Consulting services typically have a premium price because they allow access to expert knowledge, on demand and with the exact time commitment required by the client. Alternatives to hiring consultancy services are to train specialists internally, which requires a lot of time; or hire full-time specialists, which is not always cost-effective.
Of course, this also doesn't mean that consulting services should be overpriced. Consulting firms and their clients can take steps to optimize costs, ensuring the business relationship is mutually beneficial.
Discover why over-engineering increases costs without any benefit.
How Consultants Can Reduce Their Operating Costs
Consultant fees are often considered expensive, but it is important to consider that they have operational costs that are assumed by the hiring company in the case of employees. However, there are many ways that advisors can reduce their fees without sacrificing their profits.
Outsourcing
Engineering consultancy is a type of business, even if the consultancy is made up of just one person! This means that consultants also need legal, accounting, financial and tax preparation services to operate. These areas are all outside the field of engineering and, therefore, consultants must rely on the services of other professionals.
For larger consulting firms, it may make sense to have a full-time team to handle business support functions. However, outsourcing is typically a better choice for smaller companies and freelance consultants. The benefits for consultancies that outsource these support processes are very similar to those they offer to their clients.
Effective Project Management
A consulting contract can be considered a project even if construction or MEP installations are not directly involved. This means that the best practices in project management that apply to contractors can also be implemented with excellent results in consultancy.
- For example, proper project planning can allow a consulting service to be carried out more efficiently. This way, a consultancy can reduce the total number of hours billed to its clients. In the case of fixed-price consulting services, efficient use of time increases hourly income.
- Collaboration platforms can also make consultancies more efficient: their services typically involve working with a lot of technical information, and any tool that allows this information to be stored and shared simply by team members saves hours of work.
The Project Management Book of Knowledge, published by the Project Management Institute, provides excellent guidelines and best practices in the area of project management. Companies from all areas of engineering, including consultancy, can achieve excellent results by implementing a solid project management structure.
Provide the customer with a list of requirements in advance
As consultants are not part of the organization that hires their services, they do not have access to all the information necessary to effectively perform their work. Their work may also involve accessing areas that are not open to the public, and someone from within the organization may have to help them.
To avoid downtime after performing the consulting service, consultants must provide a list of requirements in advance. This may include information and documents such as:
- Architectural, structural and MEP plans of the facility.
- Equipment lists, along with locations and specifications.
- Historical data on electricity and gas consumption, along with associated utility bills.
Requesting this information on-site can disrupt the consultancy service, generating a waste of time for both parties involved.
How Clients Can Optimize Their Consulting Spend
There are also many ways clients can reduce engineering consulting expenses. Below are some recommendations.
Hire local consultants or companies whenever possible
If consultants have to incur travel and accommodation expenses to provide their service, their fees increase significantly. Therefore, it is recommended that companies hire consultancy services locally whenever possible.
When it is necessary to hire a consultancy from another city or country, the client must make all the necessary preparations so that they can deliver their service in a single visit. Reducing travel expenses allows consultants to charge less for the total project.
Providing requirements clearly and upfront
Consulting is characterized by having an open approach, where there may be many alternatives to solve a problem. However, consultants can be more effective if the scope of their work is clearly defined by the client – engineering is an extremely broad topic. For example, the skill set of a consultant specializing in chilled water plants is very different from the skill set of a consultant specializing in solar energy; A consultancy can send the best team according to your specific needs if you indicate them clearly.
Providing effective assistant for consultants
Although engineering consultants are experts in their respective fields, clients should keep in mind that they are not employees of the company and that the information they need to perform their work may not always be available to them. Additionally, there may be cases where they have to access areas of the building that are blocked from public access.
- Consultants almost always send a document requesting all necessary information before visiting the facility. Customers should ensure all data is collected before arriving to avoid wasted time.
- It is highly recommended that someone from the maintenance team be assigned to assist the consulting team so they can easily navigate any area of the facility. If the client company also has an in-house engineering team, it is highly recommended to designate someone from that department as well.
Proper Selection of Contract Type
Consultants can charge for their services on an hourly basis or a fixed price can be agreed between both parties involved. Each type of contract has advantages and disadvantages:
- An hourly contract means that one hour of consulting work is one paid hour, which is a fair deal for both parties, assuming the project flows smoothly. However, when the scope is not clearly defined or there are delays attributable to the customer, the cost can increase significantly.
- Fixed-price contracts eliminate the risk of going over budget, but consultants will typically only agree if the scope of work is clearly defined, as there will be no surprises that could significantly prolong the project.
Clients can protect their budgets by negotiating fixed-price consulting projects whenever possible, but should keep in mind that consultants may not be willing to undertake a fixed-price contract if it involves many unknown variables. Regardless of the type of contract, effective communication is essential for the consultancy service to be carried out without hindrance.
Conclusion
Engineering consultancy services do not have to be excessively expensive and both consultants and their clients can take steps to optimize costs. Consultants can utilize outsourcing and best practices in project management, and their clients can provide all necessary assistance so that the consulting service can be completed without delay. Of course, the work is simplified if both parties are clear and effective in their communication.
