Consulting Category Management 2009: Trends & Best Practices
Monadnock Research (VIII N1) - 1 January 2009
Sourcing and Procurement Perspectives from Seven of the World's Largest Management and IT Consulting Clients. Monadnock Research conducted a number of interviews with consulting category management executives at leading organizations during 2009. This 60 page report provides details on the trends, best practices, and strategic priorities at 7 organizations with leading consulting category management practices. The report also provides details on the Monadnock Research Value Leadership Framework for consulting category management. Category managers interviewed include: The Vice President of Global Procurement, the Director of Professional Services, and the Consulting Category Lead of a Fortune 100 international provider of property, casualty, and life insurance services. Based in the US, these individuals have responsibility for global management consulting services spend. The Vice President of Global Strategic Sourcing for a Fortune 500 international provider of mutual funds and investor services Based in the US, this individual has responsibility for global spending on consulting services, and also has vertical responsibility for the category globally. The Senior Director responsible for sourcing and procurement of consulting and professional services at one of the world's largest biomedical and pharmaceutical companies. Based in the US, this executive has responsibility for the global consulting and professional services category of spending. The Sourcing and Procurement Manager for Consulting Services at a Fortune 500 multinational consumer goods company. Based in the US, this individual has responsibility for North American consulting spending. The category leader for management and IT consulting services at one of the world's largest software companies that controls more than $1 billion in annual consulting spending. The Global Head of Category Management, based in Europe, responsible for global professional services spending at one of the world's largest and best-performing financial institutions, currently operating in more than 170 countries globally. This Research Note is the first of our Consulting Services Sourcing & Procurement Insight Series, where we interview leaders of global procurement organizations and discuss consulting category management best practices. The Director of Indirect Spending at a Europe-based provider of communication technologies, applications, and services, with approximately 78,000 employees globally. Based in the US, this leader has responsibility for America's spending on professional services, and also has vertical responsibility for the consulting category globally. Purchase report
Table of Contents
INTRODUCTION - 4
TRENDS, BEST PRACTICES & STRATEGIC PRIORITIES - 5
Consulting Client Decision Maker Priorities - 5
Consulting Category Management Priorities - 6
CONSULTING CATEGORY MANAGEMENT - 7
MONADNOCK RESEARCH VALUE LEADERSHIP FRAMEWORK - 7
Stage I: Transaction Executers - 7
Stage II: Policy & Process Builders - 7
Stage III: Sustainability Managers - 8
Stage IV: Value Leaders - 8
SOURCES OF POTENTIAL SAVINGS AND UNTAPPED VALUE - 8
CONSULTING CLIENT 2009: TRENDS & BEST PRACTICES - 9
PROPERTY, CASUALTY & LIFE INSURANCE - 10
Trends - 10
Consulting Category Management Maturity - 11
Engagement Value and Preferred Providers - 12
Contracting and Compliance - 13
Maverick Spending - 14
Consulting Alternatives - 15
Charge-Back Schemes - 16
Management and IT Consulting Spending - 16
Top Consulting Services Procurement Errors - 16
Consulting Category Management Challenges - 17
The Executive Champion - 18
Advice to Companies Just Starting Out - 18
Changes Consulting Marketing Practices and Compensation Schemes - 19
Procurement Group Structure - 19
PHARMACEUTICALS & BIOMEDICINE - 20
Trends - 20
Consulting Category Management Maturity - 21
Forms of Engagement Value - 21
Policies, Procedures, and Practices - 22
Demand Management - 22
Alternatives to Consultants - 22
Consulting Agreements and Statements of Work - 23
Consulting Spending - 23
Consulting Category Management Challenges - 23
Maverick Spend - 24
Discounting - 24
Advice to Organizations Launching Consulting Category Management Initiatives - 25
Shifts in Firm Marketing Approaches - 25
Organization Structure - 26
CONSUMER GOODS - 27
Trends - 27
Consulting Category Management - 28
Forms of Value Beyond Price - 29
Policies, Procedures, and Practices - 29
Project Performance - 30
Consulting Agreements and Statements of Work - 30
Consulting Spending - 31
Consulting Category Management Challenges - 31
Building Consulting Industry Expertise - 31
Project Compensation Arrangements - 32
New Consulting Opportunities for Firms - 32
Organization Structure - 33
MUTUAL FUNDS & INVESTOR SERVICES - 34
Internal Consulting Organization - 34
Analysis of Competitive Bids - 35
Consulting Category Management - 36
Contracting Strategies and Getting More Value from Engagements - 37
Demand Management - 38
Vendor Rationalization: Preferred Consulting Providers - 38
Firm Performance Management - 39
Consulting Spend Analysis and Analytics - 39
Common Errors Made by Sourcing Professionals - 40
Procurement Challenges - 41
Reigning-in Maverick Spend - 41
Changes in the Way Firms Market Services - 41
Consulting Trends - 42
Procurement Group Structure - 42
HIGH TECHNOLOGY - 43
Trends in Demand Internally for Consulting Services - 43
Consulting Project Value - 44
Alternatives to Consultants - 44
Consulting Agreements - 44
Consulting Category Management Challenges - 45
Changes in Consulting Services Sales Techniques - 45
Emerging Service Opportunities - 46
Procurement Organization Structure - 46
FINANCIAL SERVICES - 47
Trends in Demand for Consulting Services Internally - 47
Managing Internal Demand for Consulting Services - 47
Consulting Category Management Maturity - 48
Engagement Value - 48
Policies, Procedures & Practices - 48
Alternatives to External Consultants - 49
Consulting Agreements and Performance-based Fee Arrangements - 49
Contracting Mistakes - 50
Category Management Challenges - 50
Emerging Service Areas - 50
Procurement Group Structure - 51
COMMUNICATIONS - 52
Trends and demand for consulting services - 52
Consulting Category Management Maturity - 52
Engagement Value - 53
Consulting Alternatives - 54
Contract Terms and Conditions - 54
Consulting Category Management Challenges - 54
Changes in Firm Marketing Techniques and New Service Areas - 55
Procurement Group Structure - 56
MONADNOCK RESEARCH PUBLICATIONS AND SERVICES - 57
RELATED READING - 58
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