Hello and welcome back to the final episode of our in-depth series on ‘How to Buy Consulting Services Like a Pro’ right here on ‘Smart Consulting Sourcing’, your go-to podcast for all things consulting procurement. If you’ve been with us throughout the series, give yourself a pat on the back. And if you’re just joining in, well, better late than ever, right?
Over recent weeks, we’ve journeyed together, climbing the peaks and navigating the valleys of the consulting procurement landscape. We’ve played detective, deciphering business needs; we’ve danced the waltz of consultancy matchmaking; and we’ve been project management ninjas, ensuring results were as sharp as our strategies.
Now, I hear the collective groan, ‘Helene, are you taking us down memory lane again?’ Ha, not exactly! While we won’t do last week’s usual recap, some sparkling gems from our adventure deserve an encore. Call it ‘Helene’s Greatest Hits’ if you will.
So, whether you’re an old hand in the consulting procurement game or you’re that eager beaver just getting your feet wet, these are your golden takeaways. Ready to have your minds refreshed and your notes enriched? Pens at the ready; let’s dive deep!
A Sneak Peek into the Complex World of Consulting Procurement
Alright, folks! As promised, it’s time to dive into ‘Helene’s Greatest Hits’ from our series. And the first track on the list? The mesmerizing maze of buying consulting services.
Consulting Diversity Extravaganza! Now, think of consulting as the kaleidoscope of the business world. Twist it once: industries and capabilities. Twist it again: footprint, culture, delivery model. So many dazzling patterns! Sure, we might have between 5,000 and 10,000 consulting firms (and that’s not counting those solo maestros out there), but the value propositions? Well, they’re practically countless. Not actually infinite, of course, because…well, math. But close enough!
The Enigma of Intangibility. Consulting isn’t like buying a fancy gadget where you can check the specs, run some tests, or measure its weight. It’s more like… purchasing bottled wisdom. You can’t measure ‘brain juice’ by the ounce. It’s elusive. So, while you can’t pop the lid off a consultant’s head to measure the exact quality of their thoughts, you sure do have to trust in their expertise.
Custom-Made Every Time. Wouldn’t it be lovely if consulting had a universal language, standard performance measures, or a shared taxonomy of services? But alas, it’s like ordering a bespoke suit every single time. No predefined sizes and no pre-set styles. Every time, it’s a fresh design from scratch. A tad exhausting? Absolutely! But oh, the results when it fits just right!
And finally, Human-to-Human Dynamics. Consulting is more than just business; it’s a relationship. It thrives on trust and connection. I often say that the success of a project is like a finely orchestrated dance. It’s not just about the steps but who you’re dancing with. The partner, the project manager – they’re the lead dancers setting the tempo.
There you have it! The intricate art and science of consulting procurement in a nutshell.
Missed our previous episode? No worries—catch it on major platforms like Spotify, Apple Podcast, and YouTube. For a deeper dive, head to consultingquest.com. Dive into our in-depth white papers, informative ebooks, and full transcripts of every podcast episode. While you’re exploring, do us a favor—share our podcast with colleagues and drop a review. Every piece of feedback is valuable to us. It pushes us to curate even better content for you. Let’s amplify the knowledge and continue our learning adventure side by side.
I’m also excited to share that we host hands-on workshops throughout the year! These sessions cover pivotal topics such as negotiating with consulting firms and crafting an effective RFP for consulting services. If you are eager to join us in one or more of these workshops, drop me a line at hcl@consultingquest.com.
Understanding Value in Consulting Procurement
Alright, time for a pop quiz! When I say ‘value’ in the context of the consulting procurement process, what pops into your head? Savings, right? Ding, ding, ding! That’s what most of my conversations gravitate toward too. But, oh, how that is just the tip of the iceberg.
Let’s shift our lens for a moment. Imagine we’re not just buying consulting; we’re investing in potential. Savings? Sure, it’s a lovely byproduct. But let’s not confine value to mere dollars saved. That’s like admiring the frame of a masterpiece painting and ignoring the art itself.
