Financial and Commercial Services HIRE OF MANAGEMENT IT/IS CONSULTANTS

Transcription

1 Financial and Commercial Services HIRE OF MANAGEMENT IT/IS CONSULTANTS

2 Table of Contents Contents INTRODUCTION DEFINING MANAGEMENT CONSULTANCY KEY SUCCESS FACTORS THE PROJECT APPROACH TO HIRING A MANAGEMENT or IT/IS CONSULTANT... 4 PREPARE A BUSINESS CASE AND SEEK APPROVAL... 4 APPOINT A PROJECT MANAGER... 5 RESEARCH THE MARKET FOR PROSPECTIVE CONSULTANTS... 6 SEEK TENDERS... 6 SELECT THE BEST VALUE... 6 ESTABLISH A CONTRACT... 7 MANAGE THE CONTRACT... 7 IMPLEMENT THE RESULTS OF THE CONSULTANCY

3 INTRODUCTION The purchase of the services of a consultant should be approached as carefully as the purchase of any other service. Just as we would not hire a window cleaner unless we know the price and know exactly what is on offer for that price, so we should know what consultant s charge and what is on offer. External consultants can contribute significant added value to the University by helping in the following ways: Independent Review. Providing an external professional view on a particular issue, bringing experience from other sources. Strategic Advice. Making recommendations on future strategic direction. Participation in a joint team. Bringing technical skills or project management expertise to support or lead an in-house team. Catalyst for Change. Bringing skills in management processes and organisational development to stimulate internal change. Counselling. Providing high level advice from an acknowledged expert. Implementation. Giving temporary injection of skilled resources for planning and executing tasks, or designing procedures, processes and systems. To take advantage of this added value it is essential that: Consultants are used only where they can add value well in excess of the likely fee; The work required of the consultants is properly defined; and The right consultants for the particular work are selected. This Guidance provides best practice at each stage of the consultancy process. Heads of Department, budget holders, purchasing officers and others responsible for designing and implementing changes and new programmes should use it to ensure that they get the best value for money when hiring consultants. 1. DEFINING MANAGEMENT CONSULTANCY To make full use of this Guidance it is useful to define the categories of external consultancy. The general definition of an external consultancy can be broken down into three sub sets. 1.1 External Consultancy: Investigating problems, providing analysis or advice, or assisting with the development of new systems, new structures or new capabilities within the organisation. 1.2 Management Consultants: This service provided to business, public and other undertakings by an independent and qualified person or persons in identifying and 2

4 investigating problems concerned with policy, organisation, procedures and methods recommending appropriate action and helping to implement these recommendation. 1.3 Technical Support IT/IS Systems: These are specialised staff normally hired by Learning Support Services or MIS to help to develop IT/IS systems. (NB Work on IT strategy would be categorised as management consultancy) 1.4 Consultants in Other Specialised Disciplines: These would include Estates and Buildings works consultants (architects, engineers, surveyors), legal advisors, accountants, VAT consultants, and similar specialists. Although this Guidance is designed mainly for use in the hire of management consultants and IT/IS systems consultants, much of the content applies equally in the hire of consultants in other specialised disciplines. The following are not considered to be management consultancies: 1.5 Staff Substitution: The use of staff from other organisations or companies on work which is the normal ongoing business of the University where the need arises because there are insufficient in-house staff. The need may include responding to periodic peaks of established work. 1.6 Contracted Services: 1.7 Agency Staff: Temporary and clerical staff employed on an agency basis. 1.8 Continuing Routine Services: Continuing and clearly defined routine services from an external provider on the basis of a contract of specific duration. This could include such services as gardening, maintenance (electrical, plumbing, decorating, etc.) and catering. 1.9 Research: Any services purchased from a research budget or grants which are formally identified within the research project. (This Guidance may nevertheless be suitable for hiring such help). 2. KEY SUCCESS FACTORS Nine critical success factors have been addressed effectively: 2.1 Seeing consultants as a potentially valuable, if costly, resource; 2.2 Using them only on matters of real importance to the University; 2.3 Using them only where management is committed to bringing about change 2.4 Being clear why they are being used, and indentifying the work that needs to be done; 2.5 Making sure that the problem cannot be solved in-house or in some less expensive way; 2.6 Selecting the right individuals at the right price; 3

