Small businesses: should you use an ISO 9001 consultant?

6 August 2018

We receive mixed feedback about ISO 9001 consultants hired by small and medium-sized enterprises (SMEs). Council members in Southeast Asia, for example, report having had generally positive experiences; members in Europe and North America are sometimes quite critical. In this editorial we will examine some of the reasons for this disparate feedback. Our study will begin in Australia, then move west to Southeast Asia, India and Europe, and conclude with a survey of small businesses in the USA. The menu below is provided for ease of use.

In addition to our own research and feedback from Council members, our assessment will include a case study published by the United Nations Industrial Development Organization (UNIDO), along with analysis taken from a range of professional journals. We will also refer to articles published by the International Organization for Standardization (ISO) and the American Society for Quality.

Small and medium-sized enterprises (SMEs) represent the vast majority of enterprises worldwide.

ISO, Standards: Big Benefits for Small Business, 2006

Australia

A reasonable body of research has been undertaken to evaluate the impacts of ISO 9001 registration on small businesses in Australia and New Zealand. Unfortunately the only articles we are aware of that discuss QMS consultants in any sort of depth date back to the late 1990s; our findings, then, might no longer represent current perception and further research is encouraged.

Western Australia, 1997
A study undertaken in 1997 surveyed 160 ISO 9001-certified companies in Western Australia. Approximately 90% of these firms were small and medium-sized organizations: sectors represented included IT, sales and service, construction and transport, mining and engineering, and manufacturing. Just over 50% of companies polled were involved with manufacturing, a similar number had less than fifty employees.

Organizations in the survey adopted two primary approaches to implementing Quality Management Systems: the first was to provide staff with ISO 9001 training and encourage greater employee commitment; the second was to hire a consultant. Regardless of the size of the business, the use of consultants was widespread, with the majority of firms reporting they had used one. But while training – and indeed, ongoing training – was viewed as having had a positive, tangible impact on company culture, the use of consultants generated mixed feedback. Some companies complained, for example, that consultants often lacked knowledge about particular industries; another frequent criticism was that consultants focused too much on paperwork and unnecessary bureaucracy.

The costs of bringing in a consultant are quite often mentioned as prohibitive; however, the pressure to get ISO 9000 series certification combined with the lack of knowledge, and the lack of time, are forcing small businesses to look for external support.

Survey of small and medium-sized businesses, Western Australia, 1997

As with most surveys of this type, the organizations most enthusiastic about ISO 9001 were those who had implemented a QMS for internal reasons rather than external pressure. As has been observed very many times, the approach taken by small businesses when implementing ISO 9001 is a major factor in the success or otherwise of the outcome. If ISO 9001 is seen as a means of improving internal efficiencies, the result is more likely to be a workable system that leads to greater quality awareness, better awareness of problems within the organization and improved product quality. However, if the primary goal is to achieve certification in order to satisfy external pressure (from customers or government bodies, for example), it will be harder to realize improvements from the ISO 9001 system.

Australasia, 1997
Another study conducted in 1997 was described in Strategy for the Successful Implementation of ISO 9000 in Small and Medium Manufacturers, an article that investigated some of the factors that influenced SMEs before and during their ISO 9001 implementation. Firms in the Australasian region were invited to participate, but very little statistical data is presented in the published survey (no mention is made of how many firms were polled, for example). The authors of the study did however state that "some" of the businesses expressed dissatisfaction with external consultants they had hired, claiming they were costly and unhelpful. But the word "some" isn't quantified and so conveys little or no useful meaning.

South and Southeast Asia

In 2012 the United Nations Industrial Development Organization (UNIDO) published a report assessing the impacts of ISO 9001 registration on 604 small and medium-sized enterprises in South and Southeast Asia. The countries surveyed included Bangladesh, Bhutan, India, Indonesia, Malaysia, Maldives, Nepal, Pakistan, Philippines, Sri Lanka, Thailand and Vietnam.

Internal improvement was cited as the most important reason for implementing ISO 9001 (36%), followed by external pressure (25%), corporate or top management objective (18.5%) and access to foreign markets (14%). External consultants were used extensively during the implementation process (81% of firms hired one); the interactive graph below shows how their usage was especially prevalent among small and micro enterprises.

