Obtaining access to high quality consultancy services can often be the crucial factor in the success of a project. But buying advice is also one of the most confusing challenges for procurement. How can we overcome this?
Despite some consolidation in the financial consultancy sector, the overall market for consultancy services continues to grow, with the global consulting market valued at $250 billion.
While technology consultancy is leading the continued growth curve, other sectors including HR, operations and strategy are making strong contributions to overall value. For those seeking consultancy services, the market however can be complex. Is there a way to simplify the complexity of procuring consultancy services?
Why are consultancy services so confusing for buyers?
Much has to do with the breadth and depth on offer. Consultancy services are available in just about every industry possible and the sector continues to grow. The broad reach and sheer volume of suppliers can make it difficult to identify the best consultant for your needs. Take ‘Digital Transformation’ consultancy services as an example. It was barely recognised a sector just a few years ago, now it’s worth over $23billion and represented over 15% of the global consultancy market last year.
Consultancy services are provided by organisations large and small,- from multinational organisations and specialist niche providers to freelance independent consultants – often with much crossover in between. Many of the companies started life offering a single specialism but have grown and added additional services to their portfolios as their sector and market experience has developed.
Consultants often use a variety of language and definitions to describe who they are and what they deliver. With no single regulatory body on board to help define the market, its no wonder that buyers can find drawing comparisons a challenge.
As procurement budgets decrease globally, the lack of resourcing and specialisms often means that in-house buyers are generalists not specialists. As a result they may not have the insights into specific markets to be able to evaluate different consultancies meaningfully.
As a professional buying organisation, ESPO’s recent experience in building its largest ever public sector consultancy services framework highlights just how crowded and complex the marketplace is. It received a record number of tenders from suppliers – evaluating over 240 tenders before awarding 135 to the framework. As part of the process ESPO found that the marketplace is so complex that public sector buyers often remain with the same consultancy provider for years to avoid going through the procurement process again, putting budgets at risk.
Top things to consider when buying consultancy services
Utilising a team of 12 procurement experts with cross sector experience drawn from across the organisation and externally, ESPO was able to effectively evaluate the tenders before awarding the successful organisations a place on the framework. Here are its top considerations for buying consultancy services:
- Closely define your outcomes or objectives. By identifying the outcomes, procurement teams can work backwards from the end goal to define the exact service required.
- Request case studies. This will help you understand the process for delivery and ensure that the consultant has the right experience.
- Review technical capabilities. Whether you’re buying financial, waste disposal or even logistical advice, ensure that the consultants are specialists with the technical capabilities needed to deliver. This may mean that you are required to use a different provider for each project.
- Consider using a specialist framework for complex service procurement needs. Framework providers operate under strict due diligence rules and processes so you’re assured of the suppliers’ capabilities.
Sheena Kocherhans is Category Manager for Professional Services at ESPO