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Measuring the Value of Consultants

By Mary Yanocha  |  Posted 2010-08-17 Print this article Print

Managers should gather real evidence that consultants are delivering value, and work with consulting vendors to obtain this evidence as a standard business practice.

When managers hire consultants to help them improve their business, they often don’t identify exactly what they hope to achieve and then evaluate whether they got what they expected. That is, they don’t demonstrate the value they’ve realized.

Managers often think that measuring value is a complex task that takes too much time, effort and resources to obtain. Sometimes, the data needed to determine whether value was realized may not exist, or the organization may frown on sharing this type of information with vendors. In those cases, managers may not even try to measure value.

Despite these challenges, managers should make every effort to gather real evidence that value is being delivered and work with their consulting vendors to obtain this evidence as a standard business practice. Demonstrating value should be a partnership, since both managers and their vendors stand to lose if they cannot show that the investment actually made a difference to their business. 

Consulting firms that are confident their services deliver value should capture a variety of measures as a standard business practice. Before an engagement begins, the client should make it clear to the consultant that measuring value is critical. It’s the consultant’s role to work with client companies to identify the expected result that will serve as a benchmark.

Documenting the expected results and the measures used to determine whether those results were realized should serve as part of the consultant’s value proposition. Depending on the length and complexity of the consulting engagement, progress can be measured, evaluated and shared as major milestones are achieved and/or at the conclusion of the project.

The Client’s Role

For clients, it’s important to define what will be measured and why. The desired achievements must be well-defined and conveyed to the vendor up front. If there are outside factors—such as impending management changes that would affect executive support for the engagement or corporate strategy shifts that could affect the performance or continuance of the engagement—managers should discuss these issues honestly with the consultant to make sure they are factored into the equation.

Managers also need to consider what information can realistically be collected to get a baseline measure, show progress while work is ongoing and validate goal attainment. They also should decide how the data will be collected, by whom and at what intervals it will be shared with the consultant to use for measuring.

Once this is established and communicated, managers should hold the vendor accountable for providing a progress report on the promised measurement results.

Next, the client’s managers should share positive measurement results with their internal team as a morale booster and with executive sponsors as credible evidence that the vendor is helping improve the organization. If the results do not meet their goals, managers and the vendor need to openly assess whether and what, if any, course corrections should be taken to remedy the situation.

If a consulting vendor can’t articulate what improvements its contributions have made for its clients, then what would lead a company to hire that consultant? And, if clients can’t justify some level of value in the work they paid for, why would executive management want to continue to provide funding and support?

Demonstrating some level of value doesn’t have to be daunting. It can be as simple as showing an improvement in meeting a project’s milestones where, prior to the engagement, those milestones were not being met. This could lead to improved customer satisfaction, faster time to market and positive return on investment.

The ability to demonstrate more quantitative measures of value can evolve over time. Think about value in a different and more creative way. Make a commitment today to capture metrics that show how the investment in a consulting vendor made a difference to the business.

Common Value Measures

•    Cost savings
•    Time savings
•    Meeting milestone commitments
•    Customer satisfaction
•    Performance improvement
•    Revenue growth
•    Quality improvement
•    Employee satisfaction
•    Risk reduction
•    Return on investment

Mary Yanocha is a managing director at PM Solutions, a project management consulting and training firm in the Philadelphia, Pa., region that focuses on helping clients execute, govern and measure their portfolios to improve business performance. 

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