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Specifics of the deployment of management consultants in medium-sized enterprises (SMEs)

Consulting for medium-sized enterprises (SMEs) shows some differences to consulting for large corporations. On the one hand, there are differences in the areas of consulting services demanded, since large corporations and SMEs may have different starting points and challenges. On the other hand, there are differences in the way the firms collaborate with external consultants and the requirements the consultants have to meet.

When does it make sense for a company to hire an external consultant?

The reasons for using external consulting services are identical for large, medium-sized and small companies. Although the underlying motives can be very diverse, they can essentially be limited to the following points:

  • Buy time, capacity and expertise from external consultants
  • Use the knowledge and experience from other projects, companies or industries
  • Transfer methodological knowledge into the company
  • Gain knowledge about unknown markets or explore new business areas
  • Obtain impartial, objective and independent opinions and views.

What are the main areas on which SMEs seek advice?

Until about 5 years ago, the main focus for SMEs was on financing and tax issues. To this end, companies most frequently turned to their tax advisors, legal advisors, auditors or their principal bank. However, as the business world has changed (internationalization, growth opportunities, the emergence of developing countries, the financial market), the challenges relevant to SMEs have also changed. As a result, medium-sized and smaller companies are increasingly demanding consulting services that were previously more common among larger corporations, such as

  • Establishment of new companies, new locations
  • Acquisition and sale of companies or parts of companies
  • Innovation and identification of market, product or technology trends
  • Optimization of cooperation with suppliers, partners and employees
  • Expansion, internationalization, development of new markets, clients and business areas
  • Enhance sales and customer orientation
  • Efficiency gains and cost control
  • Organization and leadership.

What do medium-sized companies demand from external consultants?

For medium-sized companies, other criteria may be relevant or more significant than for large companies. From our experience with searching, evaluating and selecting consultants for medium-sized companies, we can particularly highlight the following requirements:

  • Relevant experience with medium-sized companies
  • Understanding of the culture of medium-sized companies
  • Pragmatic and implementation-oriented consulting
  • No "hot air", not only "big ideas", but feasible concepts and measures
  • Entrepreneurial thinking
  • Industry expertise
  • Trust (no loss of control).

How do medium-sized companies find the "right", suitable consultant?

Personal relationships or recommendations play a very important role, especially for medium-sized companies. However, there may be situations where your personal network is not able to provide you with the right solution or answer. In these cases, it is difficult for many medium-sized and smaller companies to find the right consultant. In contrast to large corporations, mid-sized companies usually have less experience in dealing with external consultants due to their smaller and less frequent need for consulting, and they usually do not have built established relationships with preferred consultants. In addition, they usually do not have specialist staff who are experienced in hiring consultants, such as purchasing or HR departments.

Finding the right and suitable consultant basically means first of all identifying suitable consulting approaches and consulting services as well as their providers and recognizing their differences. A more or less comprehensive analysis of the consulting market and its providers is a prerequisite for this. Once the initial selection (long list) of potential consulting providers has been completed, the problem of quality testing arises. Since this must be done before the services are provided, the quality of the various consulting firms is not always obvious. The indicators that point to excellent and focused consulting expertise and performance are manifold. Past project experience, type and number of available experts, project procedures, methodological know-how are indicators that suggest potential suitability and quality. However, suitability and quality are not only based on 'hard' facts, but are 'hidden' characteristics that manifest themselves in clear, 'unique' benefits for the client organization. To recognize these benefits requires a lot of experience in dealing with a variety of different consulting firms.

If medium-sized companies do not have the relevant experience in these areas and do not have a referral network or personal relationships, it is good advice to turn to third parties for help with the identification and selection of the right consultant, because the selection of the right consulting company is crucial for the success of the project and thus for the return on investment.

How can consultingsearcher and Cardea help?

As expert in evaluating and procuring consultants, Cardea AG has been working since its foundation in 1999 to bring transparency into the consulting market and to support clients in their decision making when choosing and hiring consultants. For many years, Cardea AG has been a recognized expert and sparring partner for many management levels of medium-sized and large national and international companies, as well as in the media, advising on questions relating to the consulting market and the use of external consultants.

With Cardea's latest web-based service, consultingsearcher, client companies can find consulting firms with proven consulting competencies. This helps to initially screen suitable consulting firms.

consultingsearcher cannot, however, replace the detailed evaluation and matching of specific requirements towards external consultants crucial to a client and its project. Support in these areas is provided by Cardea's expert team, based on their experience from a wide range of search and evaluation mandates.

Cardea AG

Author Since:  December 4, 2020

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