Skip to content
Tiatra, LLCTiatra, LLC
Tiatra, LLC
Information Technology Solutions for Washington, DC Government Agencies
  • Home
  • About Us
  • Services
    • IT Engineering and Support
    • Software Development
    • Information Assurance and Testing
    • Project and Program Management
  • Clients & Partners
  • Careers
  • News
  • Contact
 
  • Home
  • About Us
  • Services
    • IT Engineering and Support
    • Software Development
    • Information Assurance and Testing
    • Project and Program Management
  • Clients & Partners
  • Careers
  • News
  • Contact

5 common consultant negotiation tactics and how to protect your interests

To execute a successful digital transformation initiative, you are likely to establish consulting provider relationships.  A key step in creating an effective and meaningful relationship is establishing mutually aligned expectations and a commercial agreement. This takes planning.

Unfortunately, many organizations find themselves susceptible to the tactics used by consultants to manage their risk and optimize a commercial arrangement to their benefit.  Following are the primary tactics organizations must be aware of:

1. Establishing relationship leverage. Providers will employ a combination of tactics to increase relationship leverage.  These tactics can be implemented across multiple established relationships—with senior leaders that previously worked for the consultant, relationships developed via prior projects, and relationships established with the consultant at a prior company.  Consultants recognize that program leadership is not naïve to the nature of these executive-level relationships and are likely to flex this relationship leverage during commercial negotiations with the program-level team.

For example, the consultant will seek to test the strength of their relationship with executive leadership against the strength of the program leadership team.  The consultant will try to understand any potential lack of confidence in the core project team capabilities, project direction and commercial positions and leverage any uncertainties during the negotiation.  This effectively drives a wedge of uncertainty between senior leadership and the project team, positioning the consultant with a higher degree of confidence entering negotiations.

2. Leveraging credibility and capabilities. In addition to establishing relationships, consultants will work to demonstrate the credibility of their team within the industry and their ability to deliver on the transformation.  This is appropriate and common across providers. 

However, organizations fail to understand that the consultant is also conducting a thorough assessment of their prospective or existing customer teams’ capabilities and their perceived credibility with executive leadership.  This assessment may not be readily apparent to the client, but rest assured it is happening; the provider will be taking note of issues related to credibility based upon prior projects and the internal reputation of program leaders.

Additionally, companies should expect that, based on their objectives, consultants may leverage core team weaknesses for the benefit of establishing a higher degree of credibility with executive leadership.  Consultants will also leverage their confidence with senior leadership to strengthen their ability to expose program risks and mitigate risk to their firm. 

Although a more aggressive tactic, certain consultants will even leverage this confidence to undermine the negotiation posture of the core negotiation team through offline executive interactions.  These interactions are intended to raise certain concerns outside of the negotiation session itself.  Unfortunately, this pattern can proceed from the negotiation and contracting phase of the program into the execution phase and can contribute to a host of relationship and governance issues.

3. Positioning the strategic imperative. Consultants will continuously refer to their client’s broader strategic initiatives and business benefits to minimize the importance of achieving a best-in-class commercial negotiation for their services.  In many respects, executive leadership shares this point of view and sense of urgency to respond to market demands and commitments made to its board of directors and stockholders.  

The consultants use this sense of urgency to apply direct and indirect pressure to the client’s negotiation team and “get the deal done.” Then, organizations can proceed with the true strategic imperative and drive toward the promises associated with the business case.

The problem with this dynamic is that the customer’s team is tasked with presenting a high degree of accuracy regarding the scope, approach, and total cost for the program while also being asked to achieve a highly favorable commercial outcome.  Typical challenges include previously established project timelines and commitments at the executive level that do not provide the time necessary to achieve such outcomes. 

This situation is further complicated by executives that do not communicate to consultants that both the strategic imperative and a mutually beneficial agreement must be achieved.

4. Employing delay tactics and speed. Once the foundation of the above three tactics are set, providers may use traditional delay tactics as a response to the client’s request for further scope definition and consideration on commercial terms to apply pressure to the client.  These delay tactics are not necessarily overt in nature.  In many cases the consultant will use a lack of clarity with respect to process and expectations to delay a response. 

Alternatively, the consultant will cite a lack of clarity with respect to program scope and approach to delay a substantive response to a commercial request.  In certain cases, it’s the customer’s lack of sophistication that allows the consultant to leverage the even the slightest degree of ambiguity to justify a delayed response and commercial negotiation process.   

Once the parties proceed with the negotiation, the consultant will certainly welcome an opportunity to accelerate the pace as they count on the client requiring more internal preparation to conduct effective negotiation sessions.  Consultants recognize client  inexperience in such negotiations, their potential lack of capability and effort required to obtain internal alignment prior to the negotiation session.  

Combinations of delayed consultant responses with well-timed and orchestrated acceleration of negotiation sessions plays to the advantage of the consultant.  Consequently, this tactic forces the client to decide between delaying the negotiation session due to lack of preparation against the pressure of getting the project started.  A lot is at stake for the core project team at this early stage of the project and the consultant is fully aware of the potential credibility loss internal teams may suffer as a result of delays coming out of the gate.

5. Creating a sole source negotiation. Every consultant’s primary goal at the beginning of a program is to avoid the downstream RFP process.  There are several tactics providers use to create the potential for a sole source environment.  

First, they orchestrate the proposed project timeline in a manner that leverages the strategic imperative to start the program as soon as possible.  Coming out of a Phase 0 approach, it is difficult to find a consultant-delivered project roadmap that provides the time required to take the program to market via an RFP.  The most adept consultants will overlap traditional Phase 0 activities with actual project mobilization and so-called “early wins” to guide the program into a sole source environment.   

