Buying Professional Services – Two Years On

Unbelievably, it is almost two years since the book what Fiona Czerniawska and I wrote (Morecambe and Wise reference for out older UK readers) was published by the Economist Books.  After a brief spike when it hit the Amazon top 10,000, at which point we were waiting for calls from Oprah and Richard & Judy (which never came), it settled back into the pack. Don’t write a business book thinking it will make you rich, is my advice, but it is very satisfying to see your work on the shelf in a real book shop.

But two years on from “Buying Professional Services – How to get value for money from consultants and other professional services providers”, have things changed in that area of procurement? Do we need to write a second edition?

Not really.

We haven’t seen a step change in the way procurement are engaging with consulting firms or legal services providers. In many organisations, procurement functions have continued to make a slow advance and increase influence over these categories, and in some cases are becoming more switched on to the specific needs of these areas.

But the providers often still perceive procurement as a negative force, and that can be both for selfish and more reasonable reasons. Some lawyers still take it as a personal insult that anyone – let alone a procurement person who knows nothing about their industry – should dare to question their rates, expenses, or output. Just a touch of arrogance there, you might think. In other cases though, the complaints are more justified. And three main areas still come up repeatedly in their comments.

1. Procurement using inappropriate processes, tendering documents, etc – stuff that might work for stationery but really doesn’t for complex professional services.

2. A lack of understanding of the difference between cost and value, which leads to the situation where procurement are happy to pay for 30 days at £800, but balk at 8 days at £3000 – even where the 8 days from the top flight professional would deliver seriously better results.

3.   The desire of procurement to take relationships out of the equation – now, we do understand the aim here, in the interests of independence and objectivity. But when it comes to professional services, the fact is you can’t totally separate the people and the work. Heavy handed tactics from procurement – “you’re not allowed to speak to our users” – is not the right way to handle this.

So we see only slow improvement in the overall picture, although there are definitely more skilled and specialist professional services category experts than there were when we started the book more than three years ago. But we’ve still got a long way to go as a profession, and we should remember that we don’t have a right to be involved in this – or any other category. We have to earn our seat at the table.

Anyway, to celebrate the second anniversary of the book, we’ve got some excerpts that we’ll feature here over the next couple of weeks. And it’s still available of course, here, at a ridiculously reasonable price.....

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First Voice

  1. RJ:

    By and large I agree with what you say here, Peter, but I think there are some signs of hope if the profession can actually grasp the opportunities that are still being presented by market conditions.

    The rise of second tier and regional providers in the legal services market (backed up now by the Legal Services Act), the debates over the oligopoly in the audit market and the general recognition by the “C-suite” that consultants need to be rewarded according to the value they deliver rather than daily rates are just some examples of factors that are driving radical and structural changes in the professional services landscape. All of this should play into the hands of professional buyers and I have seen a significant rise in senior execs’ level of interest in “what can Procurement do for me?” in this area.

    Sadly, though, I also still see too many buyers leaping in with the simplistic approach of let’s set up a PSL and tender on a rate card basis – job done!

    It’s a telling fact that, while headline rate cards have dropped by up to 30% in the last couple of years, the Management Consultancy Association still showed market growth running at 11% last year.

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