The Clients view of the Consultant or Contractor
The following narrative concentrates on some of the client (demander) perceptions of the consultant / contractor (supplier).
Capabilities
A consultant or contractor is likely to have capabilities that you as the client do not have at present.
Conversely you will have some issues which the contractor or consultant can help to resolve.
To decide which contractor or which consultant to use will depend on a number of criteria being satisfied.
Criteria
Each Manager will have a different need for using external staff on a project.
This need will depend on:
- A recognised problem existing that must be solved
- Whether the resolution of the problem is urgent
- The belief the client and other parties that the problem can be solved
- The recognition of the need for outside help – this can be expertise orexperience, or the objectivity of a professionally qualified outsider.
Needs and Recommendations
Both client and consultant will define and agree mutual needs and recommendations with specific reference to the consultancy required and the type of work.
These will be documented in the business case. This will be refined into the:
- Project / Assignment Initiation Document (PID).
- Request for Proposal (RFP).
- Statement of Requirement (SOR)
- Service Level Agreement (SLR)
- Service Level Agreement (SLA)
- A Contract
- An Invitation to Tender (TT)
- A Best and Final Offer (BAFO)
- or other document
Typical needs include:
Technical Expert; to undertake a very specific task, such as:
- Writing an enquiry programme, in a specific language to defined standards.
- Provide expertise in developing hardware specific line handling software,
Group Task; a team of consultants is brought in to handle a large but
short-lived task.
- A typical example is helping to set up an IT Service Management function based on ITIL guidelines. This would be combined with the appropriate training.
- It is usually more cost effective to hire outside help for this key activity than to use internal staff.
Feasibility Study; many organisations believe that an outside and expert view is especially worthwhile when initiating a project.
- It is frequently easier to accept outside advice for or against a key project than advice from inside.
Facilitation; often consultants are able to tread where no internal staff have trod before such as when helping in the development and acceptance of Service Level Agreements or running Joint Implementation Team JIT workshops.
Culture; in organisations where the culture and technology is ready to encourage Joint Implementation Teams or Joint Application Development teams
- The outside consultant with breadth of expertise can initiate, enable and facilitate.
- The Internal (Hybrid Managers) with such skills are usually “too valuable for the task” that they are already doing; they cannot be released to do something else.
Change Agent: Often the requirements may have evolved since the initiation stage creating major changes. As internal resources will already be allocated and therefore not available to you, you might choose external consultants to provide short-term help for specific tasks.
The task could be small, lasting just a week such as running a training course on how to identify and develop Service Improvements
- It could be major and contentious. Implementing changes in income support, London Traffic Management or Auditing the success of Government Contingency plans for Covid-19 are contentious.
- Upgrading the final pay pension scheme, staff benefits, new defence policy or “impact of related national and European legislation on our telecommunications service provision”. These may be big.
During change the consultant or contractor will provide the welcome support required to deliver best value on time.
Extension or Re-Implementation; As a product goes live the original development team and its expertise disappears. Eventually, the system will need to be upgraded.
- Rather than using and updating old techniques and skills it may be far more effective to bring in an outsider.
- Typical examples include the upgrading of “obsolete systems” or even migrating payroll packages written in Assembler.
Choosing the Consultancy
The Institute of Management Consultancy www.imc.co.uk suggest the following “ten golden rules” (these are expanded on their web site and advisory services).
- Clearly define the objectives that you hope to achieve.
- Consult with others in your organisation to agree those objectives.
- Short-list to three consultants, ask them to provide written proposals.
- Brief the consultants properly.
- See the individual consultant who will do the job and make sure that the ‘chemistry’ is right.
- Ask for references from the chosen consultant(s) and follow them up.
- Review and agree a written contract before the assignment starts.
- Be involved and in touch during the assignment.
- Ensure that the consultant does not save surprises for the final report.
- Implement the recommendations and involve your management as well as the consultant.
Some Risks When Using A Consultant/Contractor
Consultants do not know your organisation and its internal workings as well as in- house staff. This means that:
- There is a necessary but unproductive learning curve. This curve will have to be factored into the project estimates.
- Consultants are less committed. This should not be too critical for a short-term assignment, but be very wary about using consultants on mission critical tasks.
- It may appear attractive to bring in an outside expert to manage a high-risk project or a strategy study and many departments are very happy with the results
Consultants have other allegiances. Contractors and consultants are responsible to their own employer or to themselves.
- If there is a conflict of Interest, or if the client has allowed the contractors and consultants free rein then it is very difficult to regain control
Contractors and consultants need to be managed. They need a clear brief smart objectives:
- Work it all out before you hire them. Give them a specific work plan, ensure they understand the control mechanisms.
- Avold open-ended engagements
- onsultants develop their expertise from your budget. Ensure they do not bocome “indispensable”. Make them transfer their skills to BAU. Have regular meetings to ensure this is happening. Ask your staff “What have they taught you?
Justification for Using A Contractor or Consultant
- It is very important that job plans and associated contractor or consultancy requirements are established in time to allocate the budget
- Plan for the future, look ahead to year two, three and four, long term
contracts are easier and cheaper to negotiate.
Organisational Justification
There are three main criteria for justifying the employment of a contractor or consultant, these are:
- Internal Justification, Personal Justification, Cost Justification
Similarly, there are two major constraints:
- Budget limits, Timescales.
Personal Justification
In order to prepare your personal” justification consider the result you want to achieve. The best way of doing this is via a series of SMART objectives. These are objectives phrased as a statement about WHAT is to be achieved with associated criteria.
