Cometh the hour cometh the knowledgeable consultancy buyer
During the past 18 months I have had the privilege of looking at the consultancy spend category through a two-way mirror.
I have supported buyers who are trying to increase their organisational influence and consultancy service providers who want to work more effectively with procurement professionals.
The challenge in buying consultancy services is no longer news. A spate of books and articles on the subject has lamented the issues buyers face in trying to get to grips with management consultancy spend.
However, I am not convinced about some of the solutions these books propose.
I worry that if we expect to overcome these issues through a traditional procurement mindset [tell me your requirements earlier and I’ll get you the best contractual deal] then we are in danger of missing the point.
My point is that management consultancy buying is different because often there is no clear specification to buy against.
Unforeseen economic and business conditions appear. Operational or customer-related problems arrive. A short-term need to increase revenue or reduce cost emerges. Different stakeholders bear different political agendas and need different types of consultancy culture to solve their problems.
All these variable ingredients do not easily lend themselves to a traditional procurement mindset.
A more knowledgeable approach to these challenges will see buyers chiefly focused on required business outcomes, not the size of the savings opportunity.
They will appreciate that the sweet taste of negotiating that final percentage from someone’s fee could easily be soured if this then puts the project at risk because the ‘A’ team is no longer guaranteed.
Wouldn’t it be wonderful if buyers instinctively anticipated business needs, intuitively monitored the political landscape within their organisation, tuned into the urgency of their stakeholder requirements, proactively helped to shape the scope of work and recommended the best-fit supply options based on a deep understanding of consultancy market dynamics?
This approach is not easy to implement, it requires tenacity and perseverance and some buyers may need further training and development support as they start delivering it. After looking through my two-way mirror these past 18 months, I‘d say nothing else will make more of a positive impact on a buyer’s ability to add business value to their organisation.
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I’m not sure I understand the blog correctly, but if you can’t specify it, you shouldn’t be buying it, surely?
Management consultancy buying is different, sensitive and charged with very high expectations towards consultancy. Consultants are hired to come and do the job,whether it is to indroduce a change or to manage project.It is easy when we are looking for technical specifications and easily assessed expertise, it is not that straightforward if soft skills are of interest and this is where literature grows. I can see place and time for consultancy but am very sceptical as to its true value. My obervations of consultants at work are of ambiguous,non-homogeneous,emotional nature. Whether buyer is highly skilled in procuring this category or not, it is of a secondary nature. The crux of the matter lays somewhere else.
I couldnt agree with you more.
In our book we talk about the issue that the only quantifiable component is often the hourly rate, but there is no measure of quality, productivity or skill level required against which to measure consulting firms. Procurement processes that focus on the rate only will likely jeopardise the project. This is a whole new skill for most procurement department.
But on the other hand, even if purchasing remains in the hands of the user department, there is a lot they can learn by applying procurement principles – providing all suppliers with the same information, validating results against agreements, and paying upon “delivery”.