account management – David Bailey

On Thursday last week, I spent the afternoon with the Consultancy Procurement Council. The what? Yes, that’s right, the Consultancy Procurement Council. What a great idea!

Formed of Heads of Procurement for Consultancy and Professional Services Categories, the Consultancy Procurement Council is an exclusive peer learning group for expert procurement professionals to meet and share best practices regarding how to buy consultancy services better.

Representatives from a number of major corporates across the private sector were in attendance on Thursday at the meeting hosted by Bank of America Merrill Lynch in London (Note: I understand that they pass the baton round for the honour of hosting the quarterly sessions).

I was invited to be this meeting’s guest speaker on the topic of “How Consulting Firms Price Projects”, not to give away the family silver but, rather, to explain the key levers that consulting firms need to pull in order to achieve their financial objectives and then move into open discussion about how Procurement:Consultancy discussions can achieve both demonstrable value for the client organisation and a good financial outcome for the consultancy.

We looked at different pricing models (T&M, Fixed Price, Risk & Reward, Consultancy as a Service, Retainer etc) from the standpoints of both the client organisation and the consultancy and established different scenarios where the various models fit best for both sides.

The role of Procurement in educating client business/IT sponsors about the adverse impact on consultancies of starting projects later than advertised, having gaps between phases of work, setting tight deadlines etc. was discussed and the assembled gathering picked up good tips to help them partner internally within their corporations.

There are lessons too for the wider Professional Services and IT Services industry and I was saddened to hear stories about poor practice that I thought had been largely left behind some years back. Examples include jacking up expense claims to increase revenue (Note: lots of varied and recent examples provided here), Partners charging the client for “Partnering” without providing any actual input to assignments, and pulling critical resources from live assignments to put them on more lucrative projects elsewhere. There’s probably a mixture of both truth and a need for better understanding here but the grains of truth serve to give our industry a bad name. Isn’t a high ethical standpoint part of being a “trusted advisor”?

Building a positive working relationship with Procurement can reap rewards for both client and consultancy and I urge leaders of consulting firms to prioritise this higher in their account planning. Procurement isn’t “the enemy” but a function with a purpose – part of that purpose is to promote better value solutions to the business so Procurement can even help sell you in if you spend the time explaining your USPs and providing Procurement with appropriate materials that they can use in internal discussions.

As a closing thought, ask each of the Procurement Professional Services Category leaders that you know if they’re a member of the Consultancy Procurement Council. If not, I’d be happy to create the link – all part of the “added value” service that you can provide to your clients!

We all know the saying that it’s easier to sell to an existing client than a new one. How many firms, however, truly act in accordance with this?

I witnessed a classic situation a few years ago when the Managing Partner of a consultancy client of mine asked me to spend some time looking at the forward revenue profile of the firm and investigate anything that seemed strange. Amongst a number of other things, I noticed that a particular client, with fees for a current project amounting to well over £1m, had no forward opportunities marked against it so I decided to ask some questions.

The current assignment was going well and was due to complete in the next few weeks. Benefits for the client were coming through ahead of target and the client was happy. Delivery of the assignment, therefore, was not an issue. The issue, of course, was that the entire team devoted to the client was focused on purely the job at hand and was neither using the assignment itself nor spending time outside of the assignment to uncover further opportunities or even expand their network of Executive contacts within the client organisation. Thankfully, we had just enough time to work on this and a client organisation that was open to having wider discussions – a few months later, a new assignment commenced in a different division of the client. Phew!

I regularly come across situations like this, in all sizes of professional services firm. But why? Most firms deliver sales training of varying kinds to their consultants, especially from Managing Consultant to Director levels. Shouldn’t this be enough?

To understand this, we need to go back to why people enter the professional services industry in the first place. They like problem solving, they want variety in their job, they want to make a difference to a business, to government, to society. Nowhere in the list is selling work – sales is “a dirty word” and an uncomfortable place to be pushed into – delivery is so much more satisfying, and a safer place to be, for most consultants.

Surely this is illogical, especially within existing client organisations. Take the example given above – the client was happy and receiving benefit. In such situations, it is in the interests of the client if we can open up conversations about where else our consulting firm can help – if we help in other areas too, they’ll gain even more benefit and be even happier! What’s not to like?

Sales training courses focus almost exclusively on tools and techniques – that’s fine and will increase the chances of success. In our industry, however, we need to recognise that the vast majority of consultants will not be involved in new business sales beyond proposal writing and delivering their part of a beauty parade presentation – opening up “new new” opportunities will always fall to the few rather than the many.

All consultants do have a responsibility, however, to make existing clients happy and to deliver benefit for them – accordingly, they should be involved in the development and implementation of account plans for existing accounts and, crucially, they may need to go through a mindset shift to understand that doing this is in the client’s interests. If they truly believe this then their actions in this area will become more natural and “from the heart”, leading to more opportunities, increased fee income for the professional services firm, stronger client relationships and increased client value!

Tag: account management

Procurement – Friend or Foe?

Account management should come from the heart!