How to reduce consulting spend?

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Case Interview consulting spend Cost reduction cost saving

Neue Antwort am 15. März 2021

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Anonym A fragte am 11. März 2021

I was recently asked a case question surprisingly on reducing consulting spend.

Your client is a F500 company in financial services. The client has signed a Master Service Agreement (MSA) with BCG back in 2018. Various lines of business of this client have engaged BCG in last two years and they signed their scope of work with BCG under MSA. The client has come to you and asked how the client can reduce its spend on consulting services? What levers you will analyze and more importantly how? what data you will need to conclude each of the levers?

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Answer 1

Beste Antwort

Adi

Experte

Content Creator

antwortete am 11. März 2021

Accenture, Deloitte | Precision Case Prep | Experienced Interviewer & Career Coach | 15 years professional experience

Hey, do you want to post your solution here for us to comment? Best way to learn..

If you need a nudge to get started, think about following aspects (and add more from your thinking):

Move to partnership based model i.e have one or two consulting partners do strategy->operations->execution
Get procurement involved to build a preferred consultants list i.e 20% consultants cover 80% of the requirements
Bring back work in-house
Stronger SLA and performance management i.e tie payments to value delivered

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Answer 2

Udayan

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Content Creator

antwortete am 11. März 2021

Top rated Case & PEI coach/Multiple real offers/McKinsey EM in New York /12 years recruiting experience

There are many ways they can do this

Reduce the scope and renegotiate based on the new scope
Reach out to competitors for alternative bids and prices and use that for re-negotiating rates
Hire consultants in-house to reduce spend on external vendors
Outsource the business units that require most consulting work (if that is a possibility, especially for non core work)
Make it difficult for individual teams within the company to hire consultants by creating a complicated approval process

There are many ways to reduce spend, any of the above or other relevant answers would suffice

Udayan

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Answer 3

Antonello

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antwortete am 11. März 2021

McKinsey | NASA | top 10 FT MBA professor for consulting interviews | 6+ years of coaching

Hi,

you can improve your negotiation skills, insource some area covered by consultants, change firms or simply use less consulting services with a 80-20 approach to understand what really matters

Best,
Antonello

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Answer 4

Ian

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Content Creator

antwortete am 11. März 2021

Hi there,

You could use the classic Project Management Triangle: Cost, Scope, Quality, Time.

Since they want to reduce cost, they'll have to ask for less, accept lower quality, or allow for things to take longer.

https://en.wikipedia.org/wiki/Project_management_triangle#:~:text=Project%20Constraint%20Model-,Overview,produce%20the%20project's%20end%20result.

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Answer 5

Gaurav

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antwortete am 15. März 2021

#1 MBB Coach(Placed 750+ in MBBs & 1250+ in Tier2)| The Only 360 coach(Ex-McKinsey + Certified Coach + Active recruiter)

Hey A!

To add to what colleagues already mentioned, it would be great to:

Measure the performance of the consulting services
Try to use demand management
Take the tail spend into consideration.

Sounds good? If you have any questions - just reach out!

GB

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How to reduce consulting spend?

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