Percentage of SMEs using a consultant as a function of company size

1-5 employees
100% used a consultant

6-10 employees
95% used a consultant

11-15 employees
100% used a consultant

16-25 employees
96% used a consultant

26-45 employees
86% used a consultant

46-65 employees
87% used a consultant

66-85 employees
84% used a consultant

86-125 employees
83% used a consultant

126-175 employees
78% used a consultant

176-275 employees
80% used a consultant

276-425 employees
71% used a consultant

426-625 employees
79% used a consultant

626-875 employees
71% used a consultant

876-1175 employees
57% used a consultant

1176-1550 employees
63% used a consultant
Tap any light blue bar for info

1-51176-1550

Number of employees

While the survey revealed that the use of ISO 9001 consultants had increased during the course of the preceding decade, no evidence was found to show that hiring consultants resulted in shorter implementation or certification times. For the initial phases of implementation, consultants were used primarily to assist small businesses in developing their quality policy, quality manual, system level procedures and operating procedures / work instructions.

Concerns expressed by UNIDO about the use of consultants were twofold: first, a small number of SMEs said the consultant had done the management review for them (which is not something that can be delegated to a consultant); second, almost 10% of firms said their consultant had conducted all negotiations with the certification body.

Also of concern are the 10% of organizations who responded that the consultant had conducted all negotiations with the certification body, negotiated the contract with the certification body, and coordinated activities during the certification body's initial audit

UNIDO survey of ISO 9001-certified SMEs in South and Southeast Asia, 2012

ISO 10019: Guidelines for the selection of Quality Management System consultants
While the use of ISO 9001 consultants is not mandatory, their competence is a factor that impacts heavily on the implementation process and the success or otherwise of the resulting Quality Management System. This point is especially true for small and medium-sized organizations. The ISO 10019 standard is designed to help organizations select an ISO 9001 consultant: it provides guidance on how to evaluate consultants and how to use their services to maximum benefit without creating an ongoing dependency.

Unfortunately the ISO 10019 standard is neither well known nor widely utilized in South or Southeast Asia. One conclusion UNIDO drew from the survey is that small business owners should be made aware of the standard before they hire an ISO 9001 Quality Management System consultant and national standards bodies should be encouraged to do more to promote the use of ISO 10019.

ISO 9001 Consultants

According to the United Nations Industrial Development Organization's survey (2012), 81% of SMEs polled in South and Southeast Asia used consultants to help manage their ISO 9001 implementation

Assessment
As stated in the introduction, feedback about ISO 9001 consultants from our South and Southeast Asian members is generally positive, and in this respect UNIDO's findings echoed our own: their survey showed that 21% of SMEs were "very satisfied" with the consultant and 76% were "satisfied". Overall, this represents a 97% approval rate.

The propensity for Asian small and medium-sized organizations to use consultants is deeply entrenched and generally viewed as the de rigeur approach to achieving ISO 9001 registration. Only a small minority of SMEs implement ISO 9001 systems in-house. In our opinion, the reasons for this include:

Fees / Cost of living
Relative to average living costs and annual income, fees charged by ISO 901 consultants in India and Southeast Asia are generally far lower than those levied by their counterparts in Europe and North America. QMS consultants are hence a more affordable option than in the West, and small or medium-sized companies feel less incentive to implement ISO 9001 in-house.

Cautiousness / Reserve
Many small business owners in South and Southeast Asia are often cautious in outlook and surprisingly resistant to change and /or innovation. If a small business owner's peers or competitors have successfully implemented an ISO 9001 Quality Management System with the help of an external consultant, it is highly likely he will do the same, and in many cases will even hire the same consultant.

In-house implementation
The problem with template kits and other solutions designed to facilitate in-house implementation is that they are seldom (if ever) available in languages other than American or British English. In many Southeast Asian countries this makes them an undesirable and potentially risky option; in nations where English proficiency levels are low, template kits are simply not viable at all.

Education / Functional literacy
Implementing an ISO 9001 QMS in-house requires an educated workforce with a correspondingly high level of functional literacy. As numerous studies have shown, functional literacy in many South and Southeast Asian countries lags far behind Europe and North America. The importance of this point is borne out by the World Bank's 2007-publication, Quality Systems and Standards for a Competitive Edge, which observes that low levels of education are one of the more recurring barriers to the adoption of ISO 9001 in developing nations.

