Is there a glass ceiling in the procurement of consulting services?

Let’s start with what has been achieved.  Buying and selling consulting services is a vastly different process now to what it was ten years ago.  More rigorous, disciplined and transparent, this new approach has encouraged (or forced, depending on your perspective) consulting firms to put more effort into articulating their expertise and demonstrating their track record and to have a more joined-up attitude when dealing with the biggest organisations.  For some areas of consulting, the role of procurement is now widely accepted, if not always welcomed.  Large-scale, often cross-border technology, process and regulatory-driven change is one such area, as is the use of freelance consultants as contractors and/or interim managers.  While very different types of consulting, both benefit from having a more controlled, standardised approach.

But there are two important areas where procurement has had less success.  The first is where specialist expertise is concerned.  The increasing prevalence and length of ‘second tier’ preferred supplier lists implicitly acknowledges the fact that ‘first tier’ consulting firms aren’t always perceived to have the depth of skills required.  Procurement has a role to play here, helping establish standard contracts and vetting firms’ ability to meet certain qualification criteria, but it’s more of an administrative one.  The drivers behind ‘second tier’ lists are end-users, experts in their own right who know precisely what additional expertise they need and where to find it.  The second is where a consulting firm is been brought in because its brand and therefore recommendations will be accepted and respected by quarrelsome internal and external stakeholders.  This is a fait accompli from the procurement point of view as the choice of firm continues to depend on top-level relationships.

Is it realistic or even desirable for procurement to make a more meaningful contribution to these two latter areas?  Where subject matter expertise is concerned, the answer is probably a qualified yes, but this will require a change in behaviour and focus, with procurement people seen less as gatekeepers and more as market experts and business partners.  But it’s hard at the moment to believe that procurement will ever play a significant role in the last category because of the non-standard nature of the work, the (distressed) circumstances in which such purchase decisions are typically made and the relatively short list of firms likely to be invited to do the work.

The distribution of expenditure across these four areas of consulting obviously varies from organisation to organisation.  For some, the first two categories – large-scale projects and freelance consultants – may account for 90% of money spent putting the procurement team in a strong position.  But in others, the majority of consulting work may involve specialist expertise, making it harder for procurement people to add value.

The key to procurement success – and achievable ambitions – therefore lies in this segmentation, in injecting rigour to the first two areas, market knowledge in the third and staying clear of the fourth.