Corporate Strategy | "Value Based Pricing - The Future of Consulting"

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Corporate Strategy | "Value Based Pricing - The Future of Consulting"

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Value Based Pricing - The Future of Consulting

- by Devroop Dhar *

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Risk	Cause	Effect	Mitigation Plan
Incompetent partners.	Selecting a consulting partner who may not be competent enough to deliver. The chance of this risk is high, as many clients might go for a lesser competent consulting company, as they foresee no financial implications.	Wastage of time, and implementation of a wrong solution.	Selecting one of the top consulting firms as a partner. Selecting partners with competency and experience in the relevant field. Checking previous client feedback and citations.
Weak participation from client.	As there is less financial commitment from the client in the initial stages, so there can be a chance of not being committed enough for the project.	Lesser chance of project success. All requisite information not made available to the consulting company.	Clients should enter into a project agreement only if there is buy-in from all quarters, and a feeling of need for the project. A project champion should be assigned from amongst the client managers for smoother execution of the project.
Usage of the model in all scenarios.	Attempting to use this model in all scenarios, as it seems to be lucrative option for both the client and the consulting company.	This would be unviable to the consulting company, and would result in loss of revenue.	Use this model only when the benefits are tangible and quantifiable. This should not be used in cases like audits, etc.

Finally, we can conclude with the notion that Value Based Pricing is here to stay. It will be the in-thing in future in many consulting assignments, and may even be extended to domains like IT and ITeS. Having said that, it should be used judiciously, and both the client and the consulting company should not adopt this model for all scenarios. 'One Size Fits All' approach should not be adopted.

Concluded.

Devroop Dhar is a Management Consultant with PricewaterhouseCoopers in Mumbai. He has almost 5 years of experience in the field of Consultancy, Project Management, IT. He is an alumnus of IIM Kozhikode, specializing in Finance & Operations. He has also worked with TCS & Bristlecone in the past, and done internship with EXL Service. He also holds BE Degree in Production Engineering from Jadavpur University, Kolkata.
All views expressed in this article are author's own, and not related in any way to his employer.

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