Bringing in a professional outside business consultant can provide you with an invaluable third-party perspective into your organization and new ideas for growth strategies, cost cutting, time-saving tools, and more. Consultants, however, are not all equal. How do you know whether the consultant you hire is actually helping your business and providing you with value commensurate with their compensation? This is where ROI-based consulting agreements can be priceless.
What Is ROI-Based Consulting?
Consultants use data analytics to evaluate your business and make recommendations to help you solve problems or optimize your performance. After they collect data about your situation, they analyze it and use their experience and knowledge to make concrete suggestions to help solve problems, improve efficiency, or otherwise improve your business operations. Consultants can also help identify gaps in your resource or knowledge base and provide or connect you with experts or other solutions. Consulting experts often evaluate the return on investment for each of the potential solutions or growth opportunities they suggest and advise you how best to invest in your company’s future.
ROI consulting contracts hold consultants to their own metrics, evaluating whether they are meeting their goals, earning their consultancy fees, and providing the best return on investment for your organization. From the very beginning of the consultant relationship, the business and consulting firm work together to develop a contract that includes specific goals and built-in benchmarks that will indicate progress along the way. The consulting firm is paid a smaller initial fee with further compensation dependent upon achieving the benchmarks.
Why ROI Consulting?
One objection many business managers have when considering hiring an outside consultant is the difficulty of evaluating and quantifying the value of what the consultant will do for the company. ROI consulting contracts set out specific goals that the business wants to achieve—for example, increasing a certain department’s production by X% by February of next year with a budgeted investment of $Y. Only if the consultant is successful in helping the client achieve the goals set forth in the contract do they earn the compensation associated with those goals.
This approach has numerous advantages over simply hiring a consultant and hoping they help your business improve. It clarifies what your company’s objectives and goals are for the relationship. It helps convince managers and colleagues who are reluctant to bring in a consultant that there will be a tangible benefit from the expense and mitigates the risk of wasting capital. As projects progress over time, it can be a convenient, concrete tool to help justify ongoing consulting expenditures to a board of directors or shareholders.
ROI Consulting Yields Concrete, Measurable Results
ROI-based consulting contracts can provide peace of mind for your organization, ensuring measurable results and maximizing your consulting budget. If you’re ready to see for yourself how an expert business consultant can help your company grow and thrive, contact Cornerstone Consulting Organization. Our executive and senior business management consultants have a wide variety of areas of expertise, technical specialties, and experiences to help your organization.