Consultants

by Peter Parkes

Common questions

  1. What is a consultant?
  2. What’s the difference between a consultant and a contractor?
  3. When shouldn’t I use a consultant?
  4. How do I select and buy a consultant?
  5. How should I manage consultants?
  6. What are ‘the big four’, and should I just use those to be safe?
  7. How much do they cost?
  8. Where can I get help with managing consultancy projects?
  9. What are the main pitfalls in engaging consultants?

 

1. What is a consultant?

A consultant is a skilled external resource brought in to

  • Give an outside-in view of the organisation and help with development of strategy
  • Provide skills that are not available in house
  • Provide external knowledge, garnered from working on similar projects elsewhere
  • Provide temporary skilled resource to help deliver defined projects.

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2. What’s the difference between a consultant and a contractor?

The gap between consultants and contractors (the latter being temporary resources used to supplement normal operations or project delivery) is becoming blurred. At least be clear what you need them for, which will help to determine whether you need a consultant or a contractor, or indeed whether you should recruit.

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3. When shouldn’t I use a consultant?

A consultant should not be used to supplement internal resources, as this is a very expensive option, though it was a common strategy when ‘downsizing’ and head count reductions were common.

  • A consultant should not be used as the scapegoat to give messages that the board has already decided.
  • Don’t use a consultant to do things that only management has the mandate to do.

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4. How do I select and buy a consultant?

There are six stages to the process of selecting and buying a consultant.

  1. Develop the business case – is there a justification for doing anything?
  2. Specify your requirement in terms of required outputs.
  3. Decide on your approach – would consultants reduce risk or would it be as well to do the task in house?
  4. Select your procurement process – can you just phone someone you know or do you need to advertise through the Official Journal of the European Union?
  5. Identify candidates – who has the best value proposition and references for your particular needs?
  6. Agree contract type – try to align their reward with your benefits (for example, through a fixed priced contract or shared risk and reward).

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5. How should I manage consultants?

  • To get off to a good start, align their reward with your required outcomes.
  • Delegate; don’t abdicate – if they fail, you are the one left with the mess.
  • Make them work with your internal team to facilitate two-way knowledge transfer.
  • Leave surprises for birthdays – make sure you are getting regular progress reports and that issues are not being hidden.
  • Don’t try to micro-manage them.

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6. What are ‘the big four’, and should I just use those to be safe?

The big four major accounting firms offer ‘Advisory Services’, which they cross-sell from their role in internal and external audit. No one wants to have the finger pointed at them as the person who picked an inefficient consultant, and some managers feel that they have more insulation from a failed project if they use a well-known name. On the other hand, if you aim to research and select the best possible resource to minimise the risk of failure in the first place, you will often find that you are drawn to niche consultancies that specialise in the sector and type of problem. Make an informed evaluation.

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7. How much do they cost?

The more important question is ‘how much are they worth?’ There should be a clear business case before you initiate any project, and ideally external resources will be on either a shared risk-and-reward or a fixed-price contract. Either way, the benefits should clearly outweigh the costs and the risks should be significantly reduced if you use consultants who can leverage their previous experience on similar projects (which will be the case if you have taken care over your selection).

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8. Where can I get help with managing consultancy projects?

Consultancy projects are no different from other projects – you are just bringing in specialised resources to reduce your risks in delivery. If you feel you need help, you could consider detailing a project or assignment manager to manage this for you, leaving you free to manage your normal operations. Some of the experienced people in niche consultancies act as meta-consultants; a meta-consultant is a type of ‘poacher turned gamekeeper’ who helps a client manage business-critical projects, either formally, as the client’s project manager, or as an advisor.

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9. What are the main pitfalls in engaging consultants?

Below are some of the comments you will typically hear when things go wrong. Hopefully, if you follow the advice in this topic, they won’t be heard from you!

  • We were sold a generic model that didn’t fit our business.
  • The project dragged on for ever and cost us a fortune.
  • We paid top dollar, but only saw young guys in suits.
  • They had burrowed into us like some kind of parasite.
  • The board were impressed, but the guys on the ground did not seem too happy with the consultants.
  • The advice seemed reasonable, but we were left on our own to implement it, and it never happened.

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