{"id":48538,"date":"2022-01-19T11:00:43","date_gmt":"2022-01-19T16:00:43","guid":{"rendered":"https:\/\/consultingquest.com\/?post_type=insights&#038;p=48538"},"modified":"2025-03-20T07:00:00","modified_gmt":"2025-03-20T11:00:00","slug":"consultancy-procurement-for-beginners","status":"publish","type":"insights","link":"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/","title":{"rendered":"Consultancy Procurement Cheat Sheet for Beginners"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_76 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-68cd552d7ab5c\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-68cd552d7ab5c\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#what_is_consultancy_procurement\" >What Is Consultancy Procurement?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#direct_vs_indirect_procurement_understanding_key_differences\" >Direct vs. Indirect Procurement: Understanding Key Differences<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#the_consulting_procurement_process\" >The Consulting Procurement Process<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#1_after_the_request_for_proposal\" >#1. After the Request for Proposal<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#2_change_management\" >#2. Change Management<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#3_middle_of_the_project_assignment\" >#3. Middle of the Project Assignment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#4_closing_the_project\" >#4. Closing the Project<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#5_giving_receiving_feedback\" >#5. Giving &amp; Receiving Feedback<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#what_you_need_to_know_when_purchasing_consulting_services\" >What You Need to Know When Purchasing Consulting Services?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#1_intangibility\" >#1. Intangibility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#2_impact\" >#2. Impact<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#3_negotiation\" >#3. Negotiation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#4_true_value\" >#4. True Value<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/consultingquest.com\/insights\/consultancy-procurement-for-beginners\/#a_quick_round-up\" >A Quick Round-Up<\/a><\/li><\/ul><\/nav><\/div>\n<p>[et_pb_section fb_built=&#8221;1&#8243; admin_label=&#8221;section&#8221; _builder_version=&#8221;4.16&#8243; global_colors_info=&#8221;{}&#8221;][et_pb_row admin_label=&#8221;row&#8221; _builder_version=&#8221;4.16&#8243; background_size=&#8221;initial&#8221; background_position=&#8221;top_left&#8221; background_repeat=&#8221;repeat&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;4_4&#8243; _builder_version=&#8221;4.16&#8243; custom_padding=&#8221;|||&#8221; global_colors_info=&#8221;{}&#8221; custom_padding__hover=&#8221;|||&#8221;][et_pb_text _builder_version=&#8221;4.22.1&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;]If you\u2019re a novice in the consultancy procurement game, it\u2019s natural for you to find the process to be daunting. Such a humungous amount of information to process!<\/p>\n<p>Where do you start? What are the best practices? How do you know if you\u2019re getting a good deal?<\/p>\n<p>In this beginner\u2019s guide, we break down everything you need to know about consultancy procurement.<\/p>\n<p>We\u2019ll give you an overview of the key steps involved in the procurement process and will help you get started on your sourcing journey.<\/p>\n<p>So, let\u2019s begin with a definition.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"what_is_consultancy_procurement\"><\/span><strong>What Is Consultancy Procurement?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Consultancy procurement is the process of contracting an outside firm to provide consulting services. Its main purpose is to help an organization obtain expert advice or services to help solve a specific problem.<\/p>\n<p>Often, an organization would hire consultants when it does not have the internal resources to address a particular issue.<\/p>\n<p>For example, a company may seek out a consulting firm to help them improve their manufacturing process. In this case, the consulting firm would provide advice and recommendations based on their expertise in the field.<\/p>\n<p>Consulting can also be used to supplement existing staff or to fill a temporary need. For instance, a company may hire a consulting firm to help with data analysis during peak demand periods.<\/p>\n<p>Obviously, consultancy procurement is a sub-category of procurement activities centered on consulting services. But let\u2019s take a step back.<\/p>\n<p>Procurement can be segregated into two elements: <a href=\"https:\/\/consultingquest.com\/podcasts_smcs\/direct-vs-indirect-procurement\/\">direct procurement and indirect procurement<\/a>.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48541\" src=\"https:\/\/consultingquest.com\/wp-content\/uploads\/2023\/09\/What-is-consultancy-procurement.png\" alt=\"What is consultancy procurement\" width=\"600\" height=\"600\" title=\"\"><\/p>\n<h2><span class=\"ez-toc-section\" id=\"direct_vs_indirect_procurement_understanding_key_differences\"><\/span><strong>Direct vs. Indirect Procurement: Understanding Key Differences<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Direct procurement refers to purchasing any item that contributes to the production. It can be parts, components and goods such as raw materials that are utilized by the company\u2019s operations.