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Think You Need An Independent Consultant To Optimize Your Retail Operation? Consider These Four Questions

Ceridian

As a retailer, your technological needs run the gamut. Many pertain to human capital management — payroll, time and attendance, workforce management, employment law compliance and more. Additionally, there’s employee engagement, turnover and other concerns. 

In the processes of evaluating and deciding on which solution to purchase, the temptation is to seek an independent consultant. Often, that’s the right move. But independent consultants’ effectiveness varies widely. Their expertise and experience can provide a retailer with valuable insight, yes, but just as often consultants’ involvement causes more problems than it solves. Why? Some consultants are more aptly described as third-party sellers. They promote generic processes and cookie-cutter approaches. Communication might be command-and-control, keeping vendors from interacting directly with you. It’s all designed to bring about outcomes that benefit their bottom line — at the expense of clients.

You need a dynamic relationship with a consultant. You need open interaction with solution providers. You need a solution tailored to handle your organization’s top business issues. Before plunging into any commitment, consider the following four questions. These and the discernments they encourage will help you to avoid conflicts of interest, identify value-added consulting, and ensure positive outcomes for you, your career, and the company.

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1. Do you really need a third party consultant? Or is it an insurance policy?

Most retailers are savvy and know their business. Through discussions for all to see in the public domain, analysts, industry press and other retailers usually reveal who the main providers are and how they have been successful. Compare and contrast this with the views of third-party consultants: Their knowledge of the marketplace and solution providers’ capabilities may lag by a few years. Furthermore, they tend to focus on process improvements, not necessarily on the technology that puts it into application and practice. More of an insurance policy, a third party might shield retail executives from failure. If the project falls short, the consultant can be blamed — and exited. Understand your organization’s strengths and weaknesses. Typically, the more current solution providers can provide the partnering your team needs.

2. Are there signs of bias toward one or more providers? Could this have an impact on an objective evaluation and selection?

Consultants get business for their expertise in a particular industry, field or discipline. Check their opinions against the marketplace. Some have a good grasp on current offerings, whereas others simply repeat familiar content and knowledge. For instance, depending on the age and experience of a consultancy, it may be steeped in on-premise or legacy-hosted systems and lack knowledge of true software-as-a-service provisioning, which offers superior outcomes for retailers today. Even worse, these ill-informed or self-serving consultants may push retailers in the wrong direction, down a path of no return. Conflicts of interest compound the danger, especially when evaluation and implementation consultants are one and the same. Working together, they might steer you toward the provider with whom they are most familiar and able to influence through previous relationships and projects.

Who are the up-to-date consultants? They frequent user groups of all providers in their discipline. They also regularly blog on current topics and moves in the market. A single report from secondary research does not equal expertise. Primary research defended by experience and first-hand knowledge does. Short of an up-to-date consultant, retailers are better off reading reports themselves, defining their own evaluation and selection process, and investing saved time, resources and money into the project itself.

3. Of the most recent prior evaluations a consultant has performed for other retailers, which solution did each select and why?

It is always good to understand where consultancies have provided similar services to other retailers in the past 24 months, what was shared and how engagements were different. 

Consultants are apt to re-use evaluation documents from one retailer to another. Nothing tailored to your business comes of it. Remember, too, that consultants may be breaking confidentiality agreements by re-using materials from a prior engagement’s contract. You and the consultant may become liable.

How can you spot these conflicts? Read the RFP or criteria before anything is published. Make sure everything matches your needs. Check the documents’ properties: Are they original materials, owned by the consultant? Look for patterns of the same results. The provider selected may be the best on the market, yes. But potential biases toward one provider over another arise from conflicts of interest, too, including formal business relationships, integrated business models, integrated technology offerings, comfort and bench knowledge, and joint product market strategies. Are any contractual referral fees in place? Joint planning or business model arrangements could spell a lack of independence in how the selection is run, what criteria are being used, and the exposure and opportunities provided to each of the providers vying for your business.

4. How many new ideas or recommendations has the consultant added to your original needs?

Remember, consultants bill by the hour and number of deliverables. From experience, good consultants will help retailers save money, time and effort. Others will add scope to your process in order to benefit their own practices and revenue. For instance, beware of this creep in scope, automatically applied to all providers. Additionally, old-school techniques of fear and uncertainty may surface as consultants attempt to justify the additional, unplanned scope they propose. Remember, you know your culture and business: Don’t be too quick to accept. Sell-side providers are interested in driving their revenue regardless of value to the retailer’s business. Generally, buy-side partners are preferable. They remain focused on the value delivered. There’s a huge difference.

Do Your Homework, Be Honest With Yourself And Demand Transparency

Analyze why your organization seeks the advice of outside consultants. You may already have the necessary information to make the changes you suspect your stores need. Should you still determine that an independent expert’s input is essential, choose your consultant wisely. Demand transparency. Seek one that exercises impartiality and demonstrates a depth of experience in and knowledge of the industry. These precautions will help to ensure a successful engagement and positive business outcomes.


John Orr is the Senior Vice President of Retail Strategy & Execution at Ceridian HCM, a leader in human capital management delivering trusted results and transformative technology. Offerings include the award winning, cloud-based Dayforce HCM, LifeWorks and International Payroll. For more information, visitwww.Ceridian.comor contact John by email:John.Orr@Ceridian.com


 

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