Consultancy Buyers’ Forum – why is buying strategic consultancy so hard?

The Consultancy Buyers' Forum has been active for less than a year but has made good progress. It was set up by the Management Consultancies Association (MCA) and Paul Vincent, a very experienced senior professional services category manager.  Their recent meeting was hosted by Anglo-American in London, and attended by around 60 people – the supply side (consulting firms) slightly outnumbering the buyers in the audience, but not by much.

We heard from Bruce Crane, Anglo American’s CPO, who came over very well, thoughtful and perceptive, as he gave his view of how to work with stakeholders in sensitive categories like consultancy.

We then had Paul Winter, CEO of strategy consulting firm Concerto Partners, who had asked half a dozen CEO friends to record short Smartphone videos around the topic of “why is buying strategic consultancy so difficult”?  That proved to be a great way of provoking thought, and a lot more interesting than the usual PowerPoint presentation!

Here are some of the comments we got from the CEOs:

  • Trust between consultant and client is so central to successful strategic consulting, and that’s difficult to build into statements of requirements or evaluation processes
  • It’s just difficult to tie down requirements for strategic consulting or sometimes even accurately diagnose the issues that you need to address
  • Defining success is difficult – the desired outcomes are often not clear as you start an assignment
  • It would be good to stipulate the outputs – but that’s sometimes hard. But too much focus on inputs devalues the project.
  • People aren't brave enough to challenge internal consensus so the danger is you engage “yes men”.
  • CEOs feel it that these issues are their domain – but want support. Can I trust the consulting firm partner to help me?
  • “Buying a person” is not easy. They need to understand you, have the right skills and be trusted – and the match to organizational culture is key.
  • The “trust” issue can also lead to the “using who we’re comfortable with” syndrome which may not give the best result.

After all this talk of "trust", I asked whether it was really just shorthand for “using my friend who I play golf with as my consultant at £6K a day”?

I was assured by senior providers in the audience that “this just doesn’t happen anymore”. I did admit at that point I was going back a few years to my unhappy experiences in this field -  as a CPO trying to influence my Board to get procurement involvement in the category!

But golf club jokes aside, that is a serious issue when procurement is trying to get traction in this area. There’s no doubt that trust and relationships at the most strategic end of the consulting spectrum is key. After all, the consultants might be advising on the future of the organisation, which inevitably means the personal future of the CEO and the Board as well.

Yet procurement, and indeed the wider organisation, should still be concerned about getting value for money from that consulting work. That doesn’t necessarily mean a low day rate of course, but it does mean some clarity on scope of work, deliverables, and a sense of fair price and value received.

So here is some advice for procurement people in this category, drawn from the meeting, with a bit of personal experience thrown in.

  • Tread carefully – do understand the sensitivity of the work in this area. That might restrict how widely you advertise or compete the work, for instance.
  • As always, early procurement involvement is helpful.
  • Don’t obsess about day rates. Value is what is ultimately important.
  • Make it clear that it is not procurement’s job to choose the supplier, particularly if it is going to be a strongly “personal” piece of advice. The final selection must lie with the user / budget holder.
  • Procurement can add value however, through market knowledge, defining a robust but appropriate process,  setting appropriate terms and conditions (including incentivisation and risk transfer), and  governance.
  • But the user must be happy with the actual choice of firm / consultant.

And we've got more from the recent Consultancy Buyers’ Forum event to come soon.

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