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Tip of the Month Archives
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Working With The Consultant
May 2005 In our April Tip, we discussed 11 reasons why you might hire a consultant and then what specific experience and expertise you should evaluate when you think you will engage. This month we will look at establishing the agreement and working with the consultant. A local consultant with international exporting experience can certainly help you prepare to work with international situations. The advantage you have will be proximity and a closer cultural understanding to your home situation. However, most consultancies in the Benelux and more and more in other countries that work with exporters and international distribution are fully adept in English and understand international (UK and US) business and professional concerns. The advantage they offer is their local in-country presence, knowledge and expertise. Most local consultancies are better connected to the local business environment and are able to find their way much faster than someone who is new in the area. Consulting capabilities vary — not so much by country or even size of the consultancy or professional fees — but by available expertise. You must know the specific individuals, their expertise and how well you feel with them. How Will The Information Transfer Occur? If the consultant must review business files and documents, can he or she produce a list of what he/she will need at the beginning of the engagement? If not, how much notice will be provided and who in your organisation will retrieve it. How, when and in what form will the consultant deliver the results to you? How will the consultant and your staff work together and communicate? What kind of support will the consultant require (space, equipment, secretarial or clerical)? Hold Face To Face Discussions During the meeting discuss qualifications and proposed methodology in detail. Try to understand the specific benefits your company will obtain from hiring a particular consultant. Pay attention to the chemistry – the personal relationship you and your colleagues develop with the individual(s) who will be handling the assignment. Understand who will actually be doing the work for you. Can you work together? You must assess the consultancy objectively as we recommend in this article. The best consultants will provide you with the appropriate information. Get It In Writing After the initial meeting with the consultant, ask for a written proposal that can become the contractual document. It cannot hurt to have your lawyer review the document to make certain the terms stated are fair to both parties and legally sound. Among specific items to be covered are: the type of services which will be provided; the timing of completion of these services (duration from start to stop and number of man-hours); the resources needed; the responsibilities of both parties; the cost of the services; how changing the scope of the project affects the project; and, the “out” clauses in case something goes wrong and the contract needs to be terminated. A typical proposal should cover five sections with annexes. Introduction: A summary of the qualifications of the consultant and preliminary analysis of the problem or opportunity facing the company. Consultancy details would be in an annex. Discussion: This section analyses the problem in depth and should demonstrate that the consultant has a good grasp of the company’s objectives. Proposed program: Services to be performed by the consultant are presented in detail in this chapter. The consultant should specify the scope of the work, methodology to be used, staff requirements, benchmarks for review of the progress, deliverables and project deadlines. There should also be strong benefit statements for the client (e.g. financial, organizational, customer (theirs), and learning benefits). Experience and qualifications: This section should include a brief background of the firm, its areas of expertise, résumés of principal consulting staff, and résumés of those who will be directly involved in the assignment. Estimated fees: Detailed explanation of all expenses that can reasonably be projected, variable expenses, and describe any emergency expenses that will be billed to the company. Appendices and exhibits: Any additional material that help explain how the consulting firm will solve the company’s problems are contained in the final section. Review Consultants’ Fees Like all company expenditures, the consulting project must be treated as an investment. Consulting fees should be measured against the expected return on the company’s investment of time, money and personnel. The higher the return that can be anticipated from the consultant’s proposal, the more justification there is for a larger fee. Consultants work under various fee arrangements — lump sum payment, hourly, daily or weekly fees or retainers. The method of payment should fit your needs and the particular project. Expect to pay for travel, lodging and incidental expenses for the consultant. These usually run from 15% to 30% of any project. For example, large consultancies typically charge higher fees. For small SME’s, these fees and the return do not usually fall within the expectations or the scope of the project. A better selection is to use small independent consultancies or individuals who are specialised in your area either by product and technology or by skill set e.g., consultants specialised in partner search, evaluation and selection or channel management. Fees vary. UK and Scandinavian fees are fairly high. Belgian fees (local Belgian companies) are generally much more reasonable. The Dutch are fairly efficient i.e., a firm fixed fee with specific deliverables. The Belgians and the Luxembergers are more flexible and fees are more negotiable. Generally, all the smaller consulting organisations and southern European consultancies will be more economical than those in northern Europe. Make Final Selection What makes the selection process difficult is that consultants tend to make the same promises, and many have the same professional experiences and skill levels. You must rely on or develop your own standard and established criteria for the selection. Once the final selection is made, a formal written agreement must be drawn up between the company and the consultant. This agreement should document all agreed-upon terms of the arrangement, including the responsibilities of both parties, deliverables, duration of the project, fee amount, and method of payment. Responsibilities must be detailed in precise terms, and the consultant must clearly understand the definition of responsibilities as stated by the company — and the company should understand the scope and limitations of the project and consultant. Moreover, the consultant must agree to honour the confidentiality of the client at all times. Monitoring the Project Once the contract is signed, management must have a plan for tracking and measuring the consultant’s performance. Unless this aspect of the consulting arrangement is carried out, the company may find that the project has detoured from its desired course. Project Phases Management will be able to monitor the consultant’s work more effectively when it is aware of what steps will be involved in the total project. Projects should have several phases and always include phases for research, analysis, selecting a course of action, and implementation. Evaluating the Project With most projects that require the assistance of an outside professional, it usually takes time for the effects of implementation to be felt. For this reason, the evaluation may take as long as a year or more to complete. The primary measure of the project’s success is whether the objectives and criteria set forth in the mission statement have been met. Conclusion The chief reason for engaging the services of a consultant is to produce change within the company that will lead to better performance. Working with the consultant is a joint undertaking: the consultant provides the expertise, and the company gives direction to the project. A successful partnership requires co-operation and precise communication on both sides. Most important, each party must acknowledge and benefit from the experiences and skills of the other. If you’re trying to decide which consultant can best solve your problems, you’re probably on the wrong track. A good general consultant is, or should be, a teacher — someone who is articulate, patient, clear and supportive. You’ll want a consultant who is willing to take you through the process, answer your questions, and ultimately let you make the final decisions. A consultant can provide you with the methodology and data for a specific task. Using a consultant can be beneficial to your organisation, highly educational and fun. By contracting with the right professional, you can save time, money and enjoy getting an edge over the competition. Because you have selected the best consultant you can, it is in everyone’s best interest to make the relationship work and achieve its objectives. As in any partnership, this requires constant work and communication from both parties starting with the selection and engagement with clear definitions of roles and responsibilities and deliverables. The cooperation may get derailed but that should not prove disastrous. Both of you should work to get it back on track. If you need help in working with external consultants, email MNSA with your requirements. We have helped before. Subscribe or Unsubscribe We hope you find the tips informative and relevant. If you know of others who would be interested in these tips, encourage them to sign up for our Tips via Email. Our mailing list remains confidential and is not used for any other purpose. Should you like to cancel your email subscription, please click here.
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