Management Consultancy Fees, and I being screwed?
Discussion
I have had a good firm of management consultants come in and look at my departments. They have offered their services to the business for 3 months at a cost of £800/day (total cost £36k) and as far as I can tell this will be one guy working from his office and coming to visit us on regular occasions, but driving change through the business. Now the benefits look good, and I know I should ask for some sort of benefit link salary but they are not willing to look at that, they just want £800/day flat + travelling costs.
I have met with other firms and they all seem the same really with the same cost but just varying degrees of experience. These departments are new to me and the changes seem someehat obvious but I have been told to get someone in, so thats what I am doing!
Am I being screwed over or is this really the cost of consultants?
I have met with other firms and they all seem the same really with the same cost but just varying degrees of experience. These departments are new to me and the changes seem someehat obvious but I have been told to get someone in, so thats what I am doing!
Am I being screwed over or is this really the cost of consultants?
What value are they going to give? £800 is relatively low for an experienced Management Consultant. You could almost double that with some of the bigger firms.
Most of my guys are IT consultants (command lower rates that mgt consultants) and it is very rare that I would let them go for <£750 p/d + expenses where applicable.
Lots of consultancies have been hit quite hard but they are also reluctant to drop their price to what is close to contractor rates (£500 p/d or thereabouts).
Most of my guys are IT consultants (command lower rates that mgt consultants) and it is very rare that I would let them go for <£750 p/d + expenses where applicable.
Lots of consultancies have been hit quite hard but they are also reluctant to drop their price to what is close to contractor rates (£500 p/d or thereabouts).
mybrainhurts said:
I came across a one-woman band who charged £1000 a day to rearrange a factory a year or two ago.
Getting divorced and seeing the half of your factory now controlled by your ex-wife decked out in floral curtains and laid out to the rules of feng-shui, doesn't really count...Extra 300 Driver said:
I have had a good firm of management consultants come in and look at my departments. They have offered their services to the business for 3 months at a cost of £800/day (total cost £36k) and as far as I can tell this will be one guy working from his office and coming to visit us on regular occasions, but driving change through the business. Now the benefits look good, and I know I should ask for some sort of benefit link salary but they are not willing to look at that, they just want £800/day flat + travelling costs.
I have met with other firms and they all seem the same really with the same cost but just varying degrees of experience. These departments are new to me and the changes seem someehat obvious but I have been told to get someone in, so thats what I am doing!
Am I being screwed over or is this really the cost of consultants?
For 45 days work, it is probably fair. ( but i'm biased, I do s ICT consulting I have met with other firms and they all seem the same really with the same cost but just varying degrees of experience. These departments are new to me and the changes seem someehat obvious but I have been told to get someone in, so thats what I am doing!
Am I being screwed over or is this really the cost of consultants?
)Ask for three reference sites, and talk to the references.
You have already found that it is roughly the going rate
Really .... what really really want..... is if these guys can deliver results and the reference sites will help you decide if they are value for money.
Ideally refernces should be of a similar size organisation.
Extra 300 Driver said:
I have had a good firm of management consultants come in and look at my departments. They have offered their services to the business for 3 months at a cost of £800/day (total cost £36k) and as far as I can tell this will be one guy working from his office and coming to visit us on regular occasions, but driving change through the business. Now the benefits look good, and I know I should ask for some sort of benefit link salary but they are not willing to look at that, they just want £800/day flat + travelling costs.
I have met with other firms and they all seem the same really with the same cost but just varying degrees of experience. These departments are new to me and the changes seem someehat obvious but I have been told to get someone in, so thats what I am doing!
Am I being screwed over or is this really the cost of consultants?
£800 per day is cheap as chipsI have met with other firms and they all seem the same really with the same cost but just varying degrees of experience. These departments are new to me and the changes seem someehat obvious but I have been told to get someone in, so thats what I am doing!
Am I being screwed over or is this really the cost of consultants?
That said there is a HUGE difference between cost and value.
As some of the other posters have inferred I would go for a deliverables based contract that will cost you more than £800 per day if they deliver the upside on a sustainable basis.
Most change projects are delivered by people that will steal your watch and tell you the time.
The key difference between change projects is quite simply 'sustainability'
Something like 80% of change projects do not deliver the benefits they claim.
If you fancy a chat to talk through the pros and cons feel free to PM me. I have hired several PM's to deliver change and some have been good but more often than not they do not deliver what they promise.
Having done some change management for my own employer a few years ago, I know that the biggest impact on success is whether the MD of the company wants the place to change. Without board level support nothing will happen easily, hence why the consultants are so reluctant to link pay with performance.
Thanks folks. All good advice, I have already been in touch with one of their previous clients, who happens to be a mate of mine, and he sung their praises.
The really annoying thing for me is that I did an MBA at the Swiss School of Management doing exactly this sort of thing, change management and our mentor was the ex MD of Unilever. He said that unless you’re committed to it, don’t bother; you may as well burn your money.
So it seems the costs are ok, but the contract needs to be performance linked.
