Measuring Success: A Review of ROI Analysis of Consulting Services

How are modern consulting firms measuring value for their clients? 

Consulting services may be seen by some consultants and clients as having an inherent immeasurability in terms of hard metrics. It may be difficult, for example, to truly measure the mathematical value of coaching a group of managers on new management techniques. In light of the current trend, however, of some clients seeing consulting services within a transactional (rather than a business relationship) framework, consultancies are being asked for their ROI projections. Accordingly, these measurement requests may be challenging since much of consulting services may not appear to be measurable. Various publications and vendors have addressed this issue and provide insights and solutions for consultants to be able to measure their value.

Background on ROI of Consulting

Authors Jack Phillips and Patricia Pulliam Phillips are perhaps best known by their multiple books on the topic of measuring return on investment of consulting projects.  In the book, “The Consultant’s Scorecard,” the authors examine the entire spectrum of the concept of consulting return on investment. From the rationale for needing ROI, to planning the value assessment, to finding tools to help show ROI and final implementation – all aspects are discussed in the book. Particularly, the Phillips’ urge the need for ROI and they state that without it, a consulting firm and its clients can waste time and resources, as well as have a lower morale.

In a blog posting from Consulting Quest, a start-up company which works with a network of consulting firms, they explain how to perform ROI as a consultancy. One particularly powerful quote from the article is Galileo Galilei’s “Measure what is measurable, and make measurable what is not.” The blog author reviews the various steps that can be taken by a consultant when trying to obtain ROI data and projections.

How Consultancies and Vendors Are Using ROI

Tata Consultancy Services provides a whitepaper explaining how big data can help consultants to prove their ROI. They indicate that big data, if properly analyzed, can help consultants to obtain insights into how successfully a given strategy is working. Modern day technologies also make access to data even quicker, allowing consultants to provide even real-time insights into the value of their solutions.

Hall Consulting & Research LLC actually offers a free online workbook ROI tool. This sophisticated calculator is for information technology projects, and the firm states that consultants can use it to show the business value of their proposals.

Vendor Alinean offers various business case tools for consultants, marketers and salespersons to use in order to explain the value of their work. Offerings include various guides and calculator templates. These “CFO ready” tools can be customized and ROI deliverables can be provided in PDF, PowerPoint or Microsoft Word. Alinean’s CEO, Thomas Pisello, also wrote a book regarding examining value in the B2B environment entitled, “The Frugalnomics Survival Guide.” He explains that there is a new attitude within the business world whereby clients are more careful about their spending and are desirous of seeing measurable value propositions. The book reviews this mindset and explains how professionals can fully explain the value of their solutions in order to gain satisfied new clients.

Conclusion

Since clients are increasingly requiring transparency and ROI measurement of consulting projects, consultants are likely to seek appropriate solutions. Books, articles and vendors may provide needed insights and tools in order to determine and report consulting ROI metrics. With the power of big data, analytics and even machine learning, perhaps aspects of consulting that are immeasurable today may be measurable in the future.