What is a consulting project?
A consulting project is a form of organizing the collaboration between the client and a team of consultants, whose purpose is to solve a key problem facing the client company.
The "key" elements of a consultancy project that are brought to the attention of the client prior to signing the consultancy contract are the following:
- Purpose and objectives,
- The structure of the project,
- Plan and project terms,
- The deliverables,
- Required resources and price offer,
- The team of consultants involved in the project.
The work team within a consultancy project may include not only consultants from the Consultancy Company but also independent experts from different industries and related fields of activity.
The consultants' work within a consulting project is managed by a Project Manager, who is a senior consultant and can hold top positions in the consulting hierarchy (head of department, director, partner). The Project Manager is the "interface" between the consulting company and the client company.
How long does a consulting project last?
The duration of a consulting project usually may be influenced by the following factors:
- Purpose and objectives of the consultancy project
- The quality and completeness of the information presented by the client,
- The way of cooperation and participation of the client within the project,
- The complexity of the business and market model,
- The current workload of the consultant.
Thus, some simple projects can last for 1-2 weeks, others can last for 6-8 months or even longer.
Can a consultancy project be executed within a shorter or even "record" timeframe?
Yes, we can diminish the terms of service execution, but for emergency we usually charge an additional, "emergency fee". We usually work simultaneously on several projects and each emergency project leads to "strain" efforts and resources (eg. work overtime).
We do not run projects in "unreasonable" or "record" terms. The work done in a hurry has a negative influence on the quality of the deliverables (the results of the consultancy project).
I've been thinking about a new business for a long time. I need the support of some consultants to help me analyze all my ideas to sort them out and develop a realistic business plan. I want to do this with a limited budget. Can you help me in this case?
It's Possible. We work with customers in such situations. You will need to do activities that are simpler and that do not require high skill in the field, but that consumes a lot of time (eg some marketing research). Consultex support will be reduced to guidance, methodology, know-how and advice in more complicated cases. The whole activity may take longer than usual, instead you will get a quality business plan at minimal cost.
What does the client have to do to get more value from consulting services?
- Call for external advice only in cases where there is a need for such services, for details go to the “When you need consulting services”.
- Communicate clearly to the consultant, what is the purpose and expectations of the consulting project.
- Ensure that the preliminary deliverables of the consulting project fully reflect the expectations and objectives of the project.
- Provide consultants with the information they need to achieve the project goals.
- Ensure that the company staff understands the mission of the consultants and will not resist the implementation of the consultancy project.
- Where appropriate, involve the company's staff in the activities within the consulting project in order to acquire the necessary skills and knowledge to deploy similar activities in the future.
Can you guarantee the confidentiality of information?
Consultex's responsibility for keeping confidential the customer information is stipulated in the consultancy agreement. The customers can get familiar with the terms and conditions of consultancy agreement concerning confidentiality of information prior to starting their collaboration with Consultex.
For Consultex, reputation is one of the most important assets, that’s why professional ethics, including the confidentiality of information, is one of the company's values.
How are the fees for consultancy services formed?
Some local entrepreneurs have prejudices that consultants are very expensive, which does not allow them to use consultancy services when they need it. This opinion is fueled by the following:
- Consultants fees are often compared to employees salaries;
- Clients do not fully understand the value of consulting services, or to what extent the results of the consulting project will help improve business performance.
- There is a prejudice that consultants fees in the Republic of Moldova are in line with consultants fees in developed countries, which are usually very high (some may exceed € 500 / hour).
Hence, there is a natural interest in the way of setting up tariffs for consulting services. Below we will outline the main aspects that are taken into account in the formation of tariffs for consultancy services.
First, it is important to note that not all the money charged for consulting services constitute the profit of a consulting company. Consultancy, like any other business, involves costs, which must be reflected in tariffs. Costs specific to the consulting business can be divided into 3 main groups:
1) Costs, directly related to providing consulting services:
- Salaries of consultants involved in the consultancy project;
- Independent experts’ fees (in case they are involved in the project);
- Cost of data, obtained from different sources of information.
2) Costs related to mandatory activities, to which the quality of consulting services depend to a large extent:
- Time and money invested by the consultant in their education and skills development.
- Time invested in creating and/or improving new consulting methodologies, services, and products.
3) The costs of consulting business maintenance:
- Costs of promoting consulting services.
- General and administrative costs: office rent, transport maintenance, fuel, office supplies, etc.
Consulting services can not be standardized and/or automated to reduce costs, as other types of professional services. Each consultancy mission is unique in its own way and requires an individual approach. The standardized approach may diminish the quality of consulting services.
Rates for consulting services are usually fixed in man-hours or in man-days. The amount of the tariffs depends on several factors:
- The time required to implement the consulting project (the more time the project takes, the lower the man-hour rate is);
- Complexity and difficulty of the project;
- The brand of the consulting company or the individual consultant;
- The history of cooperation between the consultant and the client (permanent clients usually receive discounts);
- Market price range for consulting services;
- Other factors.
Another important aspect that needs to be taken into consideration when evaluating the consultancy services is the clients expectation for the experience and high level of professionalism of consultants. The clients rightly consider that services, provided by unprofessional consultants, would not provide them the expected value. Considering the above, the experienced and professional specialists can not be attracted and kept by a consulting company at minimum wages.
There are also methods, that can be intelligently used by consultants to reduce the costs of consulting services:
• Efficient time management;
• Distance working;
• Efficient management of consulting projects;
• Using outsourcing opportunities.
From the above mentioned, we can conclude that qualitative consulting services can not be cheap in their essence. On the contrary, the diminished price of a consulting service, may rise suspicions about its quality.
In order to obtain more value from consulting services, the client needs to know when to contact the consultants and ensure that the set of benefits, obtained from the consultancy services, justifies the money invested. Sometimes it is very useful for the entrepreneur to ask himself the question: "How much can I lose if I do not spend an extra dollar?"