Consultants & Contractors Guide 2023: How to Source Expertise

Grant Wellwood offers up a method for selecting how you source subject matter experts

THE timeliness and quality of your decision-making characterise your success in today’s business environment. Decisions are predictions about the future based on the knowledge of the past. Therefore, the quality of experience matters. Tapping into this experience is particularly important for cross-disciplinary technical decisions, so how can decision-makers access subject matter expertise when it is not available in-house?

Options

When it comes to accessing subject matter expertise, there are four broad options:

Insourcing:

Employing an expert as a full-time staffer who provides the service from within the organisation to internal clients. The expert reports to and is managed by the client organisation. This has often been the instinctive option, but there are others.

Outsourcing:

The expert is employed by a third-party organisation, such as a consultancy, and is made available on a per-assignment basis according to the contract terms. The expert in these situations reports to and is managed by a third-party organisation. Technically, original equipment manufacturer (OEM) expertise also falls under this heading, but this variation has not been considered as we look for independence. Note that this category also includes the emerging phenomenon of accessing professional services via the gig economy.

Crowdsourcing:

In this model, elements of the solution your company is seeking to develop are obtained by soliciting contributions from a large group of people, especially from online communities. Those involved may or may not be subject matter experts (SMEs), and the output is usually conceptual (thought bubbles) rather than developed and deeply-considered solutions.

Co-sourcing:

This more advanced version of outsourcing often creates long-term relationships built on the values of trust, excellent service, and quality. While still a third-party employee (often an independent contractor), the SME is usually assigned to specific clients, which leads to the mutual trust and understanding that differentiates it from the “next available consultant” contracting arrangement. There is also a degree of shared success and responsibility in attaining the goal(s).

Each option has its pros and cons and these depend on your perspective. Therefore, you will need to analyse your options before making a decision.

Decision criteria

Within the generally accepted framework of most business decisions (timeliness, quality and value), some common criteria for judging SMEs exist. Provided next as thought starters, each possible criterion is accompanied by probing questions to help you decide whether it applies to your situation and, if so, its relative importance.

Timeliness

Time is of the essence when developing processing solutions, especially those supporting existing value chains where the value is getting destroyed by the minute.

Engagement lead time: How long does it take you to access the solution provider and provide the briefing? Does your engagement of an expert need to be competitively tested via internal procurement processes that often involve lengthy discussions about intellectual property?

Availability: Will the expert be ready when you need them? Are they servicing other clients? How scalable is their ability to respond to short notice and high demand? Is engagement sustainable during an economic downturn (ironically, when expert input is most needed)?

Execution time: How long will it take the expert to solve your issues? Can the problem be parallel processed by a team, for example? What proportion of the expert’s total time is available for technical problems? Can you get their undivided attention so that they can focus?

Iterations: Can the solution be completed in a single cycle?

History: When it comes to many problems, history often repeats, so recall can be a big timesaver. Does the expert have access to what worked and didn’t in the past to avoid reinventing the wheel?

Solution quality

Let’s evaluate the practical experience of the subject matter expert.

Currency: Is the expert actively plugged into the latest science and engineering developments,
or is their expertise frozen in time? Are they a member of IChemE at a level commensurate with their experience?

Innovation(defined as the conversion of knowledge into profit): Is their knowledge comprehensive and expansive (international and/or multi-sector) or limited to one industry, or perhaps one operation? Are they familiar/comfortable with ambiguity and knock-on effects? After all, when it comes to process value chains, everything is connected.

Readiness level: Will the solution they provide be a thought bubble or a fully considered, engineered and costed solution that is ready to go?

Objectivity: Can the expert operate without personal biases, emotions, and false beliefs? Will the expert be able to “call it as they see it” without political influence, career impacts, or commissions?

Connectivity: Is the expert connected to OEMs for a seamless transition into the delivery phase? Are they willing to provide references?

Depth: What will be the residual risk/uncertainty? Will the solution consider uncertainty and incorporate sensitivity analysis? Will the solution be delivered in a manner others can directly use? Will the features be converted into benefits and communicated in a relevant, realistic, and easily understood way?

Completeness: Will the expert help capture lessons associated with the decision (what was considered, rejected, and accepted and on what basis) to enable them to be incorporated into corporate memory? This critical feedback loop is an investment in the future.

Breadth: What is the expert’s ability to work across business unit silos to get input data and buy-in by transferring knowledge?

Accountability: Do they stand by delivering what was promised? Do they have any skin in the game? Is the role in the process deliverable, to which they will be held accountable, clear?

The difference between outsourcing and co-sourcing is that the expert is more of a partner who can build a history and understands the culture and preferences of the operation

Value proposition

This is the cost of getting an expert solution or recommendation.

Total cost: The total cost of getting to a workable solution includes the access costs associated with the multi-iteration/trial-and-error iterations, which are often the hallmark of best endeavours-based “experts”. Note that the hourly rate for internal experts is not zero; the actual spend can be significantly higher than externals, especially when realistic overheads and time fragmentation allowances are included. If the internal experts move on, the costs of onboarding them and training replacements in the ways of your organisation need to be included.

Rework: This is the process disruption and cost of failed solutions arising from multiple iterations

Replication/Re-use: If the solution provides a competitive advantage to your organisation, how secure is your investment? What are the chances of it being reprised by your competitor, destroying any competitive advantage?

Flexibility: What will be the utilisation of your expert’s time? How easy is it to maximise utilisation given the often bumpy nature of demand for expert input? Having a full-time expert available for the occasional problem can be costly, and getting this balance right in practice is challenging.

With the criteria identified, we need to weigh their importance to get our best option.

Deciding

Multi-criteria decision analysis (MCDA) is a valuable tool for this task. In the worked example (see Figure 1) typical of many, co-sourcing scored the highest. But let’s see why.

The difference between outsourcing and co-sourcing is that the expert is more of a partner who can build a history and understands the culture and preferences of the operation while still offering scalable and high currency resources to generate the best all-around solution. Such a relationship also shortens the engagement process, another highly-weighted criterion, with assignments taking the form of work schedules to a pre-negotiated master service agreement.

The main detractors from the insourcing option relates to true independence and the percentage of time an in-house expert retained within a company can spend on technical issues. In many consultancies, more than 80% of the available hours are available for billable activities.

In contrast, an operation’s administrative and compliance obligations can reduce the time available to work on solutions to less than 50%.

Crowdsourcing, which is very popular at present, scored low in this analysis but why? Even when the crowd involves technical experts, the best that can usually be produced under constrained conditions are thought bubbles. While they are the critical kernel of any solution, they are nevertheless only a minor step towards developing a workable solution. Plus, chasing down thought bubbles is resource intensive. It may provide quick and inexpensive access to expertise but what is provided is often a long way from an implementable solution.

Finally, the success of both the in-sourcing and co-sourcing models also depend on having someone within the host organisation who can spot the need for and then interact with the expert. This link is essential as only someone inside an organisation can truly understand its machinations and constraints. Synergistically, only someone outside your organisation can be truly independent and maintain the experience required to make the best decisions possible.

The success of the co-sourcing model also depends on having someone within the host organisation who can spot the need for and then interact with the expert

In summary

Co-sourcing is a useful way for organisations and consultants to engage subject matter experts. It is self-reinforcing, with the prospects of future engagements ensuring the consultant acts in the client’s best interests. The ultimate value of the advice is also much easier to articulate, which helps the consultant negotiate a deal rather than price-based remuneration.

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