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As annual risk and regulatory spending passes through the £500 million mark in the UK, B.J. Richards, senior editor, Source Global Research, looks at how to choose a consultant and how to ensure you are getting the best value from the engagement.

With the list of risks facing UK businesses seeming to get longer by the minute, risk management has become a hot topic of late. Once primarily associated with the decidedly unglamorous world of regulatory compliance, the definition of risk has expanded considerably of late with headline stories like the VW emissions scandal putting reputational risk at the top of many a corporate agenda and cybersecurity failings like the TalkTalk hack making C-suites increasingly anxious about their cyber citadels. And all that less exciting regulatory work? Well, it’s still there, and it’s more complicated than ever.

The many and varied risks at hand - and the scarcity of the skills needed to address them - has translated into booming business for consultants. Our research shows that UK businesses saw their spending on risk and regulatory consulting go up 12 percent in 2015, and we expect it to increase another 10 percent in 2016. This means that UK businesses are now spending more than a half billion pounds on risk and regulatory consulting each year.

With that level of investment happening, it’s critical that businesses can be confident its money is well spent. How can you know if consulting is right for you? How do you pick the best consulting partner? And finally, how do you ensure you’re getting the most out of your consulting engagement? Read on for our primer.

Getting the right consultant for you

The most common reason to use consultants is to gain access to a particular set of skills that you don’t have - or don’t have enough of - in-house. In this case, those are skills related to risk, and you’ll want to find a consultant with experience handling the specific types of threats that are keeping you up at night.

But finding a consultant with the right risk experience isn’t your only consideration. It’s likely that you’ll also want someone with a solid knowledge of your industry - someone who speaks your language and knows your industry (including the competition) inside and out. Finding the right balance between risk management skills and industry-specific knowledge will mean thinking hard about the nature of your project, its complexity, and how important it is that someone ‘gets’ your business before they can help you achieve your objective.

Of course, there’s a strong possibility that you don’t know, exactly, what your objective is. You know there’s a problem to be addressed, but maybe you’re less clear on what needs to be done about it or what the ideal outcome would look like. An experienced risk consultant can help you figure it out, and figure out who on their team is best to help you get there. Other times, there’s a battle plan but not enough soldiers to take the field. In this case, consulting firms can provide bright, energetic people ready to take charge, roll up their sleeves, and get your initiative running without having to free up scarce resources in-house.

Making the most of your consulting engagement

So you’ve identified your risk challenge and have found the right consultant to help you address it. A good start! But now that you have a new (and probably rather expensive) resource at your disposal, how can you make sure you’re getting the most out of your investment?

Without doubt, the most effective consulting projects are those in which the client and the consultant work together as a team throughout the life of the engagement. And as with any team, communication, and a willingness to cooperate are vital. Here are some tips for keeping the lines open and making sure everyone has what they need to get your company where it’s going:

  • Remember that providing your consultants with too much information is always better than providing too little.
  • Consultants should receive a briefing on the project, the people involved, and the criteria on which they were chosen.
  • Make sure expected outputs and budget limits are understood.
  • Make sure you have a written agreement as to how the project will be conducted, including the project plan, deliverables, expectations, and who will be responsible for which of the project’s risks.
  • Identify problems early so they can be addressed before they get bigger and harder to solve.
  • Hold regular progress reviews and get any agreed-upon action points in writing.
  • Promptly provide any resources and information you’ve agreed to provide.
  • At the project’s end, hold a joint project review to discuss both the outcomes and the lessons learned on both sides.

Finally, keep in mind that while there are many things you can do to ensure the success of your risk management project once it begins, many of the factors that ultimately determine success or failure are set into motion before you even start talking to consultants.

If you’re able to identify the exact reasons why you’re turning to consultants to help address your risk needs, and articulate what you hope to get out of the engagement, and are able to get your internal team on board in advance, you’ll be half way to victory before you’ve even started.

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