30 November 2006 | Antony Barton
Almost six out of 10 buyers say procurement consultancies represent value for money, according to the latest SM 100 poll.
Fifty-seven per cent of respondents agreed with the proposition and 36 per cent said they did not. Seven per cent said consultancies offered value to clients "sometimes". The consensus was that consultancies could perform a valuable function but their worth depended on how well they were contracted, how well they were managed and their skill sets. A few respondents said the value of consultancies depended largely on the size of the organisation and its sector.
"A large organisation such as the NHS will struggle to implement the solutions that a consultancy can offer compared with something like a small software company, which is not operating in such a rigid structure," said Sanjeet Manku, contracts officer for East Kent Hospitals NHS Trust. Other respondents, however, questioned the limited and generalised skills base of consultancies as a whole.
Susan Godfrey, buyer PFI healthcare for Haden Building Management, said: "Consultancies do not know your business and so cannot offer anything new. They just tend to restate the 'best-practice' procedures and tactics that can be gained from any good CIPS training course or literature."
The exception, Godfrey continued, would be where a consultancy had specialist experience in a commodity or business sector. When the specialist was brought in for a specific exercise, she said, the brief was usually tighter with added value and risk reduction achieved.
Brian Grew, supply chain director for concert promotion company Live Nation, said a lot of the criticism levelled at the profession comes when consultancy crosses over to executing the recommendations. At that point, he explained, the agreement requires fresh scrutiny to ensure its benefits were visible. This would also guard against the consultancy ending up as project manager, when it may not be best positioned to fulfil this role.
As well as providing a robust brief, respondents also suggested the client and consultancy agree to a clear savings plan, with stage payments made in accordance with reductions achieved.
Robin Hunt, director of procurement for the University of Surrey, said: "Targets should include tangible savings, so your consultants can't wriggle out, and I've no problem with giving them the incentive of a share of the savings in their fee."
Paul Bestford, senior director of strategic sourcing for Wyeth in Europe, the Middle East and Africa, said it was outdated to say that consultancies charged high prices.
He said: "The rates can seem high but they have deteriorated considerably in the past five years. The gap between consulting and industry pay rates has largely disappeared or even reversed."