London: Procurement professionals are taking an increasingly active role in the consulting projects they buy, according to the UK's Management Consultancies Association (MCA).
A new report published by the MCA this week says that procurement departments, who have played an increasing role in buying management consultancy, are now playing a more active role in project delivery.
The MCA formed the Consultancy Buyers Forum in September to help improve consulting procurement, and its report says that almost half (47 per cent) of procurement professionals have either some involvement, or are very involved in the consulting projects that they buy.
The report, Generating value: Making a Difference is based on 200 interviews — 47 per cent of which were with procurement professionals and 53 per cent with main board directors within large UK-based private sector organisations. Both are key buyers of management consultancy services, and whilst they disagreed on the need for pre-existing relationships, they are both focused on demonstrating a clear deliverable and value:
- Relationships & Risk — Pre-tender, almost two thirds (58 per cent) of board directors, compared with only 36 per cent of procurement professionals feel that a pre-existing relationship at senior level is very or extremely important. Procurement is also less interested in sharing risk and thought leadership than their director counterparts.
- It's about value not price — When it comes to the purchasing decision, out of the seven key factors in the bidding process, both procurement professionals and directors stated that price was the least important factor. In contrast, the need to show a clear deliverable or value — ranked as the key factors.
ROI of more than six times the investment
The focus on value is also leading to a significant return on investment for clients. On average, and across all types of consultancy, the research found that consulting projects delivered a return on investment worth around six times the fees that were paid. Some projects delivered a value worth over 20 times the fees paid.
Alan Leaman, Chief Executive of the MCA, commented, "We know that more and more buyers are looking for value and want to know how to secure the best return on their investment.
This is why the MCA's Consultancy Buyers Forum is putting the value of consulting at the core of its work. The best start is an open dialogue about the objectives of any consulting project and what it is designed to achieve. By working effectively with consultancies, and their internal stakeholders, at every stage of the relationship, procurement professionals can play a big role in delivering success."
The MCA research is part of the initiative to understand consultancy client needs and directly feeds into the recently launched a Consultancy Buyers Forum, which brings together the country's leading consulting firms with major client organisations — including many household names — and procurement professionals.
The Forum will promote the highest professional standards in buying and delivering consulting and explore ways of achieving even better rates of return for clients.
Leaman added, "Above all, the Forum will focus on the value that consulting can deliver. We can only do that if there is effective communication between clients and the consulting industry as a whole."