As our economies and industries evolve to take on expansion, challenges and market demands, there is a growing need for services that will facilitate operation in such a sophisticated and evolving environment. These services are generally provided by consultants or consulting firms—businesses where one or more experts (consultants) provide advice to an individual or organization in a particular sector/area of expertise for a fee. In Nepal, the business of consulting is not new, but has grown into a market that is more consolidated and competitive. In recent years, there has been a shift from hiring individual consultants to hiring consulting companies that are more focused and domain-specific.
What is the advantage of using consultancy services from a company versus an individual? An individual lawyer providing advice for a fee is a consultant but the same advice sought from a legal firm is a consultancy service sought from a company. The key advantage in hiring a firm versus an individual is the value for money that is being provided in terms of institutional knowledge and vast years of experience (man years) of the institution. It also provides a one-stop solution by providing access to a pool of different resources/specialists. There is also the aspect of assurance and timely completion of tasks and activities, as hiring a firm mitigates many limitations of an individual consultant.
As the consulting industry becomes more popular, “Bodyshopping” is a model that is picking up pace. In this kind of set up, an umbrella company—usually established firms with operations in multiple countries—puts together a team of individual consultants for the client. These consultants are on the payroll of the company and not the client. The effectiveness of this modality depends entirely upon the adopted practices between the company, consultants and the client in terms of collaboration and exploitation. The difference between collaboration and exploitation can be huge. Collaboration between the three or between any two parties (consultant–client, company–client, company–consultant) is an investment in improving collective knowledge and performance. There is increased value for the client with the synergy and benefits provided through collaboration. However, if the collaboration is merely about boosting revenues from properly sold engagements, there is a compromise on the quality of deliverables and possibility of conflicts (dissatisfaction with the parties), which would ultimately undermine client expectations.
The consulting industry has devised several models for operation as it tries to fit into the procurement practices of mainly public and development consulting engagements. In the private and personal arena, procurement for consultancy services is largely based on relationships, comfort and network. Standard procurement guidelines follow scoring based on the company’s experience and team composition, of which, a significant portion of the score, about 35-40%, is allotted to the company’s experience and 25-35% to the proposed team members and the remaining for methodology etc.
Bidders for such services can generally be broken down into the following categories:
- Big company with big names pooled in to create a team (Biggies)
- Collaboration of two young companies based on Synergy (Collaborators)
- Individual company (Individual)
When technical proposals are evaluated, the Biggies tend to receive a higher score because of the weight of experience portrayed. The Collaborators rank second due to their joint experience and the individual company third. When it comes to the evaluation of financial proposals, the Biggies and the Individuals tend to be more competitive. Biggies tend to encash on higher technical scores and low operation costs as most of their consultants tend to be individuals. Individuals will quote lower bids in order to improve their scores and chances of winning. For collaborators, their financial proposals tend to be either high or medium in cost. As such, it is either the Biggies or Individuals who bag the project when the averages of technical and financial proposals are taken into account. The only issue in this is the level of commitment and effort in delivery of the level of effort and how it impacts quality.
When the assignment is delivered by Biggies, it is usually conducted using prescribed methodology and is process-oriented. The delivery of Individuals, on the other hand, is impacted by their limited capacity and resources. Collaborators—who bring in the synergy of both worlds—are not engaged. Nonetheless, in the midst of all of this, the consulting business is said to be safe as services come to an end with a prescription of recommendations. If the recommendations are adopted and they work, fantastic! If they don’t, there can be a hundred different reasons why they failed. Therefore, getting solutions is only the first step and should be followed by implementation and evaluation to ensure value, effectiveness and assurance. These are expensive services and should be pragmatic in yielding results and not just be treated as a wealth of information that are never put to use.