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Capturing and managing by-pass spending ("maverick spend") on consulting services is a significant challenge for most global sourcing and procurement organizations. But controlling spend in other procurement categories is generally met with much less resistance.

Complexity of this service area combines with a dynamic participant marketplace, and the political influence of decision stakeholders, to set consulting apart from other procurement areas. Understanding the consulting category and its many facets and history is crucial to building an effective program to minimize maverick spend on services.

This Research Note presents our perspectives and observations on best practices, and our findings from a recent Monadnock Research study on the practices of twelve organizations representing an estimated $7.6 billion in spending on consulting services annually.

Table of Contents

EXECUTIVE SUMMARY 1

MAVERICK SPEND: UNDERSTANDING THE CATEGORY IS KEY 3

CONSULTING SPEND MANAGEMENT 3

COMPETITIVE BID POLICIES 4

POLICY AWARENESS 5

EXECUTIVE SPONSORSHIP 6

PROCESS AND COMPLIANCE 6

TRACKING MAVERICK SPENDING ON CONSULTING SERVICES 6

PENALTIES FOR NON-COMPLIANCE 7

First Offense 7

Second Offense 7

Third Offense 8

Fourth Offense 8

CONSULTING CATEGORY MANAGEMENT 9

CONSULTING CM ORGANIZATION 9

PROCUREMENT RESOURCE SPECIALIZATION 9

PROMOTION OF CAPABILITIES AND CONSULTING CM PROGRAM TO INTERNAL CLIENTS 10

PROMOTION OF CONSULTING CM PROGRAM BENEFITS TO FIRMS 10

MUTUAL BENEFITS OF COOPERATION BY FIRMS 10

PERCEIVED RISKS OF FIRM COOPERATION WITH CLIENT CONSULTING CM EFFORTS 11

STAFFING CHALLENGES 13

SKILLS 13

RESOURCE CONSTRAINTS 13

TECHNOLOGY SUPPORT 14

CONSULTING CATEGORY CHALLENGES AND OPPORTUNITIES 15

MODERATE SPENDING IN A COMPLEX CATEGORY 15

DYNAMIC SERVICE MARKETPLACE 16

THE FIRM PRINCIPAL - CLIENT EXECUTIVE RELATIONSHIP 17

INTERNAL CONSULTING CLIENT PERCEPTIONS 18

STUDY METHODOLOGY 19

RELATED READING 20

INTELLECTUAL PROPERTY NOTICE 21

DISCLAIMER 21

The Report is 21 pages in length. Delivery is via PDF. Procurement organizations receive an enterprise license for unlimited internal distribution and use. Consulting firms may purchase, but license is conveyed exclusively to the individual purchaser unless otherwise authorized by Monadnock Research in writing. Transfer of the license to other named firm representatives will be authorized under certain circumstances. Firms should call for an enterprise license quotation, or for IP rights transfer.