Many companies fail to realize optimum value in consulting projects says new study
February 27, 2015
According to a new report by Forbes Insights, in association with North Highland, "Perception Versus Reality: Are You Getting Enough Value From Your Consultants?" a vast majority of executives say their consulting projects have been a success. Yet this level of satisfaction may stem partly from complacence and partly from challenges in defining and monitoring success. A deeper analysis reveals cracks in this pretty picture:• Only half of respondents used the same consultancy again, despite the fact that 92% of executives say the consulting project was successful. This exposes a serious dichotomy between expressed satisfaction and willingness to rehire the same firm.
• Defining and managing the project and its scope was among the most significant challenges for executives. Although the outset of the project is critical to success, just over half (58%) of executives worked with consulting firms on the project's strategic direction before starting work.
• Change management capabilities are lacking, as many consulting firms deliver a PowerPoint presentation and leave the execution to the client. The survey revealed that communicating with internal teams and management is among the top five challenges for consulting firms.
• Companies don't know how to define success for strategic projects, as is revealed by their preferred method of payment. Most companies (59%) prefer to pay without taking results into consideration, whether based on a flat fee or hourly charges.
“This report shows that most companies still have a lot of room to increase the value they get from their consultants,” said Bruce Rogers, Chief Insights Officer at Forbes Media.
“The fact that consulting engagements have a certain level of accepted failure should be a wake-up call to our industry to re-evaluate how we partner with our clients to determine what success looks like. This will enable us to deliver more powerful solutions that are long-lasting and impactful,” said Dan Reardon, CEO of North Highland.
Other key findings include:
• Only 37% of those paying a flat fee say meeting project objectives is a critical success factor.
• Top challenges for consulting firms include changes in scope during the project (34%), communications with internal teams (28%), and project plan and milestones (26%).
• Top internal challenges for companies include resources available to devote to the project (36%), changes in scope (32%) and accountability for project outcome (24%).About this research
The insights and commentary found in this report are derived from both a survey and qualitative interviews. Partnering with consulting firm North Highland, Forbes Insights conducted a survey of 169 senior executives based in the United States and United Kingdom in October 2014. In addition to the survey, Forbes Insights interviewed executives at several large U.S. and multinational companies who successfully manage relationships with consultants.
About Forbes Insights
Forbes Insights is the strategic research and thought leadership practice of Forbes Media, publisher of Forbes magazine and Forbes.com, whose combined media properties reach nearly 75 million business decision makers worldwide on a monthly basis. Taking advantage of a proprietary database of senior-level executives in the Forbes community, Forbes Insights conducts research on a host of topics of interest to C-level executives, senior marketing professionals, small business owners and those who aspire to positions of leadership, as well as providing deep insights into issues and trends surrounding wealth creation and wealth management.
About North Highland
North Highland is a global management consulting firm that delivers unique value, relevant big ideas and strategic business capabilities to clients around the world. The firm solves complex business problems for clients in multiple industries through an integrated approach and offers specialty services via its Data and Analytics, Managed Services, and Sparks Grove divisions. North Highland is an employee-owned firm that has been named as a “Best Firm to Work For” every year since 2007 by Consulting Magazine. The firm is a member of Cordence Worldwide (www.cordenceworldwide.com), a global management consulting alliance. For more information, visit northhighland.com and connect with us on LinkedIn, Twitter and Facebook.