Conclusions
Small and medium-sized businesses throughout South and Southeast Asia have embraced ISO 9001 wholeheartedly – ASEAN's 50 Success Stories of Internationalization of ASEAN MSMEs (published 2017) illustrates numerous success stories in Southeast Asia. ISO 9001 consultants are viewed favorably and on the whole succeed admirably in achieving the desired results. As noted above, though, room for improvement exists, and we applaud UNIDO for drawing attention to the ISO 10019 standard and the advice they provide for choosing ISO 9001 QMS consultants

Europe: Spain and Portugal

We looked at two surveys that examined the use of ISO 9001 Quality Management System consultants in Spain and Portugal. Both surveys were undertaken in the early years of this century, but the points they raise are still apt and worth recording.

Catalonia, 2002
The first survey focused on ISO 9001-certified companies in Catalonia (a semi-autonomous region in the northeast of Spain) and assessed consultants in terms of the quality of their services. The questionnaire was based on the SERVQUAL model and designed to rank factors such as reliability, assurance, empathy and responsiveness. A total of 87 companies were polled, roughly 75% of which used consultants during their ISO 9001 implementation.

In general, businesses viewed consultants positively for the customer service they offered (ie, reliability, assurance and empathy), but gave much lower approval ratings for consultants' ability to get the work done on time (ie, responsiveness). The authors of the survey suggested that this "responsiveness" factor (also referred to as "scheduling") is something consultants urgently need to improve.

The authors also drew attention to the strong correlation between overall satisfaction and the size of the consultancy firm. Large consultancy firms with 50 or more employees, for example, obtained a "significantly higher quality rating" than smaller firms with only 2-4 consultants. This tallies with our own experience: global powerhouses such as Lloyds Register and our friends at TÜV Rheinland offer a vastly superior service, though of course fees can be very high.

Europe Survey

Spain and Portugal, 2003
This survey involved 305 companies in Galicia (northwest Spain) and northern Portugal, slightly more than 80% of which were classified as small or medium-sized, with an average workforce of 58 employees. Sectors represented included publishing, printing and reproduction of recorded media (3.0%), furniture manufacturing (3.0%), rubber and plastic products (3.6%), textiles (3.6%), transport (3.9%), non-metallic mineral products (4.3%), machinery and equipment (4.3%), chemicals and chemical products (4.9%), wholesale trade and commission trade (6.2%), food products and beverages (9.2%), fabricated metal products (11.1%), construction and related services (13.8%). The remaining 29% of companies were grouped into the largest sector, "other".

The use of consultants was very high: roughly 87% of survey respondents used one while implementing ISO 9001, and just over 11% continued to use one until certification was achieved. Usage was especially prevalent among SMEs – 92% hired a QMS consultant. Interestingly, companies in Portugal considered external consultants more beneficial during the implementation process than their counterparts in Spain.

Conclusions
First, satisfaction with ISO 9001 consultants was very high in both Portugal and Galicia. Smaller and medium-sized companies were slightly less satisfied than larger organizations, but overall ratings were still impressive. Second, the use of consultants in this survey was far higher than in comparable studies undertaken in, for example, other parts of Spain, Northern Ireland and Greece. This high usage, according to the survey's authors, is due to small businesses in Portugal lacking the "self-confidence" needed to manage ISO 9001 implementation by themselves.

Third, satisfaction with the Quality Management System was highest among companies that hired "hands-off" rather "hands-on" consultants. The difference here is that hands-off consultants will typically seek to maximize employee involvement during the implementation process and play only a background role in developing a QMS that's easy to operate and geared to the company's specific needs. In contrast, a hands-on consultant will tackle the bulk of the ISO 9001 implementation by himself (and at times micromanage the entire project), but may deliver a less satisfactory or workable solution.

USA

An article published by the American Society for Quality, Consultants' Style: Sometimes Less Is More, notes the different approaches adopted by consultants when helping to implement ISO 9001. While the article is interesting, its conclusions are drawn from a survey of less than a dozen companies. To gain a broader, more meaningful perspective, we conducted a survey of our own.

