Most major companies could obtain significantly more value for less expenditure without endangering the positive working relationships on which effective services engagements depend.
The challenge for you as a buyer of professional services is to create a careful balance between good relationships, good contracts and good process management.
We work at board level, with procurement and finance functions, and with other senior executives in the main functional areas of the business. Our skills and breadth of experience ensure that public and private organisations optimise their expenditure on professional services, and that the selected providers can meet the most demanding requirements.
We are a totally independent benchmarking firm with an exemplary track record in assisting clients in multiple sectors to improve their return on professional services. We are staffed by people who have experience on both the buying and selling sides – in many ways “poachers turned gamekeepers” – and with the skills to deploy proven best practices in the procurement and management of professional services.
Overall, our benchmarking services in this area optimise the benefits to be obtained from professional services suppliers, both commercially and from a relationship management perspective.
Typically, our major clients can achieve a 5-30% improvement in bottom line costs from appointing us to undertake Professional Services Benchmarking. On budgets running into hundreds of millions, that’s a very welcome outcome.
Our benchmarking approach helps companies create visibility of expenditure and value for money from the use of different types of services and service providers. A typical benchmarking engagement could look at overall effectiveness of expenditure on one area, such as consulting services, and recommend new ways to improve cost effectiveness. It could also look at overall expenditure on all types of professional services procurement.
Our approach reduces project cost overruns and ensures that competent service providers are used for the right level of work.
Typical results from this type of study are identification of 10-25% reductions in professional services spend and identification of multiple opportunities to improve value for money.
Our benchmarking services are designed to help individual company buyers of professional services to obtain the right contracts, prices and service levels. We also help to interpret the sales strategy of the providers, including what is and is not bundled into the overall set of services.
These types of engagements draw on our extensive expertise in a wide range of projects, and we can cite numerous successful examples in which we helped a department head or project manager to procure the best provider for a clearly defined, watertight set of services. In some instances, this involved replacing existing suppliers, and in such cases we provided appropriate counselling support.
One of the most valued services we offer is totally customised benchmarking of the capabilities, value and service levels of professional services providers. We maintain a unique and constantly-updated database of rates charged by the world’s most respected providers for their full range of consultancy services.
Our benchmarking service also enables us to monitor client perceptions of the skills of individual suppliers, in many cases down to the competence of individual consultants. This greatly benefits our clients when considering the most appropriate supplier for particular projects, saving them time and other resources on generating a short-list.
In all cases, we maintain the strictest confidentiality.
We never publish off-the-shelf reports on fee rates and suppliers, and our clients are never given direct access to our database. This is because, without our expert analysis, the raw data can be misleading. Similarly, we never disclose confidential or commercially sensitive data to other professional services providers.
Our substantial value-add lies in the expertise we bring to bear in analysing the state of the market at any given time and in recommending which suppliers and fee rates should apply to particular engagements. That way, our clients receive the most accurate recommendations on the most appropriate suppliers and fees and can always negotiate from a position of strength.
It is inevitable that a percentage of projects will go off track or even turn into outright runaways.
Our specialist“back-on-track” services help our clients recognise which projects are already failing or at risk, and provide clear insights into what can be done to retrieve them. This is about providing rapid solutions to problems; it is not about apportioning blame. The key to “back-on-track” effectiveness is to identify problems early, to fix them fast and to develop strategies for ensuring they remain on course until they reach their intended conclusion.
Since our clients will make extensive use of providers of professional services over many years, it makes sense to embed a culture of procurement excellence amongst their people. Fulcrium has a range of training courses and software tools to help organisations build a culture of procurement excellence internally. On numerous engagement, we have increased the motivation and effectiveness of in-house staff by supporting them to become better managers of external service providers.
Obtaining best value from IT consultancy is one of the most challenging areas for end-user procurement functions. The supplier market is in a constant state of flux with established providers exiting or changing direction, and new entrants coming on board.
In-house procurement functions are frequently confused as to the relative value of a low fee rate from an offshore provider and a higher fee rate from a locally-based one.
By exerting their substantial buying power offshore suppliers can also push fee rates to unsustainably low levels and compromise the outcomes of the project(s).
Fulcrium’s unique database of suppliers is constantly updated with new information on the skills, performance, cost structures and fees of the major IT consultancies.
This intelligence enables us to advise end-users on the most appropriate suppliers for a particular project and to establish fair fee rates that do not endanger the future of the suppliers in this highly competitive market.
Working at board level in many cases, we are also able to provide a totally independent view on external suppliers and overcome some of the obstacles to appointing them. For instance, an in-house IT function may act as a gatekeeper to prevent a suitable supplier from being appointed.
Our evaluation of the company’s requirements, coupled with sensitive handling of any in-house objections, can frequently lead to a fast-track solution to a seemingly intractable IT problem. Conversely, we can also evaluate whether a company needs to deploy external IT consultants at all, by re-assessing the criteria for particular projects.
A major commercial client asked Fulcrium to evaluate the value that was being obtained from an incumbent supplier and to assess whether or not they should be deployed on a strategically critical SAP implementation. We knew from our extensive in-house benchmarking and intelligence on commercial rates for SAP projects that the incumbents were quoting some 30% higher than best in class providers. Despite these high fee rates, they felt secure in their position as preferred suppliers.
Because of our independence and our unique, comprehensive database, we were able to provide a coherent business case for using an alternative supplier. This was not something that could be initiated internally by the client themselves. In this instance, we were able to act as catalysts for positive change that benefited the client through better commercial terms and also by appointing the optimum supplier for the specified project.
If you need to optimise your return on Professional Services expenditure and think Fulcrium could be your “secret weapon”, contact us now.