<\/p>\n<p>For example, wood, nails, concrete, and other construction materials are utilized as raw materials for home construction. Similarly, raw food items sold in retail stores are utilized as raw materials in the restaurant industry.<\/p>\n<p>To earn revenue, companies that sell tangible goods to consumers or other businesses, use direct procurement. Businesses such as software services, whose final result is intangible and for which no raw materials are used in production, are an exception.<\/p>\n<p>Indirect Procurement, on the other hand, is when a company acquires goods or services that are not used in the production of a final product. Instead, they are used in the day-to-day operations of the business. Examples of indirect procurement include office supplies, janitorial services, and consulting services.<\/p>\n<p>To sum it up all, direct procurement is focused on acquiring goods or services that are used to produce a final product. Indirect procurement is focused on acquiring goods or services that keep the business running on a day-to-day basis.<\/p>\n<p>Consultancy procurement is a sub-set of indirect procurement, often folded into the professional services category with marketing, executive search and legal. Now that we are clear on the definitions, let\u2019s have a look at what makes consultancy procurement so special.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"the_consulting_procurement_process\"><\/span><strong>The Consulting Procurement Process<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The consultancy procurement process can be lengthy and complicated, involving many different steps and stakeholders.<\/p>\n<p>However, there are some basic principles that all organizations should keep in mind when procuring consulting services.<\/p>\n<p>Too many businesses that want to hire consultants don\u2019t realize how complicated the procurement system can be. At first glance, it seems like a simple process that ends when the order is placed.<\/p>\n<p>But consulting isn\u2019t that simple. Signing a contract and assuming everything will go as planned doesn\u2019t take into account how flexible consulting and intellectual services in general are.<\/p>\n<p>In order for procurement to be successful, it should be a long-term process that goes beyond the moment the contract is signed. Thus, let us look at the consulting procurement process in detail.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_after_the_request_for_proposal\"><\/span><strong>#1. After the Request for Proposal<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Do not cut ties with consultants you did not choose to work with. Instead, tell them why you decided to go in a different direction.<\/p>\n<p>Be honest about the proposal\u2019s pros and cons and how it could have been better suited to your needs.<\/p>\n<p>This step doesn\u2019t take much work on your part. But for the consultants you didn\u2019t choose, you give them valuable information about what you want and how they can compete for future proposals and opportunities like yours.<\/p>\n<p>If consultants are willing to listen, they can use these lessons to improve their chances of getting similar jobs in the future. Because you never really know.<\/p>\n<p>You might need a consultant again in the future, so keeping in touch with more than one can be good for both you and the consultant.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_change_management\"><\/span><strong>#2. Change Management<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>No matter how hard you try, building and keeping relationships with consultants during the execution of a project is not as easy as you think.<\/p>\n<p>A number of changes will happen during the project that you didn\u2019t plan for in the proposal or contract. A few of these changes could be:<\/p>\n<p>As needs become clear, new tasks may be added, and deliverables that are impossible or hard to reach may be dropped.<\/p>\n<p>Organizations are always changing, and both sides may have to plan for a change in staff that needs to be adjusted and perhaps trained.<\/p>\n<p>Before a project starts, everything is just like a guessing game. As the real length of the project becomes clear, you may need to change the pace.<\/p>\n<p>There may be changes to the budget, project mergers, project freezes, or any number of other things that could affect how the project is done.<\/p>\n<p>Change management is needed to keep these changes from throwing the project off track. By keeping a log of all changes as they happen, you can make changes to the business environment in time, before they become dangerous.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_middle_of_the_project_assignment\"><\/span><strong>#3. Middle of the Project Assignment<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Set a target date for yourself and your consultants to meet in the middle of the project as soon as possible. This is an excellent time to go over the initial goals and get back on track to meet them on time.<\/p>\n<p>As you work on a project, it\u2019s easy to get caught up in the small details that won\u2019t change the project\u2019s overall success.