Hello readers! With this episode, we have reached the concluding part of the series, which is all about optimizing the ROI of your consulting spend with our 6-Lever tactics.
We’ve had some great discussions over the past few weeks, and today’s episode is an opportunity to take a recap of all the episodes so before we move on, let’s take one more dive into how to make sure you’re getting total value for every cent spent on external consulting services!
Let’s quickly recap last week’s episode as we wrap up this incredible journey together.
Before diving headfirst into my final summary of the series, buckle up tight because here comes an unforgettable ride towards ultimate optimization bliss!
Last week we deeply explored how to get the most out of your consulting spend. We explored four essential areas for optimization; a) strategy, organization & governance, b) sourcing process, c) category management principles, and d) enablers.
First of all, to ensure maximum ROI, you need to focus on demand management, so your team’s goals and objectives align with organizational ambitions and effective processes when it comes time to source consultants. By taking control of every piece in this puzzle, you can ensure no opportunity is left behind!
Then, the sourcing process is key to any successful consulting project. To ensure a win-win situation for both parties, establish appropriate negotiations through strong RFPs and agreements like NDAs.
Leverage competition when needed, check references thoroughly and don’t forget the value of incentivizing suppliers! Consider small changes that could make a difference – such as performance fee structures or other mutually beneficial outcomes – they can add up in your favor over time.
Thirdly, by following category management principles, you can ensure every dollar is well-invested. Spend analysis and market knowledge are essential for understanding cost breakdowns and pricing strategies.
Lastly, coming to the enablers, keeping an eye on supplier performance through measures like project impact level, expertise or preferred suppliers will ensure that relationships match up with needs of your company. And if all that isn’t enough yet – platforms and tools, teams’ processes, and performance metrics exist to help optimize procurement further – success should be within reach in no time!
Now, on to Our Current Episode – A Summary of All Our Tips, Tricks and Advices Shared Throughout the 6-Levers Series
Those following this series from the beginning already know that this episode is intended to help audience members make informed decisions on their consulting spend.
So, Smart Consulting Podcast is on a mission to turn consulting clients into wiser and more informed buyers of consulting services.
The 6 levers approach can be used to optimize the ROI of your consulting spend, which we discussed throughout the entire series of the podcast.
First Thing First – Why Optimize?
Investing in consulting services is a big decision that can have lasting benefits or hefty costs. When companies take the time to optimize their expenditure, however, they stand to save 20-25%! Companies can create immediate value by engaging cost effective consultants and negotiating prices on projects while providing cushion for budget planning.
What’s more: executing properly managed spend yields return on investment (ROI) which puts money back into company coffers as well as increases EBITDA figures – not only helping with financial stability but further allowing businesses opportunities for growth such as socking away funds necessary for future strategy changes or development initiatives.
Managing your consultant budgets also helps build collaboration between team members, keeps supplier relationships healthy and reduces risks of project failure. Learning how to maximize ROI from spending could be just what the bottom line needs!
Have you ever wondered why some organizations miss out on great opportunities that could bring value? Companies often stick to first-in, first-out processes due to lack of resources and are unable maximize their ROI from consulting spend. On top of that, demand management is usually based on one threshold, which can result in missing small but highly strategic projects with high potential returns.
Even when it comes to category management, there’s a basic taxonomy system making it tricky for smaller players to get involved or diversify the supplier list – leaving many companies feeling stuck! But what if we took another look at these scenarios?
Companies must take a holistic approach when it comes to getting the most out of their consulting spend. They need to recognize that monitoring just big strategic projects isn’t enough and should also include baby steps like post-performance evaluations for simple engagements.
A successful ROI demands careful collaboration between procurement teams and business lines to grasp nuances specific areas of work require; RFPs with diligent accuracy; effective management of internal resources while taking costs into account – these are all essential pieces in creating an atmosphere which can produce meaningful results from investments made by businesses when working alongside consultants.
Establishing relationships with stakeholders and onboarding top brass executives who bring solid justification behind plans help pave the path towards success too!
To maximize your consulting spend, having best-in-class procurement is the key. But all too often, companies relegate it to a back-office function when in reality, it should be part and parcel of their corporate strategy.
These days, if used correctly by business leaders, procurement can help tap into new markets, unlocking innovation, and gaining that elusive competitive edge – paving the way for true ROI success!
Let’s Take Look at How These Six Levers Help to Achieve Optimum Value From Consulting Services
The First Lever Is to Invest in the Right Projects
Don’t just seize any opportunity that comes your way. You should recognize the value it brings to your company as a whole. When funds are tight, you must think carefully about which initiatives will have the most significant effect on what matters for your organization.
Second Lever: Selecting an Appropriate Delivery Model
After you have identified the priority projects, it is time to make decisions on how they will be delivered.
Before launching your project, determining the perfect approach should be your top priority. Generally speaking, making such decisions requires considering a make-or-buy strategy. This means that organizations must determine if internal resources are more suitable or external consultants are to be hired for desired results. This process needs to be speedy and cost-effective.
Third Lever: Keeping Your Costs Under Control for Optimal Success
Controlling costs should be your number one priority to guarantee that this process is not expensive and goes off without a hitch. Consulting can represent many indirect expenses, which are usually left unmanaged and spread out.