Our methodology was simple but effective: starting in early 2017 we emailed a brief questionnaire to several dozen small and medium-sized businesses across the USA, asking if they had hired external consultants to assist either in full or part with ISO 9001 implementation. Additional questions were designed to assess the consultant's performance and evaluate the success of the resulting Quality Management System. We also asked what factors motivated firms to get started with ISO 9001. A total of 39 companies responded: 72% stated they had hired a consultant; the average approval rating was just over 60%.

Business sectors represented

39 small and medium-sized businesses were surveyed; the figures at far right show the number of firms per sector.

Construction:

11


Manufacturing:

9


Agriculture:

6


Chemicals:

4


Software / IT:

4


Financial services:

3


Hospitality:

2


Motivating factors
The key factors that motivated survey respondents to implement ISO 9001 were internal improvement, external pressure and access to foreign markets. This is broadly in line with expectations: small business owners in the USA generally have a robust understanding of ISO 9001 and the benefits a well-implemented Quality Management System will bring; external pressures were cited as those coming from customers and purchasers; and regardless of the region or continent, internationalization (ie, access to foreign markets) is always a crucial motivator when deciding to implement ISO 9001.

ISO 9001 consultants: hands-on vs hands-off
Academics and management self-help books are fond of using "buzzwords" to describe consultants and the various methodologies they adopt. In the American Society for Quality article referenced above, for example, the authors distinguish between "tactical" and "strategic" approaches to ISO 9001 implementation. Other authors contrast "theorist" and "practical" consultants. We prefer more straightforward terms: hands-on and hands-off. While all companies that had used consultants rated them as either very or extremely costly, there were big differences in overall satisfaction when comparing hands-on and hands-off approaches. Let's take a look at these different styles of consultancy.

Hands-on consultants
The hands-on consultant typically prepares the bulk of the required documentation. He'll get heavily involved with most or all aspects of the company's internal operations and to a large extent micromanage the entire ISO 9001 implementation. Employee resistance to change, which is very often a major obstacle when setting up a Quality Management System, will be considerably reduced. In our survey, hands-on consultants had far higher approval ratings than their hands-off counterparts, but only during the actual implementation and certification phases.

Hands-off consultants
Hands-off consultants advocate the philosophy that quality should be nurtured from within, not from without: top managers must be the primary instigators of change and should be encouraged to manage the organization's ISO 9001 implementation. Hands-off consultants typically conduct the gap analysis and make a start on documentation, but after that take on passive roles as "guides" while the company develops its own quality procedures. The resulting Quality Management System is inevitably more in sync with the company's culture and needs, and consequently more likely to generate quantifiable rewards. The major problem with hands-off consultants is they place additional workloads on staff that very often lead to conflict and loss of interest in ISO 9001. In our survey, poor employee commitment was cited as the most significant barrier to implementation, and one that required time and extracurricular training to overcome.

Assessment
Feedback obtained from the "during and after" section in our questionnaire was especially interesting. Hands-on consultants, for example, were generally viewed favorably during the implementation phase (principally because they were deemed helpful and did most of the work), but much less so after they had moved on. The reasons for this were twofold: first, the consultant's micromanagement of the project created a dependency which left managers and employees struggling once the consultant's contract expired; second, companies were generally less satisfied with their Quality Management Systems, in some cases describing them as "not what we were expecting", "inappropriate for our needs", and even "unworkable".

Feedback about hands-off consultants was the mirror image: though viewed less favorably during the implementation process, they were held in much higher esteem in the months following certification. Once staff and managers had been trained to get the most out of the Quality Management System and could see the benefits it brought, the company's perception of the consultant changed markedly.

The consultant's report looked liked a specimen document that could have applied to any company, and we got the feeling our Quality Management System would have to be adapted to it. We also felt the guy did little to identify the needs of our business. Sure, he got us through the ISO 9001 process, but left us with a very complicated quality manual that's too hard to follow.