SMART objectives are, Specific, measurable, achievable, realistic and trackable. For example:
- “We require professional advise to help us produce selection criteria for enabling the shortlisting of personnel packages which will meet the requirements stated in section 2 of Appendix 4” may be clearer than “produce suitable selection criteria”.
SMART objectives also apply to the production of your terms of reference.
Cost Justification
The total money available to hire outside help is limited. It may also be affected by Government and business constraints. You need to think very carefully about the financial implications of hiring external help. Contractors are usually cheaper than consultants are. Short term and depending on the assignment, it may cost £1000 per day for a programme manager with business transformation experience, whilst longer-term assignments using an external Project Manager may cost significantly less, £500 to £800.
The charge may be affected more by the consultants’ sales and ‘bullshit’ ability than by his skills.
To justify spending between two and twelve times the cost of an in-house resource requires some very good arguments.
You may need to take account of EU requirements (some MOD, GCHQ and other supposedly sensitive Government contracts may avoid this).
Budget Limits
If you are working in any business there may be a limit for expenditure approval; approval is considered at the same time as the business case. This rule seems to be irrelevant in some cash-rich City Banks.
The cost estimates will include an estimate of the total cost, period of expenditure, estimate of the number of consultants and number of man-days that will be used.
If you are in a Government, QUANGO, Agency or Local Government department then refer to www.cgc.gov.uk for latest guidance.
Timescales
Time is also needed to write the business case and integrate the consultant into your business.
The Invitation To Tender (ITT)
Types of tender:
Single Tender
One firm only is invited to apply. This type of tendering is done when:
- The expertise is held by one organisation, e.g. a specific software package that needs to be changed or enhanced.
- The requirement is critical and there is no time to ‘choose the best e.g.panic legislation or policy changes affecting poll/income/rates tax collection.
- The task is sufficiently small, the requirements simple that the cost of other tenders would be greater than the assignment.
A single tender is not an excuse or lifeline for the client (or other demanders) who has failed to plan properly.
Restricted Tender
Two firms invited. Used when:
- Client is convinced that the two are a good shortlist.
- There are reasons (security, expertise) to indicate that a wider tender would be counterproductive.
- A degree of competition could bring rewards.
Limited Competitive
Four to six (known) firms are invited to compete. Used when:
- High value or high risk project.
- Several viable options are likely to arise.
- Requirements are complex.
- Lengthy assignment.
Full Competitive
Fifteen to twenty firms invited to tender and submit a proposal. This is likely to be used for a very large consultancy assignment. It is used for:
- Major computer procurements, competitive replacements or large turnkey systems.
You may be involved in the Tender Placement activity and will need to make a recommendation on which type of tender to use.
Buyer Interests
It is in your interests to ensure that suppliers should compete when responding to an ITT and presenting their proposals. Competition helps:
- Avoid complacency
- Encourage a lower price
More than one supplier proposal helps you to know:
- Know what is available
Recognise and manage the benefits and risks associated with the chosen supplier.
Documentation
You must document your recommendations especially if you suggest or do something a little bit revolutionary or just different. Documentation is needed to prove that:
- There is no impropriety
- All issues were considered
- Value for money was justified
- The alternatives that were rejected were less good than the alternative accepted
- You do not have any interests in organisations being reviewed by the SEC or other agencies
- You have never heard of Enron, Equitable Life or similar.
Conversations should also be documented.
The Business Case / Proposal
The main purpose of the Business Case is to help you sell your recommendations.
The philosophy behind a supplier’s proposal is to get an agreement to buy. The same philosophy applies for an internally produced Business Case.
The Business Case is just like a proposal, and like a proposal, the Business Case is a formally written and carefully prepared document detailing the reasons why external services are required and the impacts of that purchase.
Business Case Format
There are various formats for writing the business case, however, if the purpose is to get an agreement, and it always should be, then the case should cover the following points:
- The reasons for the consultancy support being required
- Type of consultancy suggested.
- Type of work expected.
- Timescales
- Budget Implications.
- Financial Approval
- Terms of Reference
- Length of contract, TOR, number and grade of consultants, task descriptions, etc.
Business Case Appearance
The appearance of the case and subsequently the ITT, the Terms of Reference, the contract and any covering letters should reflect the time, case and professionalism it has taken to prepare.
Changes to the Business Case
If any event occurs which alters the basis of its original justification for the business case or violates the terms of reference then the continuation of the project is in question.
The case and its justification is the basis for the management and control of the project.
The assignment terms of reference
Terms of Reference (TOR) are a vital part of the business justification. The TOR tells the consultant and client what to do and under what conditions.
Sometimes the Terms of Reference may be known as a “Work Package” or “Statement of Work” The TOR serve six purposes:
- To focus your mind on exactly what you expect from the contract or consultancy service
- To ensure that the consultancy company or contractor will know what is wanted, this means that they will be able to field the most appropriate candidates and proposals. Saving time on both sides
- To list the criteria for selection; specifically, the qualifications/skills required
- To clarify the role and job description. The consultant knows what is expected
- To serve as a checklist to help manage, monitor and control the progress of the consultant whilst he/she is working
- To help you manage the deliverables,
Time spend getting an accurate TOR will minimise the risks and arguments over contracts should things go wrong. They provide a lever to terminate the contract or get the consultant removed.
Summary
The business case and the terms of reference make your “Operational
Requirements” and provide the first indication of vetting/evaluation factors.