5 2.7 Managing consultants effectively and working closely with them; 2.8 Implementing the results of their work; and 2.9 Assessing the value for money derived from the consultants work, and implementing any lessons learned, at the end of the assignment. 3. THE PROJECT APPROACH TO HIRING A MANAGEMENT or IT/IS CONSULTANT Consultants are expensive. Their fees can be high and the implementation of their recommendations can have substantial cost or savings implications. Much of the lifetime cost/saving of hiring a consultant can be improved by approaching the task as a project using the stages as set out below. As consultants are usually required in connection with a particular project or initiative the hiring of a consultant is really a project within a project. This process can and should be interesting, and can be done quite quickly. Above all, it is the way to ensure that the consultancy makes a real value-adding contribution to the management of the University. The stages are: PREPARE A BUSINESS CASE AND SEEK APPROVAL If you are responsible for investigating a problem, developing a system, or creating a new structure or new capabilities within the University, you may feel you do not have the necessary expertise or experience to do some or all of the work; or you may think the task needs to be looked at from a wider perspective. These thoughts will at first be general but they should be examined more closely and the extent of any help you may require must be properly defined. The more conscientiously this is done the greater will be the added value. In effect, you will need to prepare a business case. The business case will spell out the purpose, benefits to the University, and likely costs of an external consultancy project and will incorporate the following key elements: The purpose of this assignment; The expected benefits (expressed in monetary terms where possible) and when they are likely to accrue; The risks in the project, and who will be responsible for controlling/managing them; The expected deliverables; The proposed project management arrangements; The proposed division of work between consultants and in-house staff; The expected costs of the consultancy and the in-house workload; An assessment of any alternatives to an external consultancy; How any recommendations will be implemented. 4

6 In-house Solutions. Hen considering the need for consultants, and when preparing the business case, you should think carefully about other ways of solving the problem. Could the work be done as effectively and more cheaply by using University staff or by recruiting extra staff on short term contracts? You may even consider seeking a secondee from another institution or organisation. Consider first what expertise and advice are available in other departments in the University Finance Office, Purchasing office, Estates and Facilities, Research Office and other departments within CCS. By all means seek advice from expert staff in academic departments but, as a general rule, teaching and research staff should not be diverted from their main duties to work on other projects. The business case should be approved by a senior member of staff and preferably the budget holder who should: Confirm the importance of the problem which has been identified; Assess the overall commitment of the University to the success of the project, including the commitment of the key managers involved in it; If satisfied, endorse the commitment of the key officers involved; Ensure that all options, including the use of in-house resources, have been considered; Assess the quality of the business case and thus decide whether the project is likely to deliver good value for money. Signed approval must be given by the budget holder before a consultant is hire. If you are responsible for the budget as well as for hiring the consultant you should seek the written authorisation of a more senior member of staff. This in line with the standard requirement for separation of responsibilities. APPOINT A PROJECT MANAGER Ownership of the project should be at the highest level consistent with that person having the time and vested interest in ensuring the successful completion of the project. This may be at Vice Chancellor or Head of Planning Unit level. This person, who would ideally countersign the Business Case, should appoint a Project Manager and define the Project Managers role. The Project Manager should: Have good project management skills, or be given adequate training in this respect; Have a sound knowledge of the requirement and, in this context, be responsible for drafting the detailed specification; Be able to spend sufficient time on the administration and management of the project, and with the consultants while work is in progress; Have authority to call upon other members of staff for co-operation and/or information; Have good communication skills; 5