CEO of small IT firm, Massachusetts

In-house implementation
As stated, 72% of respondents used a QMS consultant. The remaining 28% implemented ISO 9001 in-house. The reasons for not hiring a consultant were quite diverse, but chief among them were:

  1. Costs. All survey respondents, whether they used a consultant or not, viewed consultancy fees as a deterrent.
  2. Prior experience with ISO 9001. In a few cases, senior employees had previously worked at companies that had implemented ISO 9001 and so were familiar with the requirements and confident enough to "go it alone".
  3. Peer advice. This applied mainly to small businesses that implemented ISO 9001 with the help of a template kit or certification package. Recommendations to consider these products came from peers who had successfully used them themselves.
  4. ISO 9001 training. Several respondents (predominantly very small businesses) said they had invested in training programs for their employees and on the strength of this had managed the entire implementation by themselves.
  5. Existing management system. Two companies said their existing management system was sufficiently robust to act as platform on which to develop and implement ISO 9001.

Conclusions
Our questionnaire was purposely brief in order to ensure the best possible response rate. But despite its brevity, a number of interesting results emerged, not least of which is that consultant usage in the USA is far lower than in South and Southeast Asia. Overall satisfaction with consultants averaged just over 60%, though care must be taken when interpreting this figure due to differing styles of consultancy and the way in which approval ratings fluctuated (often considerably) during and after implementation.

Unfortunately our questionnaire made no provision for assessing the role consultants played in helping certified companies transition from ISO 9001:2008 to the latest revision, ISO 9001:2015. This, we feel, is an important avenue for future research: questions need to be asked and answered, and we look forward to studies which examine not only feedback from companies that have transitioned to the new standard, but also the impact consultants had on the transition process.

Selected bibliography

Books / Reports

Guasch, J. Luis; Racine, Jean-Louis; Sánchez, Isabel; Diop, Makhtar (2007), "Quality Systems and Standards for a Competitive Edge", Washington, DC: World Bank Publications, ISBN 0-8213-6894-X

"Future of ASEAN: 50 Success Stories of Internationalization of ASEAN MSMEs", 2017, Jakarta: The Association of Southeast Asian Nations (ASEAN), ISBN 978-602-6392-81-7

"Hands-on or Hands-off: Effective Leadership and Management in SMEs", 2014, London: Chartered Institute of Personnel and Development (CIPD)

"ISO 9001 – its Relevance and Impact in Asian Developing Economies", 2012, Vienna: United Nations Industrial Development Organization (UNIDO)

Magazines / Periodicals: ISO and ASQ

Gasiorowski-Denis, Elizabeth (2006), "Standards: Big Benefits for Small Business", ISOfocus, Geneva: International Organization for Standardization, 3 (9): 9-42, ISSN 1729-8709

Iossifova, Albena ; Sinha, Kingshuk K. (2006), "Consultants' Style: Sometimes Less Is More", Quality Progress, Milwaukee: American Society for Quality, 39(12): 49-54, ISSN: 0033-524X, OCLC: 1587356

Journals / Conference papers

Brown, Alan; Van der Wiele, Ton; Loughton, Kate (1997), "Smaller Enterprises’ Experiences with ISO 9000", International Journal of Quality & Reliability Management, 15 (3): 273-285, ISSN: 0265-671X

Casadesús, Martí; Marimon Viadiu, Frederic; Heras-Saizarbitoria, Iñaki (2002), "Quality Service of ISO 9000 Consultants", International Journal of Quality & Reliability Management, 19 (8/9): 998-1013, doi:10.1108/02656710210438096, ISSN: 0265-671X

Fernández-González, Arturo José; Prado Prado, José Carlos (2004), "The Role of External Consultancy in Quality Management: Results of an Empirical Study in Spain and Portugal", Second World Conference on POM and 15th Annual POM Conference; 30 April 30 -3 May. Cancun, Mexico.

Gustafsson, Roberth (2001), "Experiences from Implementing ISO 9000 in Small Enterprises – a Study of Swedish Organisations", The TQM Magazine, 13 (4): 232-246, doi: 10.1108/09544780110366088, ISSN: 0954-478X

Mo, John; Chan, Andy (1997), "Strategy for the Successful Implementation of ISO 9000 in Small and Medium Manufacturers", The TQM Magazine, 9 (2): 135-145, doi: 10.1108/09544789710165581, ISSN: 0954-478X

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