This is a management speak for how much of your project budget will be consumed by the consultants. In a broader context it also applies to your company’s budget. You will find that consultants are always trying to get more of your budget. They always have a resource that can help, a new tool that would help you greatly, and a new process analysis method. They are always selling. Many consultants are not only measured on their utilization rate but also on how much additional revenue they are able to generate. They’re like a camel; once their nose is in the tent the rest of the beast is going to follow.
One consultant I know started off an engagement with a $50,000 assessment project and grew it into a $20,000,000 a year engagement. Some camel!
Now this behavior is normal and should be treated as business as usual. Were it gets to be problematic for a project manager is when there is more than one consultancy firm involved, either in the project or in your company. For now you have to handle the political maneuvering between those companies for a share of your company’s wallet. That infighting will be time consuming, because each firm will have their champions in the company and you’ll be dealing with sales pitches from them and the firms. Also the firms may not share information too readily because they are worried that that will put them at a disadvantage. Don’t down play their anxieties they can be real. The guy who turned a short assessment project into a multi-dollar, multi-year deal did it by replacing an existing consultancy firm. They will circle each other like dogs around a juice bone.
You’ll have to manage these competing firms and their interactions with your project. You’ll have to keep abreast of which of them has the ear of key executives in the company and also what skills they have. In management terms this is the equivalent of managing relationships between the countries in the Balkans. It will be an ongoing struggle.
The key point is not to become the champion of either one. Be seen as an objective person who evaluates them on their performance and skills. If they see you as favoring one over the other the disadvantaged one will move heaven and earth to undermine you. Trust me you don’t want to be in that situation.