<\/p>\n<p>With a Mid-Project assessment, you and your team can make sure that these inevitable side projects don\u2019t put the project\u2019s timeline and success at risk.<\/p>\n<p>The Mid-Project assessment should be a significant event for all parties involved. Separate it from regular operational project reviews, which should take place in smaller groups and on a regular basis.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_closing_the_project\"><\/span><strong>#4. Closing the Project<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>When the project is completed, it is time to conduct a thorough evaluation. You should compare your final results to your initial goals, which will help you understand and plan for the adjustments that are still needed to reach your ultimate goal.<\/p>\n<p>You can also evaluate your relationship with your consultants at this time, as well as whether they delivered on their initial promise. Consider commercial quality, delivery quality, posture, talent &amp; expertise, and ROI as it relates to the project when evaluating your provider.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"5_giving_receiving_feedback\"><\/span><strong>#5. Giving &amp; Receiving Feedback<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Nobody is perfect, and no project or professional relationship is. The project closure is an opportunity for you to provide feedback to your project suppliers on the results, relationship dynamics, and any other aspects you discussed in your project closure review above.<\/p>\n<p>Giving feedback helps your consultants improve their business by better understanding client expectations and identifying potential blind spots.<\/p>\n<p>Constructive feedback will also reveal relationship issues that can be addressed in a future collaboration with you or other clients.<\/p>\n<p>You can use the same information because it helps you better understand how the consultant will move through your project. As a result, you will make suppliers more competitive, which will increase the chances of good things happening.<\/p>\n<p>By making your purchasing process better, you can help gather information about the market and its different segments.<\/p>\n<p>Lastly, you can learn just as much as your consultant from feedback about the project. Hearing from your partner about the relationship and its successes and failures can help you figure out what you can do better in the future, which will lead to better project implementation in the long run.<\/p>\n<p>Just asking for feedback will show that you care about good practices, being open, and being truthful.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-48542\" src=\"https:\/\/consultingquest.com\/wp-content\/uploads\/2023\/09\/Steps-in-the-consulting-procurement-process.png\" alt=\"Steps in the consulting procurement process\" width=\"900\" height=\"506\" title=\"\"><\/p>\n<h2><span class=\"ez-toc-section\" id=\"what_you_need_to_know_when_purchasing_consulting_services\"><\/span><strong>What You Need to Know When Purchasing Consulting Services?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>When looking for the best consulting firm to solve a specific problem, it is critical to consider both the problem and the type of consulting firm that would be best suited to solve it.<\/p>\n<p>Moreover, it goes without saying that everyone wants to hire the best consulting service providers. However, your idea of the best consulting partner may differ from that of your competitors. You must create your criteria based on the needs and goals of your project.<\/p>\n<p>When you hire a consultant, you are not simply purchasing a product or service. You are paying for the consultant\u2019s expertise and knowledge. So, when it comes to buying consulting services, there are four important things to keep in mind.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"1_intangibility\"><\/span><strong>#1. Intangibility<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The first thing to keep in mind is intangibility, which makes it hard to know right away what you want to evaluate or how you\u2019d define the RFP. Writing a Request for Proposal (RFP) is hard because you have to think about a lot of different things.<\/p>\n<p>Buying consulting services is not the same as buying a table. When you buy a table, even if it\u2019s a different size, made of a different material, or a different color. It still is just a table, right?<\/p>\n<p>So, when buying these kinds of products, it\u2019s easy to compare the proposals on both the technical and business sides. But when you buy consulting services, it\u2019s possible that they will be very different from what you\u2019ve had before.<\/p>\n<p>And everything you\u2019d expect to see in an RFP, from the overall goals to the deliverables, schedule, team members, and so on, will be very different. So, almost nothing can be used again! You will have to start from scratch.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_impact\"><\/span><strong>#2. Impact<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Next up, is the impact. When you buy consulting services, you expect something fruitful to come out of it. Maybe you\u2019re trying to solve a problem with a consultant who is an expert in that area.