- 05
- NOV
- 2010
Getting over the challenges of buying Professional Services
Author: Maggie Slowik - Categories: Supplier Relationship Management, Risk
When professional services comes up within the procurement community, it tends to be the elephant in the room: everybody has at least one bad story to tell. Yet, on the other side of the spectrum, the professional services industry is a thriving and highly competitive market.
In their recent publication Buying Professional Services: How to get value for money from consultants and other professional services providers, authors Fiona Czerniawska and Peter Smith uncover the reasons why professional services are accompanied by a negative stigma. First and foremost, they argue, they are substantially different from buying any other kinds of products or services. All professional services are knowledge-based and serve the needs of the buying organisation, which is created by the lack of internal skills and capacity. However, since these needs differ from organisation to organisation, the services rendered can range from being intangible and hard to measure (too often the case) to those with a transparent and concrete output (not often enough the case). To further complicate matters, they vary in the amount of time they take to carry out and produce results. End result: a disillusioned client.
The PIU delved deeper into this issue in its current white paper on professional services. The topic is close to our hearts as a research organisation because our membership community identified it, on more than one occasion, as a key challenge and driver for further research. In this whitepaper, we discuss the complexities that surround the buying of professional services and in doing so, we draw from the results of a Management Consultancy Workshop we ran back in May in London.
Why management consultancy of all types of professional services? Because the reality is, it tends to be one of the, if not the, most challenging of all professional services, and if we understood its intricacy well enough, our conclusion would be easily transferable to the industry as a whole.
The workshop brought together practitioners from large global companies to collectively share their knowledge and jointly examine the issues that need to be addressed in order to maximise the value delivered from management consultancy work. The challenges that made it to top of the list were poor internal stakeholder behaviour, lack of (early) procurement involvement and and poor scoping practices.
Despite these challenges, buying professional services does not have to be procurement's worst nightmare. In fact, one of the recommendations we make in our white paper is that both buyers and service providers need to develop agreements that foster a productive relationship. For the buyer, this means adopting a balanced management approach that embraces these three factors: cost, productivity and duration.