The second tactic is to leverage their established relationship strategy and credibility established with executives and the core project team to create uncertainty with transitioning to another vendor.  Their goal is to call into question the overall value of going to market and the risk of transitioning from the current provider that conducted a Phase 0 to a new provider that does not have that level of executive credibility and knowledge of the project and company. 

Steps to counteract provider tactics

In the same way that your consultant is going to protect their interests through these tactics, there are several countermeasures an organization can undertake to address the above tactics and protect their own interests.  

  • Companies must assign a highly credible leader to lead the transformation initiative, someone who has the full support of executive leadership both internally and in the eyes of the vendor, as well as a credible cross-functional team in business, IT, legal, finance, procurement, and third-party advisors supporting their efforts.
  • Executive leadership must demonstrate to the consultants that this leader is fully empowered and has the full confidence of executive leadership.  Delivering these messages early and reinforced often will help to avoid “divide and conquer” strategies.
  • Companies must establish an integrated sourcing strategy and timeline in the context of the overall project plan—one must move with the other.  Do this well in advance, so you don’t find yourself having to make an “either/or” choice.  Set up the strategy and process so that it enables a successful consultant evaluation, selection, and negotiation as well as a timeline and approach that enables the mobilization of the transformation initiative itself.

Organizations that do not understand the tactics of consultants are highly susceptible to these strategies and are very likely to achieve suboptimal negotiation and project outcomes.  At the end of the day, consultants have much at stake taking on your transformation program, so they are going to use strategies to ensure their risk is minimized and commercial opportunities are maximized.

Taking time to understand your consultant’s motives and the tactics that stem from those motives can help you best prepare for negotiations and ensure your program is oriented towards your program goals.

IT Management, Vendor Management


Read More from This Article: 5 common consultant negotiation tactics and how to protect your interests
Source: News

Category: NewsJune 22, 2022
Tags: art

Post navigation

PreviousPrevious post:Powering a low-carbon digital ThailandNextNext post:Q&A: Leading IT in a high-volume M&A environment

Related posts

휴먼컨설팅그룹, HR 솔루션 ‘휴넬’ 업그레이드 발표
May 9, 2025
Epicor expands AI offerings, launches new green initiative
May 9, 2025
MS도 합류··· 구글의 A2A 프로토콜, AI 에이전트 분야의 공용어 될까?
May 9, 2025
오픈AI, 아시아 4국에 데이터 레지던시 도입··· 한국 기업 데이터는 한국 서버에 저장
May 9, 2025
SAS supercharges Viya platform with AI agents, copilots, and synthetic data tools
May 8, 2025
IBM aims to set industry standard for enterprise AI with ITBench SaaS launch
May 8, 2025
Recent Posts
  • 휴먼컨설팅그룹, HR 솔루션 ‘휴넬’ 업그레이드 발표
  • Epicor expands AI offerings, launches new green initiative
  • MS도 합류··· 구글의 A2A 프로토콜, AI 에이전트 분야의 공용어 될까?
  • 오픈AI, 아시아 4국에 데이터 레지던시 도입··· 한국 기업 데이터는 한국 서버에 저장
  • SAS supercharges Viya platform with AI agents, copilots, and synthetic data tools
Recent Comments
    Archives
    • May 2025
    • April 2025
    • March 2025
    • February 2025
    • January 2025
    • December 2024
    • November 2024
    • October 2024
    • September 2024
    • August 2024
    • July 2024
    • June 2024
    • May 2024
    • April 2024
    • March 2024
    • February 2024
    • January 2024
    • December 2023
    • November 2023
    • October 2023
    • September 2023
    • August 2023
    • July 2023
    • June 2023
    • May 2023
    • April 2023
    • March 2023
    • February 2023
    • January 2023
    • December 2022
    • November 2022
    • October 2022
    • September 2022
    • August 2022
    • July 2022
    • June 2022
    • May 2022
    • April 2022
    • March 2022
    • February 2022
    • January 2022
    • December 2021
    • November 2021
    • October 2021
    • September 2021
    • August 2021
    • July 2021
    • June 2021
    • May 2021
    • April 2021
    • March 2021
    • February 2021
    • January 2021
    • December 2020
    • November 2020
    • October 2020
    • September 2020
    • August 2020
    • July 2020
    • June 2020
    • May 2020
    • April 2020
    • January 2020
    • December 2019
    • November 2019
    • October 2019
    • September 2019
    • August 2019
    • July 2019
    • June 2019
    • May 2019
    • April 2019
    • March 2019
    • February 2019
    • January 2019
    • December 2018
    • November 2018
    • October 2018
    • September 2018
    • August 2018
    • July 2018
    • June 2018
    • May 2018
    • April 2018
    • March 2018
    • February 2018
    • January 2018
    • December 2017
    • November 2017
    • October 2017
    • September 2017
    • August 2017
    • July 2017
    • June 2017
    • May 2017
    • April 2017
    • March 2017
    • February 2017
    • January 2017
    Categories
    • News
    Meta
    • Log in
    • Entries feed
    • Comments feed
    • WordPress.org
    Tiatra LLC.

    Tiatra, LLC, based in the Washington, DC metropolitan area, proudly serves federal government agencies, organizations that work with the government and other commercial businesses and organizations. Tiatra specializes in a broad range of information technology (IT) development and management services incorporating solid engineering, attention to client needs, and meeting or exceeding any security parameters required. Our small yet innovative company is structured with a full complement of the necessary technical experts, working with hands-on management, to provide a high level of service and competitive pricing for your systems and engineering requirements.

    Find us on:

    FacebookTwitterLinkedin

    Submitclear

    Tiatra, LLC
    Copyright 2016. All rights reserved.