Good to Know: Why Companies need Consultants (GTW Tips #10-092716)
GOOD TO KNOWCONSULTING
Shyam Rao
9/27/20169 min read
They need third opinion
You know how sometimes when you are dealing with an issue in your life; you turn to friends and family for their opinions? Likewise, companies need this, too, especially when are in trouble or want make tough decisions. Quite often, clients knows on how to solve their problems which they are facing but want to make sure that what their line of thinking is correct (or that they aren’t so close to the challenge that they’re missing the obvious answer). Therefore, they turn to consultants to come in and provide their opinion. Because consultants often work with many different companies and may have worked through this problem in the past with someone else, they can really provide a perspective based on what they have seen work (or not) before. In addition, given this experience, they can often bring new and innovative ideas or possible challenges to the table that clients probably would not have been able to see on their own.
They have to focus on daily operational
Sometimes the problems companies need solving is important, but they do not necessarily have the work force to focus on them. Companies still have to focus on their day-to-day operations. However, hiring new employees to fill these gaps does not always make sense either. In instances like this, consultants serve as temporary, highly skilled employees. We are not full-time employees of the company, so it is often cheaper to use us than hire someone new. Because consultants switch around companies often, we are used to the fast learning curve, and on boarding us is easier and, by using consultants, companies do not have to pull their employees away from their actual jobs.
They look for expert advice
Another, and perhaps the most common, reason that companies hire consultants are to gain access to a specialized skill sets and knowledge that might not exist in house. By engaging a consulting firm, they get access to a group of professionals that has skills ranging from process design to finance organization structures. These highly specialized people would not only be expensive to hire for, but the company might not have enough work to keep said employees busy year round. However, consultants, companies can bring in that skill set on demand when they need it.
They find difficult to take decision
Sometimes, companies find it hard to make decisions without emotions or politics. Therefore, they bring in consultants to provide an unbiased opinion. Consultants really support companies in many ways and as a consultant; you need to dig into many tough situations. It is not easy work, but for problem-solvers consultant like me, it is exciting work.
10 Reasons Your Clients Need You.
To obtain specific expertise. Clients typically hire people who have the skills and expertise their own staff lacks, so it really pays to have a record of accomplishment that speaks for itself.
To identify problems. Sometimes employees are too close to a problem inside an organization to recognize it. That is when a consultant rides in on his or her white horse to save the day.
To supplement a company’s internal staff. Sometimes business executives discover they can save thousands of dollars a week by hiring consultants when needed rather than hiring full-time employees. They also can save additional money because consultants do not need benefits. So even though a consultant’s fees are generally higher than an employee’s salary, over the long haul, a consultant tends to be a less expensive option.
To act as a catalyst for change. No one likes change, especially corporate. Nevertheless, when change is needed, a consultant generally can do things without worrying about the corporate culture, employee morale, or other issues that tend to elicit high emotions and dissention in the ranks.
To be an objective onlooker. Besides seeing problems from a different perspective than internal staff does, a good consultant provides a fresh, objective viewpoint, and then delivers results without being concerned about what workers in the organization might think about the results and how they were achieved.
To teach. If you have special skills and knowledge, someone will pay you to pass on that knowledge. As a result, it is very important for you to stay abreast of advances and developments in your chosen field so information which can be passed on to clients knowledgeably and authoritatively.
To do a company’s “dirty work.” Let us face it: No one wants to be the person who has to make staff or program cuts. An impartial outside consultant is the perfect person to handle such unpleasant tasks.
To bring new life to an organization. Many consultants are retained as idea starters and innovative thinkers. If you are a subject matter expert who can think on your feet, you can help a company retool or reinvent itself.
To assist with a business launch. Business development consultants are in high demand by entrepreneurs and visionaries who wish to leave the groundwork–and grunt work–to someone else. In this role, a consultant may also assist with the day-to-day operations of the new venture.
To share contacts. If you know the movers and shakers in business, or have big business or manufacturing contacts abroad, someone will probably want to tap into that knowledge.
Although you can consult in just about any field these days, business consulting says that the types of consulting businesses that are thriving today include:
Businesses of all sizes–and especially small businesses–need everything from bookkeeping to tax preparation, making this a solid career choice for a new consultant.
An advertising consultant may be needed to develop strategic ad campaigns, write copy and make ad buys.
Widespread corporate downsizing has created a need for consultants who can help job seekers reinvent themselves, polish their resumes, and otherwise make them irresistible to employers.
Computer consulting. Consultants who are well versed in web page and blog development, software and hardware installation and troubleshooting, internet marketing, and other things cyber-based can build a viable business.
From finding scholarship money and advising kids who are writing their college applications to assisting school districts with budgetary issues and other matters, an education consultant may find themselves in great demand these days.
Executive search. No matter whether the economy is in recession or booming, recruiters are always in demand.
Human resources. Corporations often need help with personnel issues like conflict resolution, violence in the workplace, sexual harassment awareness and other people matters–not to mention those downsizing issues mentioned earlier.
Advising people about their insurance needs and finding the best policies at the best price remains a field with strong opportunities for new consultants.
Fresh ideas on how to manage a business better are always in demand, especially when a company is facing challenging economic times.
Public relations. Companies thrive on press coverage that puts them in the best possible light, and the consultant who has the tools and contacts to get such coverage can be invaluable.
