The fine art of hiring consultants

Pressure test a range of consultants when you’re looking for help.

By investing more time running a competitive tender process, companies should end up with the consulting services that better reflect their business needs.

Unsurprisingly, consulting services now represent 55 percent of what’s collectively a $27 billion tax, audit and consulting industry, and increased competition continues to raise the bar on service offerings. Also, according to a report by research company Source Global Research, called Planning for Growth in 2017, Australia is now one of the most attractive consulting markets in the world, surpassing the UK and the US.*

If like most Australian businesses you are a buyer of consulting services, you need to be able to run a ruler over what’s on offer, and pressure test a handful of contenders before making any contractual obligations.

Competitive tender process

If you are planning to run a competitive tender process, the best place to start is by identifying a universe of known entities, which in Australia includes 10 leading providers. Any one of these firms should be able to offer a full suite of expert corporate financial, business advisory and accounting services across national and global networks.

Those that don’t are unlikely to be sufficiently equipped to cater for the growing needs of a large business, and certainly not ones with offshore reach. Once you’ve established a universe of potential service providers, the next step is to run a number of filters to screen out those consultancies that don’t pass muster based on key criteria. It’s also useful to find out what sort of weighting each professional service provider has to clients within the Asia-Pacific region within which most Australian businesses focus their energies.

Level the playing field

Having filtered your list to between five to eight contenders, you need to start levelling the playing field. An important way to look beyond the ubiquitous tender document is to get each provider to demonstrate how they would address a threat, strength or opportunity currently confronting your business. Another good way to ensure you’re levelling the playing is to get an early indication of price considerations.

The presentation

Based on price, the quality of their tender documents and the underlying thinking brought to bear on any company-specific issues, you should then invite the best three contenders to make formal presentations.

In addition to demonstrating their resources, and the calibre of their internal expertise, what you’re looking for within the presentation is sufficient evidence they fully understand your business, and the risks, threats and opportunities confronting it. Equally important, the presentation should give you an accurate picture of the resources, network, human capital and innovation the consulting firm will bring to its client engagement.

Tips, traps and misnomers

Before engaging any consulting services, remember not to fall for the lowest price. As well as ensuring all individual and service deliverability references have been successfully checked, it’s also important to ensure you clearly understand what world-class technological know-how they will also bring to the table.

You also need to understand exactly how available their internal expertise will be to your business when you need it most.

Provide sufficient transparency

The opportunity cost associated with tendering for your business can be expensive, so it’s important to respect the process.

Whether they recognise it or not, businesses that engage consulting services are effectively entering a highly collaborative partnership. To ensure consulting firms aren’t put on the offensive, it’s vital for client firms to be as honest and transparent about their business as is commercially appropriate.

*http://www.sourceglobalresearch.com/report/1319/planning-for-growth-in-2017

David Wall, Director – Assurance & Advisory, RSM Australia

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