All companies want to improve their efficiency, but many find it difficult to identify the gaps in their business practices that are preventing them from achieving significant breakthroughs. One remedy for this malady is to use an external resource that isn’t blinded by the company’s tradition and norms. A financial consultant with a fresh, outside perspective, sophisticated analytical skills and new technology can give an immediate boost to your company. A strong advisor will be able to sort the high value opportunities from the low-payoff activities, develop the plan to achieve them and have the capabilities to execute the plan within your organization.
The first step – a comprehensive assessment
No one would think of constructing a building without a solid foundation and, by the same logic, no business should embark on a plan to increase efficiency without first doing a solid analysis of its current situation. This is often the first step for the consultant you hire, and for good reason.
It’s only when you know where you are that you can determine how to get where you want to go, and a reputable consultant will learn about you and your company before making any commitments.
A good consultant will identify the areas in your operations where the most opportunity exists through some type of assessment or survey tool. (A mini version of a typical financial assessment can be found here.) But businesses are more than a table of numbers so a thorough advisor will follow up with a series of interviews with your staff (and potentially some customers and vendors) to clarify the survey results and help them hone in on the highest payback opportunities for your company.
Findings and recommendations – the roadmap for growth
Once a consultant knows your business – and where your pain points are – he or she will present a roadmap for increased efficiency. The assessment will be more than a recitation of gaps, however. It will offer concrete solutions, an executable plan with a clear outcome for the business.
A good efficiency plan will target the problems you want solved and show you how to divert or focus resources to the areas which will maximize the opportunity.
With a comprehensive roadmap you can fix the problems yourself, or if you are resource constrained, engage the consultant to lead or facilitate the execution of the plan.
There are many factors that contribute to how much your consultant will charge, such as the value created by the consultant, the size and complexity of the project, the length and depth of the gaps in your performance, and the time commitment required by the consultant to deliver the desired outcome to the company.
Pricing that is linked to the increase in efficiency resulting from the project perfectly aligns the objectives of the company and the consultant but many times precisely measuring that value can be a challenge. When good measurements are available the two parties can negotiate an equitable division of the financial improvement as the consultant’s compensation.
There’s no question hiring a consultant to boost efficiency represents a cost. But if you work with your consultant to make sure his or her analysis of your company is sound, the efficiency plan aligns with your goals and the price corresponds with what the work is worth to your company, the value will outweigh the cost, often by multiples of the price.