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AITTM
The Process of Management
Consulting
Module II
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AITTMConsulting Proposals
Identification and Definition ofProblem
Fact-Finding Leading to Solution
Development and Implementation
Developing Strategic and Tactical Plans
And
Subcontracting, Pricing of Consultancy
Acquiring and Developing
Talents for Consulting
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AITTM
PrinciplesThe underlying principles behind the profession of consulting are:
Consulting is fundamentally about change.
The application of a change model that makes sense to theclient as well as the consultant benefits any consultancyproject.
In consulting, the basic steps are common to all assignments.The scale, context and outcomes can always differ.
Any consulting framework can only act as an indicative ratherthan a directive model. Since content and context drives aconsulting project, no two will be the same.
Successful consulting is about making a difference for the clientand consumer. The goal is to deliver a contracted change andnot a successful consultancy project.
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AITTM
7 Cs
The 7 Cs framework is composed of a number of
dynamic stages, each of which emphasizes a
different aspect within the consultancy life cycle.
Each stage depicts a particular phase that a
consultancy project will follow. A set of sub-elements and diagnostic tools are used within
each stage to ease the engagement process. Each
of the stages can be undertaken independently,
jointly or in parallel with each other.
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AITTM
7 Cs
1. Client: Define the clients orientation of the
world, their perception of the situation, theirgoals towards the final outcome and the onewho has the power to influence the outcome.After this stage is concluded, you will have aclear agreement about the value to be
delivered to the client and the value the clientwill offer in return.
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AITTM
2. Clarify: Evaluate the nature and the detail ofthe problem to be addressed. Map the
construction of the system under consideration,
identify the people and resources to be includedand excluded from the change and evaluate
which are the areas that pose a risk for the
assignment.
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3. Create: Make use of creative techniques to
develop a detailed plan that specifies what
actions will be included in the change
process, the appropriate resources, thestream owners and potential change
problems.
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AITTM
4. Change: Grasp the fundamental aspects that
drive and underpin the process, such as the
energy sources, change points, entry levels,
emergent factors and proof of success.
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AITTM
5. Confirm: Make sure that the change has taken place,
taking into consideration the issues of data focus,
ownership, depth, timing and design of the managementprocess.
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AITTM
6. Continue: The change has to be sustained, usinglearning that emerges from the transition, the skills of the
change agents and the sharing of new knowledge and
skills.
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7. Close: The engagement with the client
has to be closed in such a manner that
you emphasize the need to understand
the final outcomes, the added value, newlearning and the further course of action.
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AITTM
Consulting Proposals
Proposals are an important part of theconsulting business. Sometimesproposals serve to introduceconsultants and their services toprospective clients, while other times
proposals serve to finalize thearrangements between a consultantand a client.
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AITTM
Proposals often serve as sales tools and
project planning documents at the same time.
Prospective clients may request a formalproposal in order to compare several possible
consultants, make decisions related to budgets
or scheduling, or simply to collect ideas about
how to solve a particular problem using in-
house resources.
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AITTM
Phase One: Developing the Ideasand Research Team
Tasks:
Refining research questions and specific aims Conducting literature review
Accessing idea consultation
Developing investigative team and roles
Identifying a funding mechanism
Mapping the proposal development time-table
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AITTM
Phase Two: Refining the ResearchPlan
Tasks:
Consulting with funding officers Specifying the research plan & methodology Conducting preliminary analyses or pilot studies Recruiting partners (if needed)
Identifying research services needed for plan Reviewing plan with department head
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AITTM
Phase Three: Refining and submittingthe proposal
Tasks:
Finalizing the work plan and budget
Internal review by colleagues or invited
external consultants
Gathering and finalizing support documents
Format review to guarantee compliance with
funder specifications
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AITTM
Phase Four: Review, revision, andresubmission
Tasks:
Analyzing the reviews discuss with colleagues
Consulting with the funding project officer
Responding to the reviews
Resubmitting
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Key objectives:
To demonstrate a strong understanding
of the client's needs Describe his or her own ability to meet
those needs
Detail a plan of action toward that end
Consulting proposals
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Prior to submitting a proposal, a
consultant needs to gather information
about the company and its problem from
interviews and outside sources
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Many successful consulting proposals aredivided into three sections:
The introduction
The methodology section
The timing and cost section
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The introduction; provides an overview of the proposal
Used to demonstrate the
consultant's understanding of theclient's needs and desired
outcomes
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The methodology section:
Is the main part of the proposal: Specifies the actions the consultant plans to take in
order to provide a focused solution to the client'sproblem
Helpful for the consultant to mention any unique
services or expertise he or she can offer, in order to
differentiate the proposal from those submitted by
other consultants
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The timing and cost section provides:
A realistic and specific fee structure
Schedule for completion of the project
In addition, the consultant may wish to outline what effect,
if any, the consulting process willhave on the client's
internal resources
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How should a proposal be submitted:
Includes a cover letter :
The cover letter, should only be one page in length,describes the contents of the package, highlights
important areas of the proposalincluding how it may
differ from what the client expectedand explains whatthe consultant would like to happen next.
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Necessary attachments:1. A biographical sketch of the consultant, outlining
academic and work experiences, membership inprofessional associations, books or articlespublished,
2. Awards or recognition received;3. A description of the consulting firm's history and
philosophy;
4. A list of current and former clients, especially thoserelating to the prospective client's industry or type of
project; and,5. Anything else that may help the client in the
decision-making process.