7 Work closely with the Purchasing Office with regard to tendering, contract and other administrative matters relating to the selection and management of the consultants. RESEARCH THE MARKET FOR PROSPECTIVE CONSULTANTS Where particular firms have done previous similar work for the University and done it well thy should normally be on the tender (or pre-selection) list, together with other known reputable firms specialising in the particular subject matter of the consultancy. The Purchasing Office hold a comprehensive directory and can help to provide additional names. It is good practice to consider unknown firms, perhaps selected from the consultancy director. However, they should not actually be invited to tender without first asking them some openended questions about their experience in the relevant area. References should be sought and taken up by telephone. Tenders should not be sought solely from four of the major, well known consultancy groups. It would usually be appropriate to include at least two less expensive firms who can often give a more specialised and more personal service. SEEK TENDERS It is recommended that for the hire of consultants there should be no more than four, unless the contract value exceeds 150,000. This is to reduce the cost of the tendering exercise. For consultancies likely to cost between 50,000 and 150,000, tendering should either be restricted to four firms or should consist of two stages: Write to about 6-8 firms setting out the project specification and asking them to submit brief proposals explaining why they should be invited to submit formal tenders; The tender evaluation panel assess the quality of the response by the 6-8 firms and agrees a list of the best 3-4 firms to whom formal invitations to tender will be sent. In preparing the ITT and managing the tender process the following factors should be taken in to account: Allow firms sufficient time to prepare tenders; Tailor procedures to the complexity of the project to ensure that the cost of tendering is appropriate to the value of the project; Offer firms briefing about the specification and the underpinning purpose and objectives of the project before proposals or tenders are submitted. Remember that the Purchasing Office and/or the Planning Unit or Departmental Buyer can help with the procedures. SELECT THE BEST VALUE Before sending out the ITT a tender evaluation panel should be selected. It should include at least the Project Manager and possibly a qualified member of the Purchasing Office staff. For 6

8 higher value projects the project sponsor, and possibly an end user of the results of the consultancy might also be added. Tenders and interviews should be assessed against clearly defined and weighted criteria which link the technical quality of the submission, the personal attributes of individual consultants, the resources of the firm and he quoted price to enable a clear value for money decision to be reached. Remember to consider expenses as part of the overall cost, travel and subsistence can often cost more then the daily fee. What is a day? It is important to clarify seemingly small details. References should be taken up (best done by telephone) before confirming selection of the preferred consultants. If required, post tender clarification and negotiation with the preferred consultants should also take place before confirming selection. The Purchasing Office may be involved in post tender negotiation and clarification, and under no circumstances should the process be used to give one firm an advantage over another, for example by conducting Dutch Auctions. The Project Manager should be prepared to debrief unsuccessful firm after the selection process has been completed. ESTABLISH A CONTRACT The model ITT should be scrutinised with a view to adding or deleting any special requirements to cover the unique nature of the particular consultancy. If there are any doubts about the content of, or changes to, the ITT, the Purchasing office should be consulted. The model terms will have been issued with the ITT and tenderers will have had an opportunity to say they are unwilling to accept some or all of the tender. Experience shows that even the largest consultancy groups are willing to accept our terms of contract rather than to insist on using their own and thereby possibly losing the contract. The contract should be signed by both parties before work commences. MANAGE THE CONTRACT There are few, if any, consultancy projects where it is best to leave the consultants to get on with it. Often the largest costs are incurred at post tender stage, usually through a combination of poor contract management and / or thin or poorly thought out specifications. The Project Manager should be attentive to the following: That he/she should be personally accountable for the success of the project in terms of: Obtaining from the consultants all of the deliverables defined in the contract; Ensuring that the results are pertinent to the aims and objectives of the Project; Ensuring that the consultancy runs on time, within cost, and to an acceptable standard; Where scope for skills transfer has been identified, that practical arrangements are made for this to occur, and for these arrangements to be rigorously monitored; 7

9 That an appropriate action must be taken where, for whatever reason, the consultant s performance is unsatisfactory; That it is important to create close and collaborative working relationships between consultants and the University staff; That, at the end of the project he/she should complete a project assessment; That he/she formally signs off the consultancy project on completion That he/she confirms in writing that they are satisfied that the consultants have properly discharged their responsibilities under the contract before final payment is made; and Confirm in writing that any additional payments requested over the limit of the originally contract price reflect additional work, and price, agreed in writing before that additional work was commenced. (Note: Project Managers need to be robust in rejecting requests for additional time and or payment unless the additional work undertaken is clearly a change to the original contract specification). IMPLEMENT THE RESULTS OF THE CONSULTANCY The benefits to the University of employing consultants come not from their work in designing a new information systems, or from their analysis of a problem and the production of a report, but from implementing the system or their proposals and bringing about necessary change. Before a consultancy project is formally brought to an end the Project Sponsor should ensure that there is: An appropriate action plan for implementing the results; An accountable action manager ; and Effective arrangements for monitoring implementations. The Project Manager should complete a project assessment report covering: The conduct of the assignment; The quality of the analysis and recommendations; The extent to which the original purpose and the desired benefits have been, or are likely to be, achieved; Any additional benefits derived; and The overall cost of the assignment, covering both payments to the consultants and full inhouse costs. 8