The benefits of owning risk

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    October 28, 2022
The benefits of owning risk

Staffing companies are gearing up to take market share from consultancies, owning more risk may be the only way to keep the wolves from the door.

Technology delivery has risks

All projects sit on a sliding scale of risk, not more or less, but who owns it. Does all the risk sit with the client or is the requirement defined in advance with the consultancy responsible for delivery?

Agile ways of working have created an environment that encourages larger consultancies to embed employees in client organisations on a time and materials basis. This offers complete control of the project to the client, but also all the delivery risks. If the client had enough experience or expertise to deal with this risk, they wouldn’t have to engage with the consultancy in the first place, contractors would be the answer.

Consultancies have embraced this way of working with open arms, it delivers predictable income at low risk, and more people equals more income.

Who owns the risk?

The gap between a staffing agency delivering a group of individual contractors and a consultancy delivering a group of individuals has been narrowing for some time. As competition tightens margins in the staffing industry, there has been a push to seek greater margins in delivering projects. Procurement departments are also creating a pull in seeking greater cost control over long-running projects.

To differentiate themselves from staffing agencies, consultancies must take on more delivery risk and deliver genuine consultancy. This could be as simple as maintaining the continuity of a team with expertise in a specific area, all the way up to offering a defined outcome for a fixed price.

Defined outcomes

Delivering defined outcomes projects requires not only expertise in a field but a willingness to work in true partnership with a client, taking on delivery risk in exchange for the client’s financial risk. So long as all parties’ responsibilities are understood, and the scope is kept small and defined outcome, projects can be beneficial for everyone involved.

San Digital delivers defined-outcome technology, strategy, and design projects for clients. We strongly believe it gives the absolute best chance for project success, by keeping both client and consultancy fully engaged and focused on the end results.

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