Reference

Consulting glossary

A plain-English glossary of consulting terms — from methodology to billing.

33 of 33 terms

Billable hours: Time a consultant spends on work that can be charged to a client. Firms track billable hours against total working hours to measure utilisation and to invoice accurately.
Boutique firm: A small, specialised consulting firm — typically a handful to a few dozen people — that competes on depth of expertise and senior attention rather than scale.
Change order: A written amendment to an existing contract that adjusts scope, timeline or fees. Change orders keep additional work paid for and documented rather than absorbed.
Close-out report: The final document of an engagement, summarising what was delivered, what was learned and what the client should do next. It formally marks the work as complete.
Current state / future state: A pair of views used in most improvement work: how things operate today, and how they should operate after the change. The distance between them defines the roadmap.
Deck: A slide presentation used to communicate findings or recommendations. In consulting, decks often double as the written deliverable rather than merely supporting a talk.
Deliverable: A specific, agreed output the client receives — a report, model, workshop, dashboard or policy. Deliverables are named in the SOW so completion is unambiguous.
Due diligence: A structured investigation of a business, market or transaction before committing to it. Consultants are often engaged to run commercial, operational or technical diligence.
Engagement letter: A short contract confirming the consultant will perform defined work for a defined fee. It typically covers scope, fees, timing, confidentiality and termination.
Fixed-fee: A pricing model where the client pays a single agreed amount for a defined scope, regardless of hours spent. It shifts efficiency risk onto the consultant.
Fractional executive: A senior operator — CFO, CMO, COO — who works part-time across one or more companies. It gives smaller organisations executive capability without a full-time salary.
Gap analysis: A comparison of current performance against a target or benchmark to identify what is missing. The output is usually a prioritised list of gaps and the actions to close them.
Inception report: An early document, common in development and public-sector work, confirming the consultant's understanding of the assignment, refined methodology and work plan.
Issue tree: A hierarchical breakdown of a problem into sub-problems and testable questions. It keeps analysis structured and helps a team agree on what actually needs answering.
Kickoff meeting: The first working session of an engagement, where scope, roles, timelines, access and communication norms are confirmed with the client team.
KPI (key performance indicator): A quantified measure of progress toward an objective. Good KPIs are few in number, owned by a named person and reviewed on a fixed cadence.
Level of effort (LOE): An estimate of the days or hours, by role, required to complete a piece of work. LOE underpins pricing, staffing and any later conversation about scope creep.
MECE: Short for mutually exclusive, collectively exhaustive. A set of categories is MECE when nothing overlaps and nothing is missing — the standard test for a clean analytical structure.
Milestone billing: Invoicing tied to the completion of defined stages rather than to elapsed time. It aligns cash flow with visible progress and gives the client checkpoints.
MSA (master services agreement): An umbrella contract setting the legal and commercial terms for an ongoing relationship. Individual projects are then added as SOWs without renegotiating the terms.
NDA (non-disclosure agreement): A contract in which one or both parties agree to keep specified information confidential. It usually defines what counts as confidential, permitted uses and a term.
RACI matrix: A responsibility chart marking who is Responsible, Accountable, Consulted and Informed for each task. It is used to remove ambiguity about decision rights.
Retainer: A recurring fee that reserves a consultant's availability or covers an agreed scope of ongoing work. Retainers smooth revenue and keep advisers close to the client.
RFP (request for proposal): A formal document inviting firms to bid for defined work. It sets out requirements, evaluation criteria and a submission deadline, and expects a structured response.
Scope creep: The gradual expansion of work beyond what was agreed, usually without extra fee or time. It is best managed with a clear SOW and a habit of raising change orders early.
SOW (statement of work): A document defining scope, deliverables, timeline, assumptions and fees for a specific project. Where an MSA sets the terms, the SOW sets the work.
Stakeholder: Anyone affected by, or able to influence, the outcome of an engagement. Mapping stakeholders early tends to determine whether recommendations are actually adopted.
Statement of qualifications (SOQ): A document presenting a firm's credentials — experience, team, references and relevant past work — often submitted before or alongside a formal proposal.
Steering committee: A small group of senior client sponsors who oversee an engagement, resolve escalations and approve major decisions. It usually meets on a fixed cadence.
Thought leadership: Published work — articles, research, talks — that demonstrates a firm's point of view and expertise. Done well, it is drawn from real delivered work rather than generic commentary.
Time and materials (T&M): A pricing model where the client pays for actual hours worked at agreed rates, plus approved expenses. It suits work whose scope cannot be fixed up front.
Value-based pricing: Setting fees according to the economic value the work creates for the client rather than the hours it consumes. It requires a shared, explicit view of that value.
Workstream: A parallel track of activity within a larger programme, with its own lead, deliverables and timeline. Splitting work into workstreams keeps ownership clear on bigger engagements.