Value is a subjective term. Whereas one person might buy a Ford Focus and feel they have got a good value car for the money, another might think the same if they buy a Jaguar or Aston Martin. It depends on the customer and their expectations. But one benefit with cars is that it is relatively easy to establish what they are worth.
The same can be said for most products people buy – even high-end IT systems normally come with tools to measure their ROI, making the decision making process a lot easier for the customer. But the world of consulting is very different.
Consultants, from management consultants to lawyers or PR agencies, sell their people and the knowledge and advice they can offer. And that can be a lot harder to measure. This puts the consultancy in the difficult position of having to find a way to justify that expenditure to their clients.
The role of a consultant is to add value to a piece of work – that is why clients turn to them rather than undertaking projects internally. Consultants have got ability to look at an organisation from the outside, without being affected by things like internal politics or reticence to change, and give impartial advice on its processes and procedures. This viewpoint enables them to see what changes the business can make to save time and money, as well as improve results. They can also introduce alternative ways of thinking and managing certain tasks on an ongoing basis, as well as providing general information and advice to the client.
Although it is clear to see how a consultancy can add value to a project, it can be a lot harder to demonstrate where it has achieved this or by how much. Many consultancies have adopted target-based contracts, where they are paid on the results they have achieved or on the effectiveness of the advice they have given. Some use deadlines to prove their value, so if they deliver a job in the agreed timescale they are seen to be working effectively and to the expected standard.
Another way for consultancies to prove the value they have added is based on the client’s financial results – if there has been a positive impact upon the bottom line or the pipeline has increased, then they have done a good job. However, finances can be impacted by many things that are outside the consultant’s control, which can make this a risky proposition for the consultancy in question.
As the pressure to prove worth increases, consultants also have to battle the issue of over-servicing. A consultancy is paid for its time - the client ‘buys’ a specified number of hours for a particular project. If the consultancy exceeds this time, the account is being over-serviced.
Unfortunately for the agency, this isn’t an uncommon situation. Many different factors can contribute to work requiring more time than originally planned. The first can occur before work has even started. Often the person responsible for selling in a project will be different to the one who will ultimately be responsible for managing it. If the handover between the two is not absolutely comprehensive, it can lead to information being missed and can result in problems when it comes to allocating resources and keeping to the estimated time and budget. Alternatively, in order to win the business, the seller may over-promise to the client, meaning over-servicing is almost inevitable.
These situations are more likely to happen on long-term projects, and if there isn’t good communication with the customer, they can even end up feeling that the consultancy has not delivered, when actually the reality is that the true timelines and costs were not properly communicated at the start of the job. This risks not only work being delayed or coming in over budget, but also a disgruntled client.
It is the responsibility of the project manager to be in control of the job at every stage to help prevent problems of this type. The client should be as involved as much as possible, especially after the handover to the project manager. Every step involved should be explained and demonstrated to the client in order to give them a better understanding of it - and therefore the time and costs involved.
The project manager is also responsible for ensuring that the correct resources have been allocated to the job. It is a fact that the difference between success and failure often be as simple as using staff with the right skills. Managers may use employees that they have worked with successfully on previous jobs, when in fact, they may not necessarily be the best person on this particular occasion. It is important to create a separate and individual approach to each job and client – the ideal would be a new team created for each assignment, dependent upon each person’s particular skills sets, in order to get the job done on time and to budget.
If consultancies take the time to prove that they want to understand their employees and their individual skills and aspirations, they will not only have a greater chance of success on projects through proper people management, they will also reinforce to the consultant the value they add to the organisation and how they are respected for their own abilities.
Traditionally, consultancies have used a disparate set of manual processes without a shared technology structure to manage their business, making it difficult to address all these issues. However, technology has evolved to combine all the administrative tasks into one tool, helping both the consultancy and the client. Software can monitor each and every element of the project, so that anybody working on that job can see immediately what the status is, virtually eliminating any possible areas of confusion or discrepancies. It also enables project managers to access data from previous job, which can help when planning a similar project in the future.
If used effectively, products of this type can help a consultancy solve the problem of how it proves its worth to clients, establishing before the job even starts how long it is likely to take and how the correct resources will be allocated – ultimately, allowing them to spend less time on administration and more on the project itself. Indeed, research has shown that 65 per cent of companies using such software were able to increase staff utilisation, resulting in a greater number of billable hours.
Consultants now have the ability to more easily then ever demonstrate the value they deliver and meet their targets, and can instead use their time and expertise to complete the project for which they are being paid.
