant to help them do the work.
But now with the disruption of the industry, the consulting value chains exploding, though not in the sense destructive per say, but all those little pieces of the value chain are now accessible directly to clients.
For instance, suppose you are a strategy leader who is interested in a new market but does not know much about it. In the past, you might ask your consultant to conduct a study for you, saying, “I want to investigate that new market and see what potential there are for us.”
That’s exactly what you’d do. Why? Because most strategy leaders were full-time executives in a firm, but today strategy group members are frequently former consultants, so they know how to do it. Given that they have the basic knowledge, which is what the market is and what the market intelligence is, what do they do instead?
So, what are they going to do? Instead of hiring a consultant to complete the project. They only consider what they don’t know. That is market research. But do you know who was conducting market research for the consulting firms? Another company!
For example, there is one Indian company, called Value Serve. You go to them and just purchase a market intelligence report.
Such a report has everything that you need starting from market developments, how the market is categorized, and so on, and you will have business intelligence on competition and other participants in the game, so all of this is now available straight to executives who have some strategy acumen.
And then the company could do the rest of the project for themselves.
Other Options
Many individuals believe that consulting is genuinely a service that must be performed by someone else.
However, consulting is not a service in the traditional sense. It’s a way of doing things, and you can do it internally if you have the resources, you know all the right people, all the right talents, and all the appropriate resources.
Just like the market research, people also use micro-Consulting which can be just a small one hour meet with an expert over a dinner and then discuss your issue, ask certain questions that you want to be answered and get the solution. But the session will be only for an hour or so.
And then you have your temporary workforce.
Let me explain how this model is used. Suppose you have a project in hand and your internal consulting groups are short on resources for various reasons and they can’t afford to hire full time employees for extended period.
So, what did companies do before? They would hire consultants to do the work in the long run. Some consultants, for example, have been with the same client for three, four, or five years.
But today, you have other options. So, rather than working with consultants who charge a premium, you should look for temporary workforce, and there are now some platforms where you can do so.
SAP Fieldglass is one such platform. They assist you in managing your personnel.
They are only temporary addition to your workforce. There might be consultants, entry-level managers, or anything else. Individuals are mostly coming from those temporary agencies. And the plan is to avoid hiring a consultant, which will be more expensive. You hire somebody to work full-time for you for a set amount of time.
I’m not suggesting you have to use all of them. I’m not suggesting that some are superior than others. What I’m saying is that, every organization should thoroughly explore all of those choices and grow on a regular basis. There are rules or guidelines. In other words, you have to develop an overarching policy to select the right delivery model and then design an assessment tool for your teams that they can use for every project.
Choosing a Delivery Model Is Difficult but It Gets Easier with Make-Or-Buy Strategy
With all these options before you, it’s not easy to make a choice between internal and external consultants and that is why you need to use a make-or-buy strategy.
It’s nothing but a framework that includes five strategic components – understanding of project needs, centralization of the project, assessment of the externaliza-bility of the project, strategic value assessment, and externalization value assessment. We call them the Five pillars of a Make-or-Buy strategy Framework.
To solve the make or buy dilemma, you can start with answering these questions. like
- What are the key activities that can be outsourced?
- What does the pool of potential suppliers look like?
- How mature is the market for suppliers?
- What providers are appropriate for us? And
- Is it worth it to outsource a particular activity for the long term? These questions would help you get an idea about what is it that you’re looking forward to.
Plus, hiring external consultants may not always be the best solution. For example, consulting services that meet your needs may not be available in your industry or country.
On the other hand, leading an internal project can be tricky. The internal team may be unaware of the latest trends in the industry or capability. They may waste time reinventing already well-established improvement methodologies, resulting in longer projects and higher overall costs. Again, the fact that the team members are part of the company can make it difficult to disrupt the established order.
However, implementing a make-or-buy strategy requires some degree of centralization, and also increased collaboration between procurement business lines, strategy, finance, and human resources. But the value created can be really significant. Hence it makes sense to have your make-or-buy strategy in place. And remember that the framework needs to be in line not only with your Strategy but also with your organizational Culture.
In Conclusion,
So, to conclude today’s topic, companies should base their make-or-buy decisions not just on the availability of resources, but also on whatever delivery model would provide them the most value.
Every project is unique, but when it comes to strategy, you must evaluate the alterations that the project intends to enable. In this instance, you should begin by breaking down the overall project into smaller chunks called work streams.
but the delivery model is not actually about the work itself, it’s not about the approach or the methodology. It’s more about what kind of setup you’ll use to deliver on that project.
This type of classification aids not only in performing jobs more effectively and with less irritation, but also in recognizing the skill sets necessary for each activity – a crucial consideration when determining whether to work with internal consultants, hybrid teams, or external consultants.
A lot can depend on how much time or money an organization has available so they might choose between these options accordingly which means this choice could impact everything from cost effectiveness right down into who gets chosen as winner within contract negotiations.
I hope that you now know how to select the right delivery model for your consulting projects to create more value. Or you can just come and ask us, at Consulting Quest.
Keep an eye up for me next week when I return with our first lever topic.
Till then, stay safe and happy sourcing and if you have any questions regarding today’s topic, remember you can always contact me directly on LinkedIn or by email because I’m always game for a chat.
See you at the next episode. Till then, please stay safe and stay connected with us through our community on LinkedIn and follow our Twitter handle @ConsQuest.
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Happy Sourcing!
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