Paul V incent 31 st August 2016

Transcription

1 Buying consultancy services How to ensure best value Paul V incent 31 st August 2016

2 OBJECTIVES Understand the challenges inherent in buying consulting services effectively Appreciate what makes consulting services different to other types of purchase Understand the dynamics that are common to the way that organisations deploy, consume and sell consultancy services

3 Buying consultancy services IS different Price and value mean different things depending on the role that people play in the buying process/decision Business outcomes are not always clearly defined at the outset Relationships and trust are crucial success factors Beauty is very often in the eye of the [budget] holder

4 Buying consultancy services IS different The market place is dynamic and constantly evolving.

5 Buying consultancy services IS different Things are not always as they seem!

6 Confirmation bias is endemic The human tendency to interpret new information so that it becomes compatible with our existing theories, beliefs and convictions

7 How do consulting firms typically view procurement?

8 How do consulting firms typically view procurement?

9 How do consulting firms typically view procurement?

10 How do consulting firms typically view procurement?

11 TYPICAL PERCEPTIONS Procurement won t own the budget Procurement won t understand the business need Procurement won t know what good should look like Procurement will focus on price rather than value Procurement might give the work to someone else!

12 How do budget holders typically view the world?

13 How do procurement typically view the world? MY NEEDS! MY NEEDS! MY NEEDS! MY NEEDS! MY NEEDS! MY NEEDS!

14 How do procurement typically view the world?

15 How do procurement typically view the world?

16 The (very common) scenario It is 2:15pm on a Thursday After 6 weeks of intense discussions a consultancy firm has agreed the scope of work with their client, addressed all their issues/concerns and lined up their A team to start this coming Monday at 9am During discussions to date they have already reduced their original fee proposal by 20% Their client has just realised they need their internal procurement team to finalise the contract and issue it to them The client has made contact with someone in procurement and sent them across a selection of background documentation the starts with I know this is really short notice but please can you just This is the first time procurement have been made aware of this project and the consultancy firm now has to discuss their proposal with them

17 Don t you wish it could be different?

18 Understanding the landscape is critical INTERNAL CLIENT CONSULTING FIRM

19 Understanding the landscape is critical Business Context Market Forces Related Projects VALUE INTERNAL CLIENT CONSULTING FIRM Client Hierarchy Financial Approver Procurement

20 Understanding the landscape is critical I nternal Client Business Context Market Forces Client Hierarchy Financial Approv er Procurement Related Projects Consulting Firm Organisational Culture & Politics Challenges Opportunities Individual Knowledge Experience Credibility WHY WHAT WHO HOW WHERE WHEN

21 Understanding the flow of things Traditional (Preferred) Procurement Flow Internal Need Definition Procurement Sourcing Exercise Supply Market Negotiation/Contract Typical Consultancy Flow Consulting Firm Great Idea Internal Client Need/Budget Internal Client Need/Cost Consulting Firm Solution/Cost Procurement Formalise Deal/ Contract

22 and the game of snakes and ladders!

23 Consultancy firm snakes and ladders The person who claimed to have the budget and authority to engage them actually didn t; There was already something set up to fulfil the requirements but the person who asked them to pitch didn t know this; The requirement was a lot more involved than they were led to believe but the person who asked for their help didn t know what they didn t know; Their proposed commercial terms were non-standard and could not actually be agreed without special internal approval; They assumed that their main contact was smoothing the way for their engagement (as they said they would); They were asked to give a proposal for a requirement that turned out to be undefined (or budgeted for); They took on face value the suggestion that a freebie of some sort would be a guaranteed stepping stone to some definite work; They overestimated the strength of their executive contacts when push came to shove.

24 CHALLENGES How to deliver maximum value and build a positive platform for future work How to develop relationships with the ultimate decision makers and key influencers How to differentiate their propositions and sales messages How to qualify opportunities effectively to optimise the cost of sale

25 Defining Needs The 4 stage consultancy buying process Evaluating Performance Selecting & Engaging Suppliers Delivering Outcomes

26 Defining Needs What type of problem are you trying to solve? How deep is the expertise you are looking for? What type of experience are you short of? How important is the ability to bring to bear a different and independent perspective? What level of challenge do you want to bring to the organisation? What level of management will consulting firms be working with and needing to influence? How important is thought leadership the bringing of new insights or approaches?

27 Supplier Selection W hat are their core specialisms? Are they specialised in your particular business need? Are they considered to be market leading? On what criteria are they market leading? How long have they been a going concern? Who are their key people? W hat geography do they cover? How do they resource delivery/projects? What case studies/testimonials are they sharing? What might be their limitations?

28 Applying the right commercial model FIXED PRICE/FEE Know where you stand TIME & MATERIALS Provides flexibility CAPPED TIME & MATERIALS Provides certainty RISK & REWARD Drive value and share risk

29 Contracting effectively Why? Describe objective/reason for needing the consulting service(s) What? Describe the consulting service(s) required Who? Describe each party s role and responsibilities How? Describe the approach and expected standards of performance When? Where? Describe the period of performance Describe where the consulting service(s) will be provided

30 Delivering outcomes Evaluating performance Have we established clear expectations for delivery of the service? Have we incorporated a clear and flexible methodology to manage the contract and any necessary change(s)? Do we know how we are going to track and record all benefits? Was the work delivered to time? Did the outcome(s) represent value for money? Were the outcome(s) delivered to quality? Were the anticipated benefits delivered? Was the necessary level of knowledge transferred? Would we use this Vendor again?

31 What happens when you understand the landscape and key variables? Consulting Firm Great Idea Internal Client Need/Budget Procurement Facilitate Discussion/Deal & Contract Internal Client Need/Budget Consulting Firm Great Idea

32 When procurement professionals adopt a facilitative role it s a game changer INCLUSION They become an integral part of the end to end buying process They ensure procurement are involved at the right time They relate most positively with the supply market APPROACH They adequately protect corporate terms and conditions They ensure the business achieves best value for money They implement effective processes not unnecessary bureaucracy CONTRIBUTION They deliver real business value to internal stakeholders

33 A short story $1000

34 Further information resources

35 Further information resources

36 Experiential learning opportunity The Buying Consultancy Services Workshop October/November 2016 Insightful content, practical exercises and group discussion, including: Defining Consulting Needs Supplier Selection & Contracting Deliv ering Outcomes Ev aluating Performance Nav igating Roles and Responsibilities To find out more about and book your place visit straliaworkshops

37 QUESTIONS? Thank you for your time!