Consulting services are experiencing rapid transformation and growth in response to a new demand: data analytics. It becomes possible due to the vast amount of data recorded during the project plant life cycle and its ultimate transparency.
The relationship between a client and a consultant is not merely a transactional exchange of services for money; it's a dynamic trust-based partnership that significantly influences outcomes.
When mutual trust exists, clients are more likely to be transparent about their challenges and concerns and more flexible in negotiating the consulting agreement.
The biggest contributors to building trust are the consultant’s competence, integrity, and communication skills; they often lead beyond what is captured in a scope document. One such point is knowledge transfer.
Mutual trust is the only way to compensate for the inevitable scope ambiguity of consulting services and arrive at a “win-win” agreement.
Trust rooted deep into personal relationships is what differentiates consultant relationship management (CRM) from those of OEM suppliers, contractors, and clients. Unlike purchasing equipment or subcontracting work, consulting services are personified – the business seeks to hire a specific person to execute the specific assignment.
The scope clarity of consulting services and the risk tolerance of both sides dominate in selecting a payment method.
Billing hours
The consultant quotes an hourly rate, a minimum amount of billing hours, and an advance payment as a percentage of the minimum amount. Despite its simplicity and popularity, this method introduces a high risk of a consultant being underpaid, and it contributes to the erosion of trust.
Fixed price
The consultant quotes a single, all-inclusive price for a service, regardless of the hours spent. This is common when the scope of work is clearly defined.
Retainer Agreement
The client pays a fixed monthly fee for a predefined amount of the consultant's time or ongoing access to their expertise. It works well for temporary hires bound by a project duration. The client might overpay if they don't utilize the full retainer.
Value-based/Success Fee
A portion (or all) of the consultant's fee is tied to specific, measurable outcomes or the value they deliver. This could be a percentage of cost savings, a decrease in the project schedule duration, or better quality of product. Due to a time gap between order completion and an outcome assessment, it might take longer to receive payment. Additionally, its fairness may be questioned if the client is unwilling to share sensitive financial data.
Why are Engineering Consulting Services (ECS) an inseparable part of desalination companies engaged in the megaproject construction?
They are lean and lack the engineering resources sufficient to execute a mega-project every 3-5 years. After its award, the project execution starts with a hiring spree. It subsides after the engineering and management teams are increased by 50 – 100%.
As the mega-project engineering and management are not tailored to remote work, the said increase is predominantly covered by local resources. With the widening talent gap and workforce attrition in the water industry, this business strategy introduces permanent risk into the project execution.
Another source of risk is the broad range of the ECS task classes that do not depend on company size. The order-of-magnitude weight percentage of classes in the ECS package is given below. These classes are well covered with the first three payment methods mentioned above.
- Quality assurance (30%)
- CAD and drafting services (20%)
- Project management support (20%)
- Procurement (10%)
- Auxiliary systems engineering (10%)
- Environmental and geotechnical studies (5%)
- Engineering calculations and math modeling (5%)
The last and the biggest source of risk is a possible leak of business information or an idea mining when working with global consultants. They may identify conflicts or opportunities that the client might not have initially articulated or even recognized, and turn them into a new service globally.
De-risking project execution is a main objective of the CRM framework being under development by Crenger.com. Given its deep integration with the other management systems, it prioritizes the following points.
- Contact Management stores and maintains consultant information - name, contact details, domains of expertise, and social media handles.
- Account Management addresses the consultant business details covering ESC transactions and the terms of the non-disclosure agreement (NDA).
- Status Management tracks consultant availability, eligibility, and current activity. It focuses on the following question. Is the consultant working for competitors? Is the NDA still valid and match the work scope? Can the resource demand be satisfied if a project is awarded tomorrow?
- Order Management streamlines the creation, sending, and tracking of requests for quotation, quotes, and orders.
- Unsolicited Quotes Management accepts, sorts, and selects the best business proposals from consultants.
- Data Security Management tracks consultant access to sensitive information, blocks access to non-essential documents, and controls what other users can see and do within the system.
- Shared Calendars and Tasks keep the project team and consultants aligned on appointments, deadlines, and responsibilities.
- Lead Management captures, tracks, qualifies, and enrolls new consultants using leads from various web sources.
- Knowledge Base helps consultants find the company standards and practices applicable to a specific domain of expertise and answers to common questions.
- Feedback and surveys gather insights from the customer personnel to rate consultants and improve their services.
- Analytics and Reporting rate the results of consulting services and provide consulting KPIs and success metrics.
- Predictive Analytics (AI-powered) forecasts the consultant rate attrition and the probability of the ECS success for a bidder.
- Workflow Automation manages consulting task progress, outstanding issues, and approvals.