When a skill is lacking internally or when it is necessary to have an external view, it is useful to call on a consultant. In this article, we explain how to choose the right External Business Consultant.
When to hire a consultant?
There are generally two reasons to hire a consultant.
- The first is having to solve a specific problem, such as an outdated billing system that requires careful consideration – and one that lacks the in-house technical knowledge to do so.
- The second is when you are considering a strategic issue, such as when your business is considering relocating to another country and you need objective external advice.
Fundamentally, consultants are first and foremost advisers. But their suggestions don’t replace the preliminary work you (or your business) need to do.
Should you use a consultant?
It helps to know if you really need it!
1-. Do I fully understand the essence of the project?
Clients and consultants often have different views on the ultimate goal, and objectives are often loosely defined (eg, “improve a business process”).
A consultation task without measurable goals usually ends in frustration. Before contacting the consultants, try to assess the scope and purpose of the proposed project.
2-. Does management support the consultant’s mission, both organizationally and financially?
Lack of senior management commitment to the consultant’s project is a guarantee of failure. Too often, front line managers hire consulting services without the full support of senior management. Conversely, senior executives often impose their preferred consultants on unsuspecting managers.
The internal disconnection consumes time and resources, generates mistrust and poisons the project. Before moving forward, seek consensus on the need for outside advice.
3-. When is the contract due to end?
Consulting and outsourcing are completely different activities. Managing a business process, as it is euphemistically called, is a long-term contract between the company and an external agent, in order to manage a central business operation. But the consultant’s activity must have a definite beginning and end. It is not advisable, nor profitable, to hire consultants to manage the affairs of the company as a whole.
4-. Can the company provide the necessary support once the project is completed?
Counseling is like exercise: without monitoring, it’s a waste of effort. To ensure success, closely monitor the post-consultation program.
How to find a good consultant
It can be a daunting task for those unfamiliar with the industry. The companies that provide databases and business guides have identified more than 200,000 consulting firms in Europe.
These sources are useful for identifying consulting firms based on their location, the companies they frequent or the services they provide. Small businesses are increasingly promoting their services on the web or in a Marketplace.
Work and price proposals
Once you have identified several possible candidates, ask them to send you their proposals. Think of them as the consultant’s cover letter. Never, under any circumstances, pay for a proposal or agree to close the deal “with a handshake”. And while there is no formula for developing proposals, a well-written document will answer the following in a clear and concise manner:
- Does the consultant have a good understanding of the problem?
- Has the approach and methodology for solving the problem been presented in a clear and succinct manner?
- Is it possible to quantify the benefits of the counseling task?
- What is the relevance and experience of the team of consultants?
- What are the fees?
By analyzing the proposal, you will have a better idea of the consultant’s compatibility with your business. Proposals written in consultant jargon, which do not define the end product, are unnecessary. Customers need to fully understand the results they will get and how quickly they will get them.
For fear of violating the confidentiality agreed to with the client, consultants usually do not describe the details of their work to strangers. This makes it difficult to thoroughly check the references, a topic of vital importance, no doubt. Ask the finalists of the selection for the data of the clients whose projects appear to you.
Questions to ask yourself when choosing a consultant
What types of activities carried out by the consultant may apply to your problem?
Consulting firms are experts in transferring and adapting best practices to a wide variety of businesses. However, you will get better service if you choose a company that has a proven track record in dealing with the issues your business is facing.
Who will be the main consultant of the project and what is their experience?
Consultants are known to dazzle their clients with renowned partners with impeccable credentials, but once the contract is signed, they often outsource the project to junior consultants.
What is the background of other members of the consultation team?
Consulting is a core business: the junior team members will do most of the analytical work under the guidance of the senior associates. Getting to know the junior team members builds trust and confidence.
What value-added metrics does the consulting firm use for each task?
Strategy consultants use customer satisfaction techniques (customer surveys) more than operations consultants, who often set their fees with specific improvements in mind. Increasingly, consultants view involvement in the client’s business as a form of payment and seek to increase the value of that heritage through their efforts.
What are the consultant’s fees?
After contracts, fees are the most difficult issue to deal with with consultants. Most consulting services are billed by the hour or by the day. Depending on the level of expertise and experience, prices may vary. Count 400 euros minimum per day for a junior. Seniors can climb much higher. The fees might seem outrageous at first glance, but good advice is worth it, especially if the results are clearly defined.
Establishing clear measurement criteria takes time, but the process allows both parties to set performance standards. The financial relationship is particularly important: it allows the client to place a monetary value on the benefits he will derive from the task, and the External Business Consultant to know that he will receive for the work done.
Does the consultant detail the fees, including all team member costs, as well as daily expenses and staff costs?
Large consulting firms have high overhead costs and therefore need to allocate them to all of their consulting activities. However, customers should have a clear understanding of fees and how they relate to particular services.
Usually, the client pays the expenses which are part of the project, but which are not costs such as: personnel transfers, plane tickets, bus tickets, accommodation, meals, etc.
Can the consultant guarantee his work?
Most External Business Consultant companies strive to keep their clients happy, but they rarely offer a 100% guarantee on the money invested. During the proposal stage, make sure that the consultants specify precisely what they will be offering.
Does the consultant perform an analysis after completing his assignment?
Some consultants insist on obtaining a “post-assignment” certificate for each activity they perform. This is a sign that you have worked with a quality company and that you have a clear interest in providing top quality service.
What will be the operational impact of the consulting activity on your company?
Consultants should help you “reinvent” your business. No help is needed to increase operating profits by 10 percent. Avoid consulting firms that promise only marginal profits.
How to ensure the success of a consultancy assignment
Advice is always personalized service. Since references speak about the culture of the company, they are the most reliable indicator to assess the compatibility of a External Business Consultant firm with the company and its specific needs.
A good client-consultant relationship is essentially based on trust; the consultant strives to ensure that her work has an impact on the organization over time and, if there is not good personal compatibility, trust is less likely to be established and a certain impact will take place. Additionally, many consulting jobs fail when clients don’t engage in managing that relationship. Consultants always appoint a project manager to lead the team; customers should do the same.
The truth is that consultants cannot work miracles and clients are not incompetent; everyone is responsible for ensuring that the task achieves the desired result. When one game fails, both parties are responsible.
Hiring a consultant can be a big expense, but see it more as an investment if you’ve done it right. Many External Business Consultant have real added value for your business.