So, let’s dive a bit deeper, shall we? How does the procurement process truly contribute to the immense value generated by a consulting project? It’s like baking a cake. Sure, you want it to be cost-effective, but you also want it to taste exquisite, look appealing, and perhaps even evoke a sense of nostalgia.
In essence, the procurement process should ensure that the consulting partnership isn’t just efficient but also transformative, aligning perfectly with your business’s needs and vision. That is the real value.
So, next time someone mentions ‘value’ in consulting procurement, challenge them – and yourself – to think beyond the price tag. Because in the grand tapestry of business, true value weaves in more than just savings.
Stages of Consulting Procurement Processes Where Value Is Created
Now, envision for a moment your consulting project lifecycle as a road trip. Along the way, there are multiple pit stops – from demand management to project management. Each of these stops adds value to your journey.
But here’s the thing: Not all stops require an overnight stay. Some are just a quick stretch and refuel, while others might need a little more exploration.
You might think, given the intricate world of consulting procurement, that each step requires your undivided attention. In reality? Not quite. While each stage is crucial, they don’t all demand the same intensity. And here’s where it gets a tad challenging. The focus you give to consulting isn’t quite the same as other categories in your organization.
It’s about understanding where to invest your time most effectively. It’s not about diving deep into every single detail but rather ensuring you’re giving attention where it matters most.
Have you ever thought of consulting in the same way you might think of assets? Let’s dive into this analogy for a moment. When we talk about assets, we often think of tangible things – factories, machinery, stocks, and the likes. But consulting? It’s an intangible asset – and quite a powerful one at that.
Let’s break it down. Like a high-value asset, consulting holds potential for tremendous ROI. You’re not just buying advice or services. Instead, you’re investing in expertise, insights, and solutions that can reshape the trajectory of your organization.
And just as with assets, there’s a need for due diligence. You wouldn’t buy property without assessing its value, potential, and risks. Similarly, when procuring consulting services, it’s not just about who can do the job but who can truly add value, aligning perfectly with your business’s aspirations.
However, the beauty – and sometimes the complexity – of consulting as an asset is in its intangibility. It’s not something you can touch or see like a new office building or a stock certificate. But its impact? That can be seen and felt across an organization. Just as you nurture and manage assets to get the best returns, so should you approach consulting procurement. Be strategic, think long-term, and always watch the potential value it can unlock.
Comprehending Value at Each Stage of the Consulting Procurement Journey
Let’s dive into a crucial concept today: understanding value at every step of the consulting procurement process. To borrow from Mike Hawkins: ‘You don’t get results by focusing on results. You get results by focusing on the actions that produce results.’ Let’s break this down:
First up, Scoping. It’s like choosing the right hiking trail. Get it wrong, and you’ll waste time and resources on a path that doesn’t lead to your destination. Proper scoping can prevent a 50 to 100% cost overrun. Imagine setting out to acquire a company. If you lump all phases of acquisition into one consultant’s basket, you might miss leveraging niche expertise from various specialists. Segmenting the job is the key.
Next, Sourcing. This isn’t about just finding consultants; it’s about locating the right ones. Like finding the perfect blend of spices for your dish. Pitting consultants against each other? could save you 30 to 50%. But remember, genuine competition means everyone should get a Healthy competition chance to win, not just the incumbent
Then, the dance of Selecting & Negotiating. Picking the right consultant partner is akin to selecting the ideal dance partner – one misstep can change the outcome. Price negotiation, if done strategically post sourcing, can give savings up to 15%, and restructuring resources can add another 10% value.
Managing is where the rubber meets the road. What good’s a ship without a captain? Same goes for consulting projects. Without guidance, projects can lose momentum, leading to a waste of nearly all the project costs. A leader’s exit or the lack of stakeholder support can anchor a project to its starting point.
Measuring is ensuring you’re not just tossing coins into a wishing well, hoping for results. It’s astonishing how few companies truly assess their consultants’ performance. Not doing so could cost you 25-50% in project value. Always ensure your consultants are the right fit for the job, and don’t pay a premium for services that others could do better or more affordably.
Lastly, Focusing. It’s the art of directing attention to impactful projects, not just spraying resources everywhere. Think about it. By zeroing in on pivotal projects, you maximize value and curb unnecessary costs.
