More Bang for Your Buck: How to Unlock Maximum Value From External Consultants
Retailers are under pressure like never before. The continued growth of online stores such as Amazon.com coupled with rising brick-and-mortar store rents are creating an unforgiving market.
It seems that every week another big brand announces it's closing stores or going into liquidation. The effects ripple across the industry, as the loss of an anchor store in a mall or city center results in lower footfall for neighboring retailers.
In response to the pressures they face, retailers are transforming their businesses — opening new channels, crafting highly engaging customer experiences, and deploying new front- and back-office technology. To get help with these initiatives, they're turning to consulting firms — often signing multimillion-dollar contracts. One example: we recently met with a company for which external consultants represented almost half of headcount. What’s more, 90 percent of retailers say the external workforce (i.e., non-payroll workers and services providers) is important or extremely important to developing or improving products and services, according to External Workforce Insights 2018: The Forces Reshaping How Work Gets Done, a research study conducted by SAP Fieldglass and Oxford Economics. In the same study, 80 percent of retail respondents said the external workforce is important or very important to increasing speed to market.
It’s clear that retailers are spending significant sums on consultancies. However, we think they're missing an opportunity to drive maximum value from their investments. Most retailers typically have only limited, high-level visibility beyond which firm is doing the work and the overall cost of the contract. But they could get so much more.
Imagine if retailers could assess and track the quality of work done by each consultant assigned to them. Or see who is working on each project at any given time. How about if they could measure progress against milestones or deliverables? What if they could see the data and facilities to which each consultant has been granted access? Or if they could record who is worth re-engaging and who is not?
The good news: all of this is within reach. Unlike standard procurement software, sophisticated external workforce management solutions (also called vendor management systems, VMSs) are designed to help companies make the most of their external talent — including services providers. Contracts with services providers (e.g., consulting firms, technology vendors, facilities management companies and marketing agencies) are often handled in the same way a company purchases commodities. Yet people-based services are inherently different, and should be managed differently.
Many companies maintain huge spreadsheets and arrange regular checkpoints with project leaders in their attempts to assess services providers’ progress against plans, determine remaining unspent budget, and pivot spend given changing business dynamics. Wouldn’t it be nice if you could gain all of that insight and more without having to do all that manual work?
External workforce management solutions offer a game-changing opportunity to improve how retailers manage their engagements with consultancies. Consider the following:
- By managing consultants more proactively and effectively, retailers can make the most of these valuable resources.
- Tracking work assignments and progress against milestones helps ensure that projects are completed on time and to a high standard.
- By keeping a central record of consultants’ performance, retailers can ensure they engage the very best people who will add the most value.
- Gaining visibility of data and facilities access simplifies compliance and reduces risk.
The bottom line? There’s a better way to manage people-based services and drive more value from these contracts. By doing so, retailers can achieve a higher return on every dollar they spend.
Molly Spatara is the global vice president of SAP Fieldglass, the market leader in external workforce management solutions.
Molly Spatara is the global vice president of SAP Fieldglass marketing, the market leader in external workforce management solutions.
She seeks to inspire diverse teams with unique skills to develop creative, omni-channel programs rooted in an understanding of customers’ challenges and opportunities to drive measurable awareness, engagement, and preference across all audiences. Research that validates or disputes observations underpins her work.