by Charles R. McConnell

When it comes to making important business decisions sometimes you need the help of an outsider and that's when a consultant comes in handy. By providing an external perspective, consultants are usually able to focus attention in a manner that clarifies objectives and renders them more achievable. They are frequently helpful in refining a company's mission and redefining its niche in its industry.

Consultants can be useful for several reasons. Perhaps expertise not present among employees is needed to address a particular problem. In this case a consultant serves a specific purpose and then leaves when his or her work is done. In this manner a consultant is a cost efficient alternative to the costs of recruiting and orienting someone who may no longer be needed after the job is finished.

Also, organizational changes that potentially alter departmental boundaries and areas of responsibility are sometimes best approached from the perspective of an outsider who is unfettered by internal politics and existing relationships. After the consultant recommends and helps implement certain changes managers could be spared the full weight of responsibility for unpopular but necessary decisions. Sometimes consultants are used to do work for which regular employees do not have time thus helping to dispose of task bottlenecks and activity peaks.

There are two broad categories of consultants: process and expert.

• Process consultants typically possess general knowledge about organizations and their industries; they are hired to address a variety of general issues. Variety of knowledge and experience are their strengths. Most management consultants can be considered process consultants.
  
  
  
• Expert consultants bring specific training or experience into their client companies; they are hired for their specialized knowledge. Examples include such consultants as human resource experts who may be engaged to redesign a benefits program and information technology experts who may be brought in to develop an automated accounting system. It's necessary to fully understand your business' needs before actually contacting potential consultants. Once the type of consultant has been decided upon prospective consultants can be identified.

For a consulting engagement of any appreciable scope it's advisable to prepare a request for proposal (RFP), a detailed description of the potential project before seeking an individual consultant or firm. The RFP should include an overview of the company and its structure. The request should outline the problem and state why it's a problem, and include what's expected of the consultant and a potential starting date. The RFP will be used by potential consultants to generate their proposals.

Consultants are identified by several means. Word of mouth is typically a reliable method. Local universities often have faculty members with the desired expertise. Most reputable consultants belong to professional associations which also can provide leads. Once you identify two to four potential consultants present each with an RFP and ask them submit proposals.

When you select a consultant your contract should include details of the proposed work, a timetable for completion, all anticipated costs and a means for evaluating progress. Large engagements often require several people to perform the work. These individuals should be identified and agreed upon in advance of contract signing.

A consultant's progress must be regularly monitored to prevent unexpected problems for the business. Regular meetings provide an opportunity to identify related or unanticipated issues. All involved parties should strive to minimize or eliminate surprises except perhaps in the nature of findings and conclusions.

Trust is essential to a successful consulting relationship. Successful consulting relationships are brief partnerships, and trust and sound working relationships are only the beginning. All parties must fully understand their roles and responsibilities as well as the expectations of the other partner.

For a successful consulting relationship, don't forget these fail safe tips:

• Define the problem or issue to be addressed, especially mindful of its scope and boundaries.
  
  
  
• Investigate the expertise of the potential consultant.
  
  
  
• Talk with previous clients, look into completed projects, and assess the education and experience of the consulting staff.
  
  
  
• Know the consultant's fees and how they are determined (hourly rates, fixed fee or other arrangements).
  
  
  
• Establish the responsibility for expenses, determining in advance who pays for what and what expenses are included (for example: travel, lodging, food, etc.).
  
  
  
• Determine a payment schedule.
  
  
  
• Determine what documentation is required of the consultant and the frequency of reporting.
  
  
  
• Specify limits on the scope of service or length of engagement.
  
  
  
• Before signing a contract, define objectives, set standards for evaluating progress and identify deliverables (reports, systems, etc.).
  
  
  
• Identify reporting relationships.
  
  
  
• Establish the means for early termination of contract by either party should this become necessary.

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