The really annoying thing for me is that I did an MBA at the Swiss School of Management doing exactly this sort of thing, change management and our mentor was the ex MD of Unilever. He said that unless you’re committed to it, don’t bother; you may as well burn your money.
So it seems the costs are ok, but the contract needs to be performance linked.
No I don't think you're being "screwed" but obviously it depends on what you're looking for. I'd be happy to talk to you about your project.
The day rate seems on par with the tenders and quotes I've been seeing over the past six months ie. quite cheap!. There is a big difference between IT Contracting Rates and pure Consultancy.
My view with Clients is that they are being charged for "thinking time" and experience, not for delivery and therefore it may be worthwhile looking at the mix of work though I know from our own experience its hard enough pitching for the work at a reasonable day rate and that includes non billable time which the Client invariably feels justified in asking for because they're "paying you so much..."
A Consultant should be used and deliver one of three things.
1. Time
2. Experience (to the problem being addressed)
3. Objectivity
If the Management Team cannot address any of the above then a Consultant can add real value and benefit,( Carr Mngt Cons call this our MBI - Measurable Business Improvement); if they can't then you're just substituting Management for an increased cost and really the Consultant should flag this to the Client.
With regard to linking performance to deliverables I am not suprised that the firm is reluctant to commit because their day rates are very low HOWEVER...... the project plan should be very detailed with milestones and appropriate sign off and this will effectively act as your control mechanism.
Feel free to drop me a line or call for a chat, obviously without stepping on anyone's toes.
The day rate seems on par with the tenders and quotes I've been seeing over the past six months ie. quite cheap!. There is a big difference between IT Contracting Rates and pure Consultancy.
My view with Clients is that they are being charged for "thinking time" and experience, not for delivery and therefore it may be worthwhile looking at the mix of work though I know from our own experience its hard enough pitching for the work at a reasonable day rate and that includes non billable time which the Client invariably feels justified in asking for because they're "paying you so much..."
A Consultant should be used and deliver one of three things.
1. Time
2. Experience (to the problem being addressed)
3. Objectivity
If the Management Team cannot address any of the above then a Consultant can add real value and benefit,( Carr Mngt Cons call this our MBI - Measurable Business Improvement); if they can't then you're just substituting Management for an increased cost and really the Consultant should flag this to the Client.
With regard to linking performance to deliverables I am not suprised that the firm is reluctant to commit because their day rates are very low HOWEVER...... the project plan should be very detailed with milestones and appropriate sign off and this will effectively act as your control mechanism.
Feel free to drop me a line or call for a chat, obviously without stepping on anyone's toes.
Hairy Cornflake said:
£800 / day plus expenses is the going rate.
I charge more that that, whilst I do not give guarantees on the results of my work, no consultants agree to get paid by results, I do expect the client to get a 10x ROI over a year.
Agree - you can't put yourself in the position of being accountable for a situation you can't fully control. Results can be good - I got 3125% ROI for a client last year - so high no-one believes it!I charge more that that, whilst I do not give guarantees on the results of my work, no consultants agree to get paid by results, I do expect the client to get a 10x ROI over a year.
The rate looks OK but I'd want a breakdown of what was going to be done on each day...
Hairy Cornflake said:
£800 / day plus expenses is the going rate.
I charge more that that, whilst I do not give guarantees on the results of my work, no consultants agree to get paid by results, I do expect the client to get a 10x ROI over a year.
Plenty of consultancies will work on results based/contingent fee/gain share models but usually when the scope & KPI's are very tightly defined. Personally I feel they are more suited to spot process improvement rather than larger change initiatives I charge more that that, whilst I do not give guarantees on the results of my work, no consultants agree to get paid by results, I do expect the client to get a 10x ROI over a year.
May sound daft but have you checked whether you can get a Business Link grant?
I run a business consultancy, we registered our service with BL and refer our customers to them, they do a bit of paperwork, pay me 100% of my fee but claim back 50% from BL.
It will depend what type of business you are in and what consultancy support you are looking for but if you can tick the boxes it'll save you a lot of money.
Worth checking.
I run a business consultancy, we registered our service with BL and refer our customers to them, they do a bit of paperwork, pay me 100% of my fee but claim back 50% from BL.
It will depend what type of business you are in and what consultancy support you are looking for but if you can tick the boxes it'll save you a lot of money.
Worth checking.
sploosh said:
May sound daft but have you checked whether you can get a Business Link grant?
I run a business consultancy, we registered our service with BL and refer our customers to them, they do a bit of paperwork, pay me 100% of my fee but claim back 50% from BL.
It will depend what type of business you are in and what consultancy support you are looking for but if you can tick the boxes it'll save you a lot of money.
Worth checking.
That's a very impressive setup! What type of businesses are BL allowing to use this grant?I run a business consultancy, we registered our service with BL and refer our customers to them, they do a bit of paperwork, pay me 100% of my fee but claim back 50% from BL.
It will depend what type of business you are in and what consultancy support you are looking for but if you can tick the boxes it'll save you a lot of money.
Worth checking.
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