In general, a consulting services model aims at eliminating organizational complexity first, the reintegrating functions in a simplified environment. Once the enterprise’s processes are reintegrated, the power of technology can be leveraged for harnessing a combination of insourcing, outsourcing and shared services.
The legal definition of consulting services is simply the provisioning of services by an independent contractor by means of consultations. Over time, “consulting” has expanded to include systems integration, and systems integration and managed services provisioning have become restructured and improved by inspirations of business consulting.
Today, business consulting is an essential arrow in every outsourcing service provider’s quiver. Indeed, whether the Sourcing Dilemma is resolved by insourcing, outsourcing or shared sourcing, modern business process management (“BPM”) depends upon the transformation of business processes to become efficient, flexible and responsive to change.
The Consulting Services Model
As a services delivery model, a consulting-services provisioning model marries business process redesign with transaction processing. As IBM now puts it in its advertisements, “innovation will come as much from process innovation as from technological invention.” A consulting model focuses on
- continous, rapid innovation in processes;
- the interaction, collaboration and common accounting for all interactive and interdependent processes; and
- the adaptation of knowledge management across the enterprise as a tool for enabling different business departments and functions to utilize intellectual property across the enterprise and the supply chain.
Under the consulting services model, the service provider sells outsourcing by first selling consulting services that redesign the overall supply chain for the global business enterprise. The redesign involves process management and accountability. The enterprise customer thus gains a new focus on those processes that are truly critical to building an innovative and unique position in its market. Outsourcing supports the newly focused enterprise customer by leveraging the service provider’s transactional processes and operational expertise.
Risk Mitigation
Service providers that promote their consulting services generally understand that their actions will have significant short-term disruptive impacts on the enterprise customer. They need to map those disruptions and identify how the redesign will justify pain.
Conflicts of Interest
Before Sarbanes-Oxley, consulting companies engaged in both the design and implementation of corporate structures and related technology processes. The Sarbanes-Oxley Act prohibits auditors from having affiliates do such work, so the technology providers have stepped in and acquired business consulting and BPM expertise.
As a result, consultants that provide both the business redesign and the implementation through transactional processing may be assuming new professional liability to enterprise customers, whose boards of directors now need to manage such potential conflicts of interest.
Human Capital Management
Human capital management risks are high whenever there is major change disrupts an organization. Rewards and incentives are being redesigned to include not merely financial options but also flexibility and more stimulating careers for those willing to live in a globally adaptive competitive environment.
As a result, the enterprise customer will need advice on emerging human capital risks. New considerations will permeate the employment relationship, including training, promotion, job mobility and collaboration tools to integrate the global enterprise. New considerations will also apply to the protection of intellectual property across borders.
Legal Implications of Consulting-Based Service Delivery Model
Consulting for supply chain automation, business process management and redesign of the global enterprise will may enable service providers to attract and maintain new markets. Along the way, service providers will acquire new legal responsibilities for the protection of the assets of the global enterprise customer. Lawyers advising parties to transactions involving business process innovation and management need a holistic and innovative approach to enterprise operations, risks incurred and risk management strategies.