Maximizing Your Consultant Engagement Dalip Raheja- The Mpower Group

Transcription

1 Maximizing Your Consultant Engagement Dalip Raheja- The Mpower Group

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3 Sourcing organizations procure a wide variety of professional services. Professional Services Defined The term Professional Services has increasingly come to be associated with different types of consulting. Professional Services can also include advertising, architecture, engineering, legal, marketing, and a variety of other disciplines. Today s discussion applies to any situation where knowledge based services delivered by skilled individuals are being bought and sold. 3

4 Contracting for professional services adds several interesting wrinkles to negotiations. Traditional Goods and Services Positions and interests relatively clear. End states simpler and cast in terms of goods or services received. Specifications are materials based and can be more clearly defined. Professional Services Positions and interests less clear. End states complex and rely on deliverables to generate an outcome. Specifications are a mix of material and knowledge based. 4

5 A wide variety of topics must be considered and covered during professional services negotiations. Reporting Work Orders / Authorizations Work Product Ownership Billing Units Quality Assurance Tools and Knowledge Capital Personnel Warrantees and Indemnifications Project Management Change Orders Pricing Models Customer Satisfaction Governance Qualifications Competitors Subcontracting Overtime Expenses Term and Termination Training International Considerations Risk Sharing Roles and Responsibilities Benchmarking and Audits 5

6 When is a Hamburger NOT just a Hamburger... Hamburger Client Example TCO Best Price Evaluation Product Quality Aggressive Negotiation Rationalize Supply Base Value Recruiting QOWL Employee Retention Value > Cost Business Units ALWAYS place more importance on Value than Cost 6

7 Fundamentals of Value (Sawhney) Customer Defined Opaque Multi Dimensional Trade Off Contextual Relative Mind Set Non-Negotiable Non-Quantifiable Functional, Economic, Psychological Cost - Value Defined by How it is Used Compared to Alternatives Based on a Belief 7

8 What is Your Role? Engagement Fees Value ROI $1,000,000 20X $20,000,000 What should you be optimizing? 8

9 Systems Thinking Best Practices Next Practices Sourcing Provider Management Definition, Review and Approval Sourcing 9

10 Stakeholders Best Practices Next Practices VP Sales Stakeholder s Stakeholders Purchasing BU Owner Finance Stakeholders CIO VP Supply Chain Purchasing BU Owner Finance VP Ops Stakeholders CFO Risk Management Industry / Government Compliance HR Stakeholder s Stakeholder s Stakeholders 10

11 Supplier Evaluation Criteria Long Term Net Impact Criteria Accelerate Benefits Delivery Increase Chance of Benefits Realization Optimize Cost/Risk Sharing Minimize Transition Risks Areas/Categories Weight Competency 27% Change Management Expertise 5% Business Transformation Experience 15% Functional/Business Process Expertise 13% Software Expertise 12% Technology Expertise 14% Industry Expertise 9% Relevant Geographic Coverage 32% Area Subtotal 100% Implementation 26% Transition Approach 29% Program Management 33% Implementation Methodology 24% Effort Estimates 14% Area Subtotal 100% Team Quality 34% Culture Fit 21% Resource Quality 34% Executive Ownership 29% Partnering Ability 16% Area Subtotal 100% Cost/Value/Contracting 13% Risk Sharing 32% Cost Structure 20% Accelerators 25% Deal Structure 23% Area Subtotal 100% Total 100% 11

12 Qualitative Accomplishments Quantitative Accomplishments Increased Chance of Realizing Business Benefits Increase Innovate Benefits 15% Accelerate Benefits Delivery 26% Increase Chance of Realization 33% Optimize Cost / Risk Sharing 14% Transition Risk 13% 12

13 Your Role Best Practices Process Leader Improve efficiency of sourcing function; leverages spend, manages demand, etc. Next Practices Strategic Business Partner Influences key enterprise strategies Internal Consultant Gather requirements, analyze data, identify suppliers and develop strategic supplier relationships and reduce total cost of ownership for the enterprise. Change Agent Influence company s capability to embrace & capitalize on change. Align the organization around the strategic sourcing process 13

14 Target Domains Best Practices Next Practices Foundation Adoption Process Strategy Processes Tools and Templates Information Visibility Metrics/ Reporting Knowledge Management People Technology Organization Technology Talent Alignment Learning Decision Process Learning Environment Business Alignment Change Management Coaching & Mentoring Alignment Execution Implementation Optimization Utilization 14

15 Becoming a Customer of Choice Best Practices Task / Activity level monitoring Invoice checking Shift scope risk to supplier Don t let them loose Source everything Provide SOW then issue change orders Next Practices Value Drivers & Deliverables Trusted partner Supplier is a stakeholder Risk reduction / sharing Knowledge transfer Get the A Team McKinsey factor 15

16 EFFORT Change Management Next Practices Proactive Best Practices Reactive Predictable Inevitable TIME 16

17 People Best Practices Next Practices Recruit/Select Recruit/ Select Performance Evaluation Training Succession Planning Competency Based Talent Management = EBR Performance Evaluation Career Management Competency Development 17

