Getting consulting spend under control is all about changing buying behaviors in the organization. And the reason consulting is usually not on procurement's radar is because there are sometimes hundreds of different buyers/decision-makers of consulting services throughout the bigger (Fort 1000) organization, making behavior modification quite difficult. In other words, it is easier for procurement to focus on bigger spend categories where there are only a few decision-makers - IT hardware, paper/print/postage, software licensing, real estate, etc. Makes sense really, until the economy or your business turns south and you are forced to look to indirect/services spend for additional savings.
There is no quick fix for getting consulting spend under management, unless of course you have a CFO or other c-level exec that is willing to drop the hammer to make it happen. But, if the CFO was that interested in this spend and has a hammer dropping management style, then I suspect he/she would have instituted disciplines long before now and the spend would not be so out of control. This is not an uncommon situation at all, it is a normal part of the procurement maturation process.
Controlling consulting spend takes time, patience, thick skin, a streamlined process truly based on business need, great customer sourcing service, grounded analytics, reportable data, a savvy internal PR approach, some kind of control point with the AP / PO system/process, and at least some executive air cover for those in the procurement trenches working to do so. It doesn't have to take 3-4 years like it did me, but getting it totally under control and starting to deliver some strategic sourcing benefits will take 12-18 months or more. There is no 'easy button' for this one.
If you have no process or tool in place right now, then it is critical to put something, anything in place to get you in front of at least a few SOWs. And when you do get those initial chances, you need to deliver at the transaction level. Then you need to tout the savings and the diversity of solution options your competitive sourcing process produced. In other words, you need to sell your services, sell your value-add every step of the way. You have to convince and show managers, decision-makers that they will benefit when they engage you BEFORE they engage the vendor. They won't believe it until you show it to them. Don't forget about turnaround time: $100K consulting engagements can't take 30-60 days to source. No matter how much savings pleasure you can deliver, it will not compare to the perceived pain of a long, bureaucratic process.
Strategic sourcing of professional services (ie significant savings) cannot be achieved until you have put the basics in place, primarily an effective engagement model between your internal customers and you. Once you have that problem solved, then all the cool stuff that us procurement professionals like to do - volume build, supplier consolidaiton, strategic vendor management, category consolidation or restructuring, rate card negotiations, etc - will actually work. Trying to go strategic without the proper blocking and tackling is a classic cart before horse situation and ultimately may do more harm than good. Not to mention drive you nuts. Take it from one who learned the hard way. ;)
Good luck, Howard! Let me know if I can help.
Michael
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