1. Define the task and prepare the Terms of Reference
Before talking to a consultant it is essential that you define the job as you see it, preferably in writing. This scoping document, known as the Terms of Reference, is essential both to clarify your needs and also to select the most appropriate consultant.
The Terms of Reference should cover:
- The purpose of the assignment
- The tasks to be carried out
- The outcome expected
- The role that the consultant will play
- The scope of the assignment
Do you need a strategic plan outlining the options, or a business plan detailing how to implement them?
- The budget range
While it is not essential, giving an indicative budget will enable the consultant to prepare a relevant and therefore useful proposal.
- Change management
During the assignment, evidence may come to light that necessitates a change in direction. There should be some flexibility to amend the scope, and probably the price of the contract, mid-stream. Most assignments are let on a fixed-price basis.
- The timetable
State when the assignment should be completed, and when critical milestones should be achieved.
- The criteria for selection
What are the qualities you are seeking in the consultant? Develop a weighting system of the attributes you require to rank the candidates and to select the most appropriate consultant.
- Consider using the IMC New Zealand Consultant Search facility on the website or the IMC New Zealand management consultant search service
2. Short-list the most suitable consultants
Before issuing the Terms of Reference and requesting a proposal, you should develop a short-list of consulting firms. You must assess which factors are important and select accordingly. Many consultancy assignments
are based on personal relationships, but you should ask these questions:
- How long has the firm been in business?
- What is the scale of its operations?
- Does it have the experience, competence, and resources to handle your assignment?
- What calibre of staff does it employ? How many are CMC-qualified?
- What are the credentials and reputation of the individuals proposed
- What sort of training does it give its staff?
- Is it familiar with the best international management practices and experienced in adapting these to local requirements?
- Can it introduce changes smoothly and effectively?
- What kind of clients has it served?
- What do its clients say about it?
- What level of indemnity insurance does the firm carry?
After the short-list has been drawn up, invite the short-listed firms to submit a proposal based on the Terms of Reference. Each firm will require time with you to discuss the task before they submit their proposal. It is important that this process be impartial.
3. Review the proposals
A proposal should set out the problem or area under consideration in sufficient detail to establish:
- The diagnostic approach
- The necessary work programme
- The expected benefits
- Estimates of time and cost
- The qualifications of the consultant who will undertake the work
The proposal should indicate whether the consultant has understood the situation and whether the approach is appropriate and represents a sound business proposition. You must assure yourself that the firm has the capability to see the project through to a satisfactory conclusion.
4. Select the right consultant
The proposal will nominate the individual consultant or consultants who will undertake the work. The individuals making up the consulting ream will be critical to the assignment success. It is important that you interview them prior to selection.
Remember that written proposals may not always give an accurate picture of the tenderer's suitability.
Consultants often indicate the methodology the consultant would use if given the work. This can be a valuable source of ideas for you, and at this stage no charge has been made.
In evaluating proposals you should consider:
- The quality of the proposal document
Has the consultant gone to some effort to prepare it?
- The content of the proposal
Does it address the Terms of Reference? Are the ideas presented both interesting and constructive?
- The methodology for the assignment
- Is it feasible? Is there a reference to a previous assignment?
References for contact and verification of previous work
The suitability of the person or team to carry out the task
Ensure that the person or people promised will actually do the work, and that they are compatible with you and your team; and similarly for subcontracted consultants where they are to play a significant role. In evaluating the individuals the important factors are: qualifications and track record experience in your particular industry and specialty reference checks with previous clients personality fit with your organisation.
- The time-frame Is it practical and achievable?
- The fee.
Do not immediately discard proposals on cost alone. There may be room for negotiation on a very good but highly priced proposal.
5. Engage the consultant
In engaging a consultant you are entering into a commercial contract in much the same way as if you were purchasing goods or services.
There are several ways of expressing the contract. You may draw up a commercial contract specifically for the purpose, in which case the Terms of Reference would form a part of the contract. But the most common means of expressing the contract is by acceptance of the consultant's proposal. Most consulting firms have a standard Terms of Business document that could constitute a default contract, but you need to be sure that you are comfortable with its contents.
Two points should be noted:
- The Terms of Reference principally describes the task to be done, and may not cover all the legal aspects
- In the absence of formal documentation such as a Terms of Business document, any dispute would have to be resolved on the basis of the Terms of Reference alone. Inadequate documentation may make resolution difficult, If in doubt, consult your legal adviser.
Regardless of the manner in which the contract is expressed, the items which ought to be considered for inclusion are:
- The Terms of Reference
- The fee and payment arrangements
- The time-frame for completion of the job, achievement of milestones, and review dates
- The circumstances under which the contract may be amended or terminated
- Copyright issues, that is, the title and ownership of material, including intellectual property
- Confidentiality aspects
- The consultant's use of your people and resources
- Professional liability
It is worth remembering that the purchase of a professional service is finalised only when the assignment is completed to the satisfaction of both parties. Engaging a consultant is only the beginning of the process.
6. Manage the assignment to get the best results
Both parties have a big stake in the success of the project. You want to ensure that your organisarion gets value for money. The consulting firm wants to do an excellent job that will further enhance its reputation.
To manage the assignment through to a successful conclusion, ensure that:
- There are clear, written Terms of Reference which have been agreed to by all parties before the work is begun.
- Any changes to the Terms of Reference agreed during the project are recorded in writing, so both parties always know clearly what is to be done and what is expected of them.
- A senior member of management (sometimes aided by a steering committee) is responsible for the project.
- You provide adequate facilities and staff to work with the consultant, make the necessary decisions within a reasonable time, brief all staff likely to be affected, and generally support the assignment through to a successful conclusion.
- The executive responsible for the project agrees a reporting procedure with the consultant so the project is under systematic, regular review and timely action can be taken to resolve any problems.
Some time after completion, the project should be evaluated in terms of the results achieved, the lessons learned, and the scope for extending the benefits to the other parts of the organisation. When the fundamental reason for using consultants is to adapt to change, success also means having stimulated your staff to accept and adopt the new ideas and approaches.
This article is reprinted with permission from IMC New Zealand, Institute of Management Consultants New Zealand. for more information go to the iMC New Zealand website: https://www.imcnz.org.nz/