by Bruce Newman

   This article was originally published in The Productivity Institute (PI) Newsletter

Companies need consultants

Regardless of their size, all companies need consultants – they can’t have expertise in every area.  Consulting is a cost effective means of providing companies with the expertise they require in order to meet their specific needs.  One advantage of outstanding consultants is their wide breadth of experience and knowledge - which frequently translates into excellent project design and results that may extend beyond the initial range of the engagement’s core focus.  There have also been many reported instances of consultants providing feedback and guidance on issues outside the parameters of their original project, usually as a result of their knowledge and experience.

Measuring consultant performance

How is consultant performance measured? This controversial question has been asked many times and yet, has not been effectively answered.  Accounting types generally prefer highly quantitative measurements, usually involving some type of ROI (return on investment) measurement.  These may include a benefit to cost ratio, net consulting benefits divided by cost, payback period or numerous other calculations. What often needs to be assessed is the long tem benefit of consultant performance.  Unfortunately, these are the calculations that are not usually made or adjusted over time.  The benefits of outstanding design, implementation, or performance by a consultant over a period of several years can demonstrate an enormous return on investment. 

Rating consultants

In developing an algorithm to accurately rate consultants, many factors must be considered.  Past history with clients is one important measurement. However, this can sometimes be misleading since it may only reflect a subset of clients or specific areas of expertise by the consultant.  Similarly, years of experience may represent a huge variation ranging from a narrow focus as opposed to exposure to a wide range of situations.  One important factor that almost all outstanding consultants demonstrate is excellent communication skills.  It is through these skills that a project scope is discussed, interpreted and implemented.  Even the level of knowledge and experience can be overshadowed by poor communications.  Therefore, when considering these and other factors in the selection of a consultant, having a highly reliable algorithm or system will greatly enhance the likelihood of success and achieving excellent value.

Technology procurement

For many projects, the cost of technology can be daunting.  One way that companies have managed to reign in costs is through sourcing and procurement consultants.  This is particularly important for companies with large contracts where a specialist will help you get the best pricing and buyer-favorable terms and conditions for your project.

A procurement specialist will give you the framework to conduct a quick and meaningful procurement process, including access to a sophisticated software tools that are populated with numerous project-specific requirements templates.  This process-driven approach is designed to create a truly competitive bidding process, reduce vendor negotiation cycle times, and allow you to base your buying decision on the actual terms and conditions a vendor is willing to offer for your project.  It has literally saved tens of millions of dollars worth of technology transactions.

Bruce Newman is a consulting guru and the Vice President at The Productivity Institute, LLC (http://www.prodinst.com) which provides prodinst by matching the specific software products and services needs of companies to rated outstanding consultants who can meet those needs. Any company that wishes to improve their productivity can sign up for this free referral service and be contacted by up to five rated outstanding consultants. PI also offers Needs Assessment that can greatly help a company improve productivity and become more cost competitive.