Due to corporate purchasing policies, when selecting a consultant, the cost estimated to complete the work is often weighted heavily in the process. There are a few reasons for this. First, cost is a readily available number that is an objective, measurable data point. This adds necessary transparency to the selection process. Price points require little effort by the procurement team to compare and make a decision. If the assumption is that each consulting option will deliver the same quality of work, it’s an easy decision to minimize costs.
However, using minimizing costs as a motivator and choosing a price point as the sole determining factor to select a consultant can end up backfiring for many companies. The differences in the costs between consultants are usually marginal in comparison to the difference in value between the right and wrong consulting group.
Consider a site looking to increase the productivity of a load & haul fleet that costs $50M per year to operate. Each percentage point of improvement is a savings of $500,000. If you consider the likelihood of success of a specialized, experienced and perhaps more expensive group, the potential savings mitigate the cost differences between consultants.
Choosing the wrong consultant can often lead to higher costs in the long run as well. Aside from cleaning up a mediocre job, companies that hire the wrong consultant also find themselves ill-equipped to handle roadblocks that come about once the consultant has left. In the worst situations, companies find themselves in a position where money is wasted, resources have been exhausted, and no meaningful outcome was produced. They’ve missed an opportunity to find significant value in their operation.