Before we proceed further, let us be clear as to who is a consultant? In simple words the term ‘ consultant’ means any advisor who provide business or technical advise to the management of organizations; this includes accountants, management consultants, marketing consultants and technical consultants such as engineers, project managers and information technologists.
Why do we need consultants?
Now let me try to make it clear as to why do entrepreneurs need consultants. The necessity for consultancy perhaps arises from the coupling of two factors: the speed of change in the business environment and globalisation. This combination has created uncertainty among the entrepreneurs about their ability to adapt to face the future without support. In addition, the entrepreneurs are increasingly open to new ideas and aspiration to raise the standard of management and decision-making within businesses to enable them to compete in increasingly competitive and global markets. Some other leading reasons for hiring consultants are for taking second opinion about some issue, confirming the correctness of what you know, lack of in-house skills, lack of in-house human resources and some times the company would have identified company specific problems.
Even the role being played by business consultants are being compelled to change in the lines of changing customer expectation. The stereotype report based consulting is being transformed in to more benefit oriented and more visible real return on the entrepreneur’s investment in consultancy. Increasingly the consultants are made to follow their recommendations through to ensure successful implementation. In a nutshell the consultants are now increasingly playing a facilitative role rather than the prescriptive role.
Then where do things go wrong? There can be infinite reasons for the consulting assignment to go wrong both from the client’s side and consultant’s side. We shall discuss perhaps the most frequent and important ones. In the forefront is the entrepreneur’s inability and inconsistency in understanding what their business objectives are, why they are using consultants, and how they are going to ensure value for money is returned. This results in the dissatisfaction of clients and eventually the unsuccessful consultancy experience.
Engage the services of the consultants only when it is required and not for wrong reasons. Some of the wrong reasons normally the clients would fall prey for hiring the services of consultants are may be to satisfy someone’s ego, to suit internal politics or to follow the fashion in the industry.
As the clients do fear to engage consultants, even the consultants face fears. The major fear factors the consultants would have are regarding the extent of co-operation, internal politics of the client’s organization and most importantly the tendency of client’s believing what they know is the best, which will put consultants in dilemma quite often.
How to choose a business consultant
Traditionally, the business consultants are selected on the basis of recommendation by friend or colleagues. But as the importance of consultancy and professionalism of the clients are improved, they are increasingly using the method of tendering for selecting the consultants. The selection process is not complex, but you have to keep to a well-planned and structured method to over come the possible pitfalls for making the best out of the consultants. A checklist is being provided herewith for your reference to refer to while choosing a business consultant,
- Identify the issues that cannot be handled in-house and describe them in detail to determine what skills are required to resolve them
- Form a selection committee to manage the selection process and possibly the subsequent implementation of recommendations.
- Collect information on possible business consultants or advisors who are specialized in your industry.
- The selection committee should formulate timetable, the evaluation approach, and criteria.
- Invite and receive proposals, and evaluate against agreed criteria.
- Conduct presentation, discussions and negotiations.
Considerations to be taken while choosing consultants
In the first place make sure that the objectives and scope of the project has been well defined. Normally the bid should be invited in two parts, one technical and two, financial part. First the technical part has to be carefully analyzed to rate the professional qualifications and experience of the consultants to carry out the said assignment and shortlist them. Then the financial part of the bid is opened to rank the financial quotations. Based on the performances of various bidders, an appropriate selection should be made. Some of the other issues you should look into are the terms and conditions; time required, legal clause, payment terms, stages of payment and personnel used for the study.
To make best use of the consultants, you are advised to establish your need for using consultants in the first place, and then you must prepare to use consultants carefully. Here are some suggestions to make proper use of consultants:
Use consultants to take you into future and do not simply focus on the present problems and be creative while preparing to use the consultants.
Usage of business consultants will be more productive if you a have written statement of your business plan containing vision, mission statement, plans to achieve objectives, basic strategies etc. while preparing the business plan, you would require to think about your company more intensely than normally you do.
Prepare the ground internally in your company in terms of educating the managers of your company as to why the consultants are being brought in to, what to expect from them, how to cooperate with them, and its impact on the people concerned.
In the whole process do not lose the sight of the big picture you have in mind for your business. You must coordinate and streamline all these efforts towards conquering the ultimate objective that you have thoughtfully dreamt for you enterprise.
Author: Dr. D. N. Murthy
Dr. D. N. Murthy is a senior Professor at IFIM B-School specialized in Marketing area. He has his Doctorate from India and post Doctoral qualification from University of Washington, US. He has worked as Marketing Consultant for about a decade.