Question: How much can you save by using 2nd tier consultants?

Answer: £6 million*

*Clearly that’s a dirty big asterisk, right? Well, yes. And no. Here’s how we worked it out:

Fees
Independent research shows that consulting fees for 2nd tier firms are anywhere from 20% lower (graduate consultants) to 60% lower (partners) and are typically, for junior and senior consultants, 45-50% lower. Let’s be conservative and say there are savings of 40% to be had out there.

Of course it’s not always appropriate to use smaller firms; in many cases the scale, scope or nature of a project simply requires a big, global firm. But in where this isn’t the case, and you can get the same job done by a smaller firm, there may be some very interesting opportunities.

The savings
If you were to use 2nd tier firms in 15% of cases (where you don’t already), and apply the 40% savings rate to this spend, then the figures already start to look very interesting. Assuming a spend of £100m, you’d save £6m. Or 6% of your total spend, to put it another way. I’ll leave you to do the maths; £100m may be more than you spend (in some cases it’s probably considerably less), but on the other hand you might think the 15% is a little pessimistic. The point stands: where it’s appropriate to do so, using 2nd tier firms could save you significant amounts of money.

Of course the main barrier to use of the 2nd tier tends to be a lack of knowledge about the suppliers, their capabilities and their reputations, but (and I’ll say the next bit quietly, so as not to appear too brazen) this is exactly where Source can help. Brief us and we’ll find the right supplier to match your requirements, giving you, if nothing else, the confidence that external validation of your supplier decisions brings.

If all of this sounds a lot like me suggesting I can reduce your consulting spend by 6% then in fact I think I’m saying something more: you could make this kind of saving without using consultants less. Without achieving less.

Too good to be true? My finger’s twitching desperately over the asterisk button again at this point, but I’m going to resist.