Supply Side
Procurement of Professional Services – Three BAD Reasons Why Consultants Are Engaged

In our recent article in this series on buying professional services in the public sector, we looked at the different but valid reasons why consulting firms and consultants are engaged by public bodies. The three headings discussed were knowledge and specialist skills; intellectual horsepower and capability; and implementation and delivery of tasks, projects or programmes.

Today we will take a look at some of the less good reasons why consultants are engaged. We would suggest that any procurement professional who wants to get to grips with this spend category needs to understand these well, much as they should understand the valid responses to the “why engage consultants” question.

One reason for engaging consultants that is perhaps more prevalent in the public sector than the private is the delaying effect. Professional services firms – or even individual consultants – can be brought in as a means of prevarication. “We can’t proceed with this plan until we have had it checked out by the consultants”. Firms are happy to oblige; indeed, the longer the assignment lasts, then usually the better for them and their revenues. In the public sector, we see this often when civil servants don’t really want to implement something their political masters demand. Delay it until the next election, perhaps, or until the individual has moved onto another role. Or maybe a delay enables those against the idea to marshal their forces or come up with longer-term objections.

Lack of confidence – it was recently reported in the UK that the Department for Business engaged McKinsey, spending £240,000 for three weeks of advice around their staff reduction plans. Apparently, there was not even a final “product” from the consultants. Rather, McKinsey had various “inputs” during the process of formulating the BIS strategy, according to the Times report. Now whilst of course McKinsey may have brought “knowledge and specialist skills” to the game, this smacked of wanting someone external purely to rubber-stamp internal decisions, and suggests an organisation that may lack confidence in its own abilities or not trust the judgement of its own staff. However, getting a professional opinion on an issue may be sensible risk management; and using outside skills to break through a problem in internal decision-making can be a sensible use of consultants. This all makes it hard at times to determine where sensible risk management stops and this lack of confidence starts.

The professional services firm as scapegoat: most of us with a few years in the business or public sector worlds will have seen this, we suspect. It comes about when the organisation needs to do something difficult or where the likelihood of failure is high. Engaging professional services support – often management consultants – provides an internal manager who is worried about the outcome with good cover, just in case the end result is not successful. Post-failure, the classic excuse is then heard in the boardroom: “Well, the consultants said we should do it”. While such action is understandable, using consultants to protect individuals within the organisation does not add real value from a shareholder or taxpayer point of view.

The most common driver of professional service misuse in the private sector is perhaps pure egotism, although we suspect this is actually less prevalent in the public sector. But some purchasers or users of professional services appear to simply gain enjoyment from having intelligent and expensive staff at their beck and call. They may perceive that arriving at a meeting with “their” big consultancy strategy partner in tow gains them prestige amongst their peers. And having said this is less common in the public sector, I do remember a fully uniformed and fully-formed Army general turning up for a meeting with me about budgets and procurement improvement plans for the military. He arrived at the UK finance Ministry with his scrawny but very smart McKinsey partner in tow, who did most of the talking.

But again there can be a positive side – many senior people value having a trusted adviser whom they can use as a sounding board. But hiring advisers just to massage egos is not a good use of public money.

(The material in this series is in part based on the book “Buying Professional Services – How to get value for money from consultants and other professional services providers” by Fiona Czerniawska and Peter Smith, published by the Economist Books and available here).