Other fields with strong possibilities for fledgling consultants include corporate communications, graphic design, editorial writing, marketing, motivational speaking, payroll management, strategic planning and tax advising.
How to Choose a Consultant
What is the Problem that needs to be fixed?
Addressing this question sets the stage for determining the terms of reference and helps your organization clearly state what needs to be done. Only when this is accomplished can you proceed.
Do We Really Need a Consultant?
Before hiring a consultant, ask yourself if you can do it yourself, or if other help is available?
Can We Do it ourselves?
Once you have answered the first question, you must decide if the people in your organization can do the work.
Making the Decision
After looking at what you have within organization, and the kind of help you can get from outside sources, you may decide that you need the services of a consultant. You should hire a consultant if:
no one in the organization has the time or expertise to do the job
you tried previously to do the job (or a similar one), and failed to achieve the desired results
the organization is likely to value a consultant’s recommendations or solution more than its own
you need specialized help and advice
If you decide to hire a consultant, your next job is to find and choose the right one.
Finding the Right People
Here are some ways to find consultants:
Ask around – word of mouth across your industry is still the best way to get information on many things, including which consultants have done good work in the past.
Rehire a known consultant who has done a similar or equally difficult job or ask a consultant you trust for a referral.
Use lists of qualified experts – you can get these from professional organizations, colleges and universities, government agencies and volunteer groups.
Contact consulting companies – do internet search or look in the yellow pages of the phone book under consultants.
Advertise in local or regional newspapers – briefly outline the job you want done, and ask consultants to reply if they are interested.
Keep a file of resumes from people who have expressed interest in working with your organization. You never know when another situation may arise that finds you looking again.
Choosing the Best Consultant
Leaders in the organization, project supervisors could serve on a selection committee. The selection committee may be involved in the following aspects of selection:
Making initial contact. Send the potential consultants the terms of reference.
Requesting proposals. The proposals should outline how consultants would meet the organization’s goals or objectives and carry out the work. They should include qualifications, costs, and projected days or hours to complete the task. If the consultants ask for more details on your project, the committee should arrange to meet with them.
Assessing the proposals. In assessing these proposals, the organization looks at how the consultant intends to meet the needs of the organization, the consultant’s qualifications and the estimated cost. Sometimes it might be helpful to score the proposed ability of the consultant to do the job separately from their cost estimates. That way neither part influences the scoring of the other.
Choosing a short list of four or five of the best people or firms from those who send in proposals.
Interviewing the short list. The organization should focus on the consultant’s technical expertise, knowledge of the organization, and the proposed fee. Depending on the size of the contract, it may be possible to conduct the interviews by teleconference, although meeting in person is always preferable.
Checking references. The best references come from people and organizations for whom the consultants have worked. Look at the final reports of similar projects that the consultants have carried out.
Choosing the consultant. If you follow this selection process, you are likely to find qualified people – people who will work to meet your needs, and deliver a useful report, recommendation or suitable consultation process or other product or service at a fair price.
Estimating Costs
The fees that a consultant charges to do a project or other job may vary from one consultant to another. To determine if the fee a consultant quotes is fair, consider the following:
The going rate for providing similar services. (Professional associations often have recommended rates that consultants follow.)
limits that funding agencies place on consultants’ fees
the consultant’s area of expertise, experience, skills, reputation and knowledge
the consultant’s expectations concerning workload and completion time for the project
benefits to the organization – short, medium, and long-term
the finished product – the kind and amount of data, reports, plans or systems produced
The training the consultant will provide to organization members.
Note that the consultants are responsible for the cost of preparing their proposals and attending meetings to discuss their ideas with the selection committee.
What The Contract Should Cover
The contract should include:
the names and responsibilities of the client and consultant (who does what)
fees and payment schedules
other costs
deadlines
what the consultant is expected to deliver or produce
who owns what the consultant produces
to whom the consultant’s report or other material may be released
level of confidentiality expected
if it is acceptable for the consultant to sub-contract
This is only a basic list of what you should put in a contract to avoid problems later. Use your judgment in deciding what else you should include.
Paying The Consultant
Everything in the following list should be included in the contract:
Fees: All contracts should clearly set a maximum amount for expenses and for the entire job.
Method of payment: Contracts should state how you would pay the consultant.
Progress payments: Progress payments are made when the consultant has completed a specific task or reached a given point in the job. Usually, contracts provide for progress payments if a job is a large one or will extend over a number of weeks or months. Be sure to make a progress payment only when the consultant is entitled to them.
Advances: Advances are paid to consultants only to cover out-of-pocket expenses. You never pay the consultant’s fees in advance.
Penalties: Sometimes a contract provides for a penalty if the consultant fails to meet deadlines either for particular parts of the contract, or for completing it. Usually you will charge the consultant an amount of money for each day, week or month, etc. that he or she is behind a deadline.
Getting Started – Describe The Project
You begin by sending the consultant the terms of reference.
Choose A Project Leader
It is a good idea to choose a leader to manage the project. The project leader is the link between the consultant and the organization. Both the project leader and the consultant should meet often and regularly to review progress and to keep track of expenses. The project leader also meets regularly with organization members to let them know how things are going.
Responsibilities of the Organization and the Consultant
If the consultant and the organization work together, the results of the project will better meet the organization’s goals and produce lasting benefits for the people within. There should be chart to shows what the organization and the consultant should do to help make the project a success.