| | British companies should
be able to generate far
greater value from their
use of external
consultants, according
to a comprehensive study
of buying attitudes
published today.
The research,
commissioned by leading
IT and business services
company LogicaCMG,
surveyed board level
buyers of consultancy
services among 100
leading UK businesses
across a range of
sectors. It found that
while the use of
consultants is both
widespread and on the
increase, some companies
are showing a lack of
sophistication in how
they are selecting,
managing, and measuring
the performance of the
consultancies they use.
Of those questioned,
60% thought they were
proactive and strategic
buyers of consulting,
but this claim was
undermined by their
detailed responses which
showed a pattern of
reactive and tactical
buying of external short
term consultancy
services, indicating a
significant gap between
perception and reality.
According to an
assessment of their
buying habits and use of
consultants, only 40% of
the companies surveyed | |
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Aspirants (23%):
companies displaying
reactive buying
patterns, and using
consultants for
short-term tactical
activities, often driven
by external pressures
such as regulatory
compliance
Mid-life Crises
(27%): companies that
are mature buyers of
consultancy, but who are
failing to learn from
past experiences or lack
of success measures and
continue to hire
consultants in a
reactive manner, to
solve problems more than
for strategic
programmes.
Respondents expressed
reservations about using
larger consultancies,
fuelled by a frustration
that consultants from
these firms can spend as
much time looking for
more work as they do
undertaking the job they
were hired to do. In
addition, 61% said they
expected to pay extra
for using a large
consultancy simply
because of the name, and
50% admitted to being
deterred from using such
consultants because of
high profile failures
and cost overruns.
A key criteria for
assessing whether | |
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| | companies are mature
users of external
consultants is if they
measure the impact
consultancy activity has
on their business: one
in 10 of those
interviewed never do any
measurement while only a
third always do. The
study also found that a
significant number were
not even employing basic
measures such as
comparing results with
original objectives
(25%), or looking at
whether the work was
delivered on time (25%).
Relationships between
respondents and their
external consultancy
providers are on a
strong footing,
according to the
research, with a healthy
appreciation of the
benefits they can
deliver. Respondents
gave a mean score of 4.5
out of 5 (with 5 being a
great benefit) for
consultants’ ability to
focus on real actions
and see them through,
the same score for
delivering value for
money, and 72% reported
that real loyalty and
trust had been built
during their last
engagement.
Alan Russell,
director of LogicaCMG’s
consulting division and
the president of the
Management Consultancies | |
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| | Association, said: “Our
research indicated that
many clients buy
consulting services in
the same way that they
would purchase
commodities, which
suppresses the business
value that a
well-founded consulting
assignment can bring.
This situation may
contribute to another
finding, in that clients
may not permit
consultants to assist
with the development of
a strategic
specification for their
work, leading to a
surprisingly high
proportion of short-term
or tactical engagements.
“Consultancy
suppliers in turn would
be advised to change
their approach, by
having the flexibility
to respond to the needs
of clients in distress
situations and
accommodate the short
term constraints that
may impose. This will
help them win the
client’s trust so that,
in the longer term, they
can act as an advisor to
the client to introduce
a more strategic
approach that can
deliver sustainable
value and enhance
business performance.”
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| | could be classified as
mature buyers of
consultancy with a
strategic approach.
This analysis of the
research findings was
mapped onto a diagram,
The LogicaCMG
Consultancy Quadrant,
in order to examine
possible causes and
relationships between an
organisation’s strategic
vision when it comes to
employing consultants,
and the maturity of
their buying process.
The analysis identified
four different types:
Rising Stars
(10%): buyers who are
less mature in the way
that they buy consulting
services, but who manage
their consultants
strategically to give
good business benefit
from their work
Wise Owls (40%):
those who are
experienced and
effective buyers of
consultancy, who use
consultants for well
constructed programmes
of work that align with
clearly defined
corporate strategies.
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