Nevertheless, when monitored effectively, it can lead to substantial savings! Thus, we have established our third lever: controlling your costs for optimal success.
But Return of Investment is not just about money but also the value and impact. To truly maximize your ROI, you must ensure these strategies are successful.
Fourth Lever: Securing Impact
Choosing the right consulting firm becomes even more critical as they can make or break a project. Yet this responsibility doesn’t fall solely on their shoulders – effective project management should be shared between both parties in order to guarantee each initiative results in progress towards larger objectives such as advancing your strategy or capturing savings.
If you want to make a real difference through your consulting projects, you need to secure the impact. You must define your needs clearly and choose the right consulting firm with the right expertise, experience, and cultural understanding. It can be a game changer to involve procurement early on in the process.
But let’s no forget about after the consulting agreement is signed. To ensure the success of your project, you must manage the project by putting in place efficient governance and evaluating performance, but also the change by aligning your consultants and stakeholders before starting the project, and making sure you anticipate the aftermaths of the project.
You cannot afford to skip any of these steps if you want to secure your consulting investment’s impact and optimize project success.
Fifth lever – Managing Your Suppliers
To maximize the impact of your suppliers, proper management is absolutely essential. Often, consulting services are purchased directly by end-users without procurement intervention until negotiation phase arrives. Procurement teams too frequently find themselves confined to administrative duties such as contract management and purchase order processing with little influence elsewhere in the process.
Businesses must ensure that the suppliers meet or exceed the buyers’ expectations in terms of quality, delivery, and cost. However, we often observe poor supplier management, which results in unreliable suppliers, disruptions, conflicts, dissatisfaction, and a lack of communication.
Sixth Lever – Sustaining Transformation
When these five levers have been checked, you need to ensure that the change sticks and make the change sustainable.
This final lever – sustaining the transformation by improving your Consulting Sourcing capability (skills, process and technology)- is as critical as any other transformational project. Without gaining buy-in from management – especially senior execs within the organization – progress will be slow or even non-existent.
Sustainability is key to achieving the coveted rewards of transformation, starting from leadership. When companies must determine how to prove the value and return on investment (ROI) regarding their consulting spend, this can be tricky terrain to navigate – oftentimes businesses are unwilling or unable to accept faults in current processes. However, by showing them where they fall short when sourcing consultants for stakeholders or business lines, there may be room for improvement that yields greater ROI.
Maximizing ROI of Consulting Spend through Collaboration and Procurement
Of course, there is no perfect solution, but procurement can help point you in the right direction. After all, you cannot deny that they are the specialists at buying.
The procurement starts by setting priorities. Where do you think you fail the most? Is it because you’ve no control over your cost? If that is the problem, you can start right there.
As businesses strive to improve their financial performance and meet strategic objectives, consulting spend is a great way to get there. But just throwing money at consultants won’t guarantee optimal return on investment (ROI).
To maximize ROI from your deployment of outside brainpower, you’ll need to focus your resources in the right direction, find cost-effective suppliers, set clear expectations for internal stakeholders – all while learning how to negotiate better rates with those same consultants.
The success of a company’s consulting investments all comes down to collaboration. Working together, procurement teams and business lines can ensure maximum return on their investment – potentially increasing ROI by 50%, reducing costs by 30% and creating an impact that goes beyond just the bottom line.
So don’t miss out – get started with optimizing the ROI of your consulting spend now!
Closing Thoughts: Use 6 Levers Approach to tap the full potential of procurement, in turn, unlocking innovation, competitive advantage, as well as to Optimize ROI on Consulting Spend
To sum up, we’ve discussed the value of managing spend to create immediate ROI and grow your business. Using cost effective consultants may help bring down prices while still providing cushions for budget planning.
Post-performance evaluations as well as collaboration between procurement teams and business lines are also key steps in getting maximum return from every initiative or project you invest in – not to mention being diligent with RFPs accuracy and actively managing projects whilst taking costs into account.
Procurement done right can open an entirely new world of possibilities. Utilizing a 6 levers approach is the way to tap its full potential and unlock innovation, competitive advantage, and maximum value from consulting services.
A successful journey starts with investing in meaningful projects while selecting delivery models that fit your needs along with cost-controlling measures – all followed by sourcing top-notch firms and managing suppliers carefully during execution, leading to sustaining transformation through continual improvement cycles after that.
In conclusion, employing good procurement practices should be crucial for success and an integral part of any corporate strategy in the future!
But hold on! We only completed one series out of the many yet to come. We’re only just getting started. There’s still so much more in store!
Get ready for next week – we’re starting an exciting series on buying consulting services! We’ll tackle the value of consultants, tips for writing RFPs, negotiating advice and more.
Whether you’re in procurement or leading a project directly as an executive, this information will give you all the tools needed to buy smartly and confidently with any consultancy engagements. Don’t miss it!
Till then, stay safe and if you have any questions regarding our 6-Levers series or anything consulting procurement-related, remember you can always contact me directly on LinkedIn or by email because I am always game for a chat.
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Happy Sourcing!
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