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AITTMHow should the proposal be
written?
Proposals should be written in a conversational tone
without excessive use of technicaljargon
with the prospective client's needs in mind The consultant may benefit from keeping in touch with the
client while writing the proposal, as this helps avoidmisunderstandings or incomplete information. If theconsultant receives the assignment, the proposal then
serves as the basis for a formal contract
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AITTM
Although some clients may simply sign the proposal to
authorize the consultant to begin work, many consultants
prefer to clarify the arrangements in a separate document.
At a minimum, the contract should outline the scope of theproject, the consultant's fees, and the proposed time frame.There are several other issues that the consultant may
wish to address, including conflicts of interest,
subcontractors, insurance/liability, expenses, confidentiality,and cancellation.
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Identification and Definition of
Problem
This step entails a clear definition of the problem,opportunity, process or project to be addressed
(measured) in this analysis, without reference tocauses or solutions.
During this step that data is gathered, documented,and analyzed, including the who, what, why, where,when, and the reasons for selecting this problem. It is
critical by the end of this step to identify main (root)causes, particularly as seen from the perspective ofall problem/project stakeholders.
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AITTM
Fact-Finding Leading to Solution Development and
Implementation
Using the data on main (root) causes (not symptoms),
identify an array of changes/actions to help in correcting,modifying, and improving the situation
Identify the chosen solution and describe the methodology
used to arrive at this solution/recommendation
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AITTMDeveloping Strategic
and
Tactical Plans
Strategic Planning Process
Where are we?
What do we have to work with?
Where do we want to be?
How do we get there?
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AITTMTactical Planning
Begin with a clear idea of what your strategic business plan seeks toaccomplish by setting measurable objective.
Draw up a time line to support your tactics.
Establish a budget that supports or exceeds your planned tactical
moves.
List the resources you need to get your tactical plan up and running.
Launch individual tactical efforts on schedule. Launch individual tacticalefforts on schedule.
Evaluate your tactical plans as soon as it's feasible. Use theexperiences--good and bad--as educational tools.
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AITTMSub-Contracting
Subcontracting is a type ofwork contract that seeks to
outsource certain types of work to other companies.
This is a step down from general contracting, which is a
contract overseeing a much broader project in many
cases.
Subcontracting is done when the general contractordoes
not have the time or skills to perform certain tasks.
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AITTMAdvantages of
Subcontracting
Subcontracting offers a number of advantages. First, it allows work on more than one phase of the
project to be done at once, often leading to a quickercompletion.
Second, because subcontractors already have theexpertise and equipment to provide the service, it is oftenmuch cheaperfor them to do the work than a generalcontractor who may not have that special expertise.
Finally, the subcontractor is usually able to work with ageneral contractor on more than one project, thuscreating a savings for both in the long run as arelationship is formed.
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Pricing of Consultancy
Output based
Milestone payments
Time and materials Blended rate
Bonus payment
Reducing price
Gain/pain share
Guaranteed minimum income
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AITTMOutput Based
In an ideal world a buyer would pay a fair fixed price for
the delivery of an agreed final outcome. This method
proposes a payment on delivery of agreed outputs related
to the project client satisfaction with performance; quality
of deliverables; timely achievement of milestones.
However, this arrangement places some risk on the
consultancy which may attempt to build some contingency
into the pricing.
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AITTMMilestone payments
A pre-agreed price is paid after agreed key milestones
have been reached, or a deliverable has been presented.
Consideration should be given to a right to recoverpayments if one or more future milestone(s) or
deliverable(s) is not reached, particularly if it removes the
value associated with previous milestones and
deliverables.
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AITTMTime and materials
As noted previously, this is a very popular mechanism,
placing the majority of the delivery risk with the buyer the
longer the engagement takes the more it will cost. Thismechanism is most suited to short-term assignments or
where deliverables are difficult to define.
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AITTMBlended rate
In this scenario a rate is proposed by the
supplier which takes into account a variety of
factors grades of the consultants, specificexpertise, training days, holidays, length of
assignment, size of commission etc.
This rate could be viewed as the average of the
team.
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AITTMBonus payment
An agreed bonus payment is included which is released
after successful delivery to time and specification.
In recognition of this the supplier should propose areduced fee for the project. The bonus would normally be
linked to the extra value received by the buyer for
receiving the benefit on time as opposed to, say, six
months late.
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AITTMReducing price
A reducing price over time, so that the supplier is
incentivised to deliver to the target date, prior to
the reduction taking effect.
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AITTMGain / pain share
Benefits sharing, or gain share / pain share, where
additional savings or losses made are shared between the
client and consultancy.
This method is more clearly linked to actual value
received / not received by the buyer,(as stated in thebusiness case and contract).
Care should be taken to ensure that any additional
benefits add real value and are not just gold plating.
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AITTMGuaranteed minimum income
The consultancy is guaranteed a minimum financial
volume of work over a fixed period; for example a contract
is awarded to provide all services within a functionalservice area which the buyer will have a regular need for,
over the course of one year, with guaranteed utilization for
the supplier.
This, in turn, enables the supplier to offer reduced prices
based on known utilization.
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AITTM
How much do I charge?
This is the single most commonquestion that prospective consultants ask,
and one of the hardest to answer. The short answer
is a mix of "whatever the market will bear" and "how
busy you wish to be".Some consultants operate ona strictly hourly basis, others on a retainer, and yet
others on fixed-bid contracts none is inherently
superior to any other (though some are more suited
for some kind of arrangements than others).