Creating Value in Consulting Procurement
Alright, listeners, now let’s dive a bit deeper. We’re about to explore value creation in consulting. It gets slightly technical, but it’s crucial if you’re aiming to maximize your consulting investments.
When evaluating the value derived from consulting, it’s essential to understand the underlying factors and processes. The simplest measure is the difference between your willingness to pay and the actual price paid. However, this can be subjective. A more tangible metric compares the actual cost to a reference or average cost from various bids, ensuring the full cost is considered.
Still, to account for effective scoping, which avoids unnecessary expenses, we should introduce the element of cost avoidance, ensuring you’re not overpaying for services broader than required. For companies anticipating a significant return on their consulting investment, we should add the expected return value plus the actual savings.
The most comprehensive measure integrates all these elements, weighing the project’s actual impact. This formula underscores the significance of demand management for determining expected returns, the importance of astute sourcing and negotiation for savings, and the role of precise scoping for cost avoidance. Proper consultant selection and management amplify the overall impact. In most scenarios, unless the expected returns are minimal, this impact becomes the defining factor in the value equation.
As we draw our discussion on value creation in consulting to a close, let’s take a moment to reflect on where our focus often lands. In many organizations, consulting procurement often rests on the shoulders of the executives requiring the services. While common, this approach predominantly zeroes in on the project’s scope and management. Yet, we’ve seen that integral parts of the process—like sourcing the best consultants and entering into beneficial negotiations—are frequently sidestepped, especially when there isn’t a critical mass to manage.
However, there’s a shifting paradigm on the horizon. Drawing a parallel from direct purchase strategies, mature procurement organizations have started to evaluate not just the immediate costs but the entire value equation in consulting. By doing this, they’re shifting the spotlight to emphasize the impact and the tangible value derived from consulting projects. These avant-garde organizations are also ushering in an era of demand management—ensuring that they channel their resources and efforts into projects that promise the highest value return.
The Key to Consulting Procurement Success: A Laser-Focused Approach with a Broadened Vision
So, what does this mean for the industry and for your organization? It means there’s an opportunity—a potential—to harness a dual approach: Select the projects that resonate with your company’s long-term vision, source the right consultants who align with your goals, and manage these projects meticulously to maximize their impact. And while doing all this, keeping an eagle eye on the savings ensures that the financial equilibrium is maintained.
Bill Gates once remarked, ‘My success, part of it certainly, is that I have focused in on a few things.’ In the realm of consulting procurement, this laser-focused approach, combined with a broadened vision of value creation, might be the key to unprecedented success. As we sign off today, I urge you to reflect on where your focus lies and how you can redirect it to drive maximum value.
Now there’s a crucial point I’d like everyone to carry forward. When pondering over the value derived from sourcing consulting projects, always remember: the real value is frequently encapsulated in the impact of the project itself, overshadowing mere savings achieved from the sourcing process. This becomes especially apparent when zeroing in on individual projects.
However, the horizon expands for those organizations regularly engaging with consultants and overseeing a repertoire of providers. Beyond the immediate project impact, myriad actions can weave in substantial value over time. Consider the introduction of a robust performance management system or the fine-tuning of demand management. Or perhaps, it’s about orchestrating perfect harmony between your overarching strategy and where you channel your consulting investments.
Wrapping Up
So as we conclude today, consider this: Beyond the immediate numbers and cost savings, it’s about seeing the bigger picture. It’s about understanding how each consulting engagement, each decision, aligns and paves the way for your organization’s grand vision. Let’s champion a holistic approach, appreciating not just the immediate savings but the long-term strategic value.
Gear up for another enlightening episode coming your way next week! We’ll be stripping down to the core and asking: What really defines consulting? In our next discussion, we’ll dive deep into the fundamentals – from its very definition to the mechanics of consulting. So, ensure you tune in for this illuminating session on Smart Consulting Sourcing.
Till then, stay safe and keep up the smart consulting sourcing game! Remember, if you have any questions or need guidance with your consulting procurement initiatives, I’m always game for a chat. Feel free to connect with me on LinkedIn or drop me an email.
Au revoir for now, and happy sourcing!
; 
