How to get the best out of external consultants working on IFRS17 compliance programmes
One key area of discussion at the IFRS 17 London event I attended recently concerned the challenges programme leaders face managing external consultants alongside internal IFRS 17 project teams.
Management consultants play an important role in today’s business environment and bring important much needed skills that to ensure overall programme success. The recent trend of insurers moving towards leaner business models means that when regulatory change programs such as IFRS 17 arise, internal resources can become severely stretched. When this is combined with a lack of knowledge concerning IFRS 17 one option is to seek specialist external support.
For project managers, the participation of external consultants within a team can deliver significant benefits but can also cause problems. External consultants provide valuable skills and methodologies that reduce risk, increase speed of delivery and provide innovative solutions to new problems. However, in reality their expected talents do not always meet expectations. Project managers may find consultants hard to manage and the extra cost can have a huge impact on already stretched budgets.
IFRS 17 programmes require certain steps to be taken to maximise the benefits of using external consultants.
Establish a balanced relationship
External consultants require a different management approach compared with internal consultants or full-time team members and it is important to achieve the right balance. Consultants should be carefully managed, although exerting excessive control can strain relationships and adversely affect productivity.
Permanent employees are normally aware of reporting lines and staff seniority but this is not necessarily the case with consultants. You may assume consultants regard you as the “client” and will automatically follow your instructions however in reality, being a client employee is not necessarily the same as being the client and consultants may have differing views of who the client actually is.
Who the client is will depend on multiple factors, but usually the individual responsible for engaging the consultant is considered the client. This is not however always the project manager. Regardless of this, consultants will want to meet the needs of the project manager but will probably regard them as one stakeholder amongst many. Project managers may work with team members who do not regard them as their line manager. However typically they will have skills to enable them to influence people to perform tasks that they might not necessarily have line authority for.
It is important to build trust within the team. It can be challenging to integrate consultants into an existing team, especially if they are being introduced to solve problems that internal team members are unable to deal with on their own. Internal consultants and employees may be concerned about their jobs and reputations which may lead to tension. It is therefore important to communicate to internal staff that the need to engage consultants does not reflect adversely on them. Honesty is the best policy in explaining what the consultant is being brought in to deliver and the lessons that the internal team can learn from the project.
Ensure the consultant knows why they have been engaged
It is essential to clarify the consultants’ role and identify the key deliverables. Make sure everyone involved with the project understands why consultants have been engaged, including the consultants themselves. Ensure they are conscious of any underlying issues that might not have been openly discussed.
If consultants are employed by a third party consultancy firm then they not only have to satisfy client stake holders but also management of the consulting firm. The consulting firm will need to ensure the work performed is of the required quality to avoid the risk that the client will reject it and require remediation which could be non-chargeable. Satisfying internal stakeholders will have a direct impact upon client project delivery; however, a consultant’s career depends on their relationship with their consultancy and not with the end client. It’s worth considering that when a consultant seems reluctant to follow directions it may be because it conflicts with working practices and methodology of their consultancy.
Get consultants productive rapidly
It is important to ensure consultants are productive as soon as possible. Consultants should be able to start producing quickly, however, whilst they may not need as much on-boarding as new employees, they will still require support in getting acquainted with the organisation, the team they'll be working with and with the details of the IFRS 17 project they will be working on.
What motivates consultants?
Accomplished consultants have four primary motivations. They wish to meet client needs, generate revenue for their consultancy, enhance their personal reputation and create the conditions for further business activity on account of their delivery record.
When a consultant has been engaged on a client site for some time then they may regard themselves as being a member of the client team. It may be assumed that their interests and the clients are the same. Whilst consultants are normally motivated by meeting client needs they are not necessarily there purely for the client’s benefit.
Managing consultants as part of a project team should be the same as for internal team members. They should be set tasks which they will need to deliver on time and to the required quality. Consultant activity may change as projects progress. The best approach is to communicate regularly with consultants to continually discuss deliverables and expected outcomes.
Consultants need measurable goals, so should be to set SMART (Specific, Measurable, Attainable, Relevant and Timely) targets. These not only clarify expectations, but also allow measurement of progress and performance.
Feedback and monitoring
It is important to provide regular feedback. Consultants need feedback on their performance so they know what they're doing well and where they should improve. If a consultant is engaged via a consulting firm then it is important to also provide them with feedback. It’s important that the consultancy firm is delivering on the promises they made and they will rely on regular feedback to ensure the statement of work is completed as agreed.
There are significant benefits to be gained by employing an external consultancy as long as they are correctly managed. It provides a simple, fast way to gain access to scarce expertise which in the case of IFRS17 is very much the case. Consultants should have the required skill set and be able to provide instant assistance to clients. They will be focused on project delivery and achieving results in a timely manner.
Millennium Consulting is an established (1995) Finance Technology consulting and resourcing company with almost 25 years experience assigning highly experienced individuals and teams to support insurers with regulatory change programs such as Solvency II, IFRS9 and IFRS 17.
We provide cost-effective, high quality interim support for niche insurance focused finance technologies such as Prophet, MoSes, Aptitude Software, Legerity Software, Tagetik & SAS. We also have extensive experience delivering change in respect of ERP and finance technologies such as SAP, Oracle, PeopleSoft, SunSystems and Unit4 Financials (previously Coda).
To find out how we can provide support with your IFRS17 compliance program contact Brendan Shaw, at firstname.lastname@example.org.