18 Business, Industry, & Enterprise Knowledge Competency Model Framework Competency Development Change Management Client Example Consulting / Problem Solving Innovation Supply Chain Management Strategic Sourcing Negotiations Adoption Adoption Competency Based Talent Management Exceptional Business Results Collaboration Adoption Project Management Contracting Business / Organizational Competencies Strategic Competencies Functional Competencies 18

19 People Best Practices Training Focuses on functional skill building Point in time knowledge transfer Develops individual skills Success is measured by a quiz or survey Practice ends in the classroom Competency Development Next Practices Competency Development Focuses on developing new behavior skill, knowledge AND ability Requires application within context Creates organizational competency Success is measured through demonstrable performance over time Adoption begins in the classroom Course work is modularized Full curriculum can be delivered on-line Course work is integrated Some courses can be delivered on-line Would you rather be here? Or here? 19

20 Context ALWAYS Trumps Content Best Practices Next Practices Content Content You need to own your role and sell it to the rest of your company 20

21 IR - Your Role in the Supply Chain 300X Next Practice 30X Best Practice Presented at the 2015 Investment Recovery Associationn Annual Conference 30X Best Practice 21

22 Investment Recovery What is Your Role? Next Practice Sources of Waste Best Practice Active Sourcing Team member Negotiate Supplier discounts at purchase and they take back at end of life End of Useful Life Influence safety stock levels Increase accuracy of demand planning Move to JIT inventory Review conversion process to remove waste Influence initial design to eliminate waste Identify as early as possible to minimize holding costs Sell at most competitive rate in the marketplace Excess Inventory Process Waste Unavoidable Pure Waste Identify as early as possible to minimize Supply Chain costs Sell at most competitive rate in the marketplace Presented at the 2015 Investment Recovery Associationn Annual Conference 22

23 Decision Model Critical Need / Risks Shift from Tactical Purchasing to Strategic Sourcing Focus on Change Management IT tools & Adoption What is Needed Change Management Process / Skillset Project Management Problem Solving Skills Toolkit Templates Team Building Skills Strategic Sourcing Process Technology Tools Adoption Strategy Etc., Etc., Etc. Do Nothing Rent Build Go-Forward Options Likely Outcomes Loss of Savings / Value Uncompetitive Lose your Best Resources IT Projects Fail Not Your Solution Takes Longer to Grow Expense No Investment Knowledge Leaves No Value Created Short Term Fix Create an Asset to leverage Accelerate & Multiply Investment Embedded Knowledge Competitive Advantage Long Term Value High Risk Continuum 23 Low

24 About The Mpower Group About TMG The Mpower Group is in the business of Mpowering our clients to accelerate Exceptional Business Outcomes by unleashing the full potential of their Supply Chain organizations. We are a global consulting firm dedicated to serving the needs of Fortune 500 Supply Chain organizations. We help our clients by: Accelerating Strategic Transformation: Rapidly move client organizations along The Mpower Group s Supply Chain Maturity Model to peak performance levels. Competency Based Talent Management: Advance the competencies of our clients Supply Chain professionals to World-Class performance levels. Maximizing Deal Value: Help clients realize the full value from large and/or complex deals by focusing on A) Customer Value Drivers before and during negotiations, and B) an adoptable, sustainable implementation once the deal has been reached. The Mpower Group is a World Class Strategic Sourcing & Supply Chain consultancy that delivers big results with a boutique feel. We are Woman and Minority owned The Mpower Group, Inc. All Rights Reserved. Unauthorized Duplication, Storage or Transmission Strictly Prohibited. 24

26 The Mpower Group is a firm with global reach North America Chicago, IL Dallas, TX Houston, TX Long Beach, CA Milwaukee, WI Phoenix, AZ St. Louis, MI St. John's, Canada Toronto, Canada Asia Bangalore, India Mumbai, India New Delhi, India Changwon, South Korea Linyi, China Shanghai, China Singapore Europe Lyon, France Oslo, Norway Prague, Czech Republic Frankfurt, Germany Kongsberg, Norway Konz, Germany Skövde, Sweden Amsterdam, The Netherlands Brussels, Belgium Budapest, Hungary Copenhagen, Denmark Dunfermline, Scotland Eskilstuna, Sweden South America Pederneiras, Brazil São Paulo, Brazil Australia New South Wales Queensland About TMG Delivery is available in a variety of languages including English, French, German, Korean, Mandarin, and Portuguese 2015 The Mpower Group, Inc. All Rights Reserved. Unauthorized Duplication, Storage or Transmission Strictly Prohibited. 26

27 About TMG About The Mpower Group Differentiators Maximum Value Extractors The tools, processes, and infrastructure to help you realize the highest possible return on Supply Chain efforts. Accelerators Next Practices Change Management techniques to address predictable and inevitable speed bumps that slow implementation. Wisdom We sat in your seat as industry executives. Our consultants are senior level resources, not kids with MBAs. We leverage rigorous benchmark studies and research to capture World-Class Best Practices. Transfer of Skills & Knowledge- Ensure successful, sustainable engagements by Mpowering your people to develop and apply World-Class competencies The Mpower Group, Inc. All Rights Reserved. Unauthorized Duplication, Storage or Transmission Strictly Prohibited. 27