<\/p>\n<p>Or maybe you\u2019re trying to improve your business process or build up the efficiency of your team. Whether it\u2019s in the top line or the bottom line, you simply want something substantial to happen, right?<\/p>\n<p>This means that employees, stakeholders, and just about everyone else will be greatly impacted at some point. So, there is a change management part that needs to be added right at the start of buying the consulting service.<\/p>\n<p>If you don\u2019t, you might hurt the chances of success for the project you want to start!<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_negotiation\"><\/span><strong>#3. Negotiation<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The next important aspect is the negotiation. People often use their ability to negotiate and their ability to compare in our everyday life. For instance, if someone wants to buy a table, they will bargain with the seller over the price.<\/p>\n<p>To be successful in their bargain, they will look at the price of the table they are interested in and compare it to the prices of other tables of the same kind.<\/p>\n<p>However, when it comes to negotiating consulting agreement, it\u2019s like comparing apples to oranges. That\u2019s because you\u2019re not just comparing the service; you\u2019re also comparing what\u2019s inside, how they work, and what methods they\u2019ll use.<\/p>\n<p>This makes it different because when you buy a physical product, you don\u2019t care how it was made or anything else. But when you buy a consulting project, almost everything matters.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_true_value\"><\/span><strong>#4. True Value<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Last but certainly not the least, is the true value when purchasing consulting services. Many procurement professionals believe that when buying consulting services, you should focus your efforts on trying to negotiate and cutting down your costs.<\/p>\n<p>But the reality is, whenever you purchase something intangible, whether consulting or not, you are purchasing something that cannot be counted or measured. It could be legal, marketing, or another type of intangible service.<\/p>\n<p>The scope is the part where you actually save money. That\u2019s because you are purchasing time and expertise from skilled consultants, regardless of the size of your project.<\/p>\n<p>So, anything you include in your scope will define how much time, experience, and what type of consulting firm you\u2019ll need to complete the task, and that\u2019s how your fee will be calculated as well.<\/p>\n<p>Identifying the appropriate consultants for your project is essential to ensure that you gain the greatest potential value at the conclusion of the process.<\/p>\n<p>Suppose, for instance, Team A is McKinsey and Team B is a local second-tier business when discussing other consulting firms.<\/p>\n<p>There is about a 50% difference in daily costs. As a result, the price will be determined automatically by the type of business evaluated.<\/p>\n<p>In consulting, we must thus recognize that, in addition to the report, there is value in working with Team A or Team B, which corresponds to goodwill on the balance sheet.<\/p>\n<p>This is not specified in the report or the contract, but it is a reward you receive as a client when you work with top-tier companies.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"a_quick_round-up\"><\/span><strong>A Quick Round-Up<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>That\u2019s it! You now have a basic understanding of consultancy procurement and the various steps that are involved.<\/p>\n<p>Remember, always consult with your internal team and legal department when <a href=\"https:\/\/consource.io\/decision-making-in-consulting\/\" target=\"_blank\" rel=\"noopener\">making decisions<\/a> about which consultancy to work with.<\/p>\n<p>They will be able to provide valuable insights and help you avoid any potential pitfalls. Good luck!<br \/>\n[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n<span class=\"et_bloom_bottom_trigger\"><\/span>","protected":false},"excerpt":{"rendered":"<p>New to consultancy procurement? Dive into our comprehensive cheat sheet designed for beginners. Learn how to navigate the intricacies of procurement and secure the right consultants for your projects with ease.<\/p>\n","protected":false},"author":4,"featured_media":48540,"template":"","meta":{"_acf_changed":false,"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false},"class_list":["post-48538","insights","type-insights","status-publish","has-post-thumbnail","hentry","layout_tag-consulting-industry","layout_tag-consulting-procurement"],"acf":[],"_links":{"self":[{"href":"https:\/\/consultingquest.com\/wp-json\/wp\/v2\/insights\/48538","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/consultingquest.com\/wp-json\/wp\/v2\/insights"}],"about":[{"href":"https:\/\/consultingquest.com\/wp-json\/wp\/v2\/types\/insights"}],"author":[{"embeddable":true,"href":"https:\/\/consultingquest.com\/wp-json\/wp\/v2\/users\/4"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/consultingquest.com\/wp-json\/wp\/v2\/media\/48540"}],"wp:attachment":[{"href":"https:\/\/consultingquest.com\/wp-json\/wp\/v2\/media?parent=48538"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}