Classifying Labor - Consultancy or Staff Augmentation

This category manager from a buy-side company is responsible for services spend, specifically business consulting spend. 

Within their sourcing organization and their lines of business, there is disagreement on when an external resource need is consulting or staff augmentation. 

1. How does your organization differentiate between staff augmentation and consulting services? When is it appropriate to use a Business consultancy firm vs Augment Staff?  Is it determined by activity type, duration, deliverables or something else? Are their guidelines or selection matrixes to guide stakeholders on the appropriateness of one vs the other?

2. Furthermore, how do you benchmark rates for consultants between multiple vendors within the same category of spend? How do you ensure that, for example a Regulatory Specialist from firm A, has essentially the same skills, qualification and pay rate as a Regulatory Specialist from firm B and C? 

3. How is staff augmentation spend categorized? Does it all fall under an HR/Human Capital category or is it aligned to the respective category of expertise (e.g. IT for development work).  

If you prefer a conversation on the topic, please reply to this email and SIG will arrange.


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