Melbourne, 24th August 2010. Research from sourcing advisory firm Orbys has revealed that organizations' approach consulting procurement in an inconsistent and fragmented manner. Available data are not used to best effect, diverse practices and non-standard processes are implemented simultaneously, and value is not measured, leading to budget overruns and poor project scoping.
The new research is revealed in two recent Orbys reports, which recommend the following key considerations for organizations looking to develop best practice in consulting procurement:
i) Selecting the optimum sourcing approach.
ii) Defining the scope of the engagement to be delivered.
iii) Enrolling and aligning your stakeholders.
iv) Selecting the right candidate consultancies.
v) Competitively tendering the engagement and executing the right contract.
vi) Being clear about what you are buying and how you are paying for it.
vii) Managing the consultant and realizing the value you wanted.
Orbys' survey of senior managers in 250 global organizations also reveals that the use of market intelligence information to help inform selection and buying decisions is mainly ad hoc in nature and utilized inconsistently amongst organizations (figure 1). Indeed over 60% of respondents do not plan their use of consultancies and how projects fit within their internal business planning cycle.
"Forward planning of spend on third-party consulting is in its infancy", says Samad Masood, Principal Analyst for Orbys, based in London. "Only a third of respondents plan all engagements fully, or on a regular basis, and while almost half 'try' to plan in advance, this is obviously not as good as actually achieving forward planning of consultancy spend". A fifth of respondents plan only on an ad hoc basis, or do no planning at all.
The survey results also provide insights into the following areas:
- Annual spend on consultancy and number of consulting engagements
- Proportion of engagements which have undergone competitive tendering
- Proportion of consulting engagements that overrun and where value is measured
- The number of staff in consulting procurement and where consulting spend responsibility lies
- Use of standard processes and scoping in consultancy engagements
All results and analysis are published in two related reports: Consulting Procurement: State of the Market and Consulting Procurement Best Practice, published by Orbys' parent company, Datamonitor.
