Many global corporations use internal consulting groups. However, it is unclear that apart from consulting spend cost savings and talent development any other benefits are being achieved. In fact in some cases there is value destruction.
Clearly internal consultants cost less than external consultants do – saving 60% on an average day rate. Note that companies need to ensure they are cross charging costs rather than providing internal consultants “for free”. Internal groups are also great talent development vehicles; exposing consultants to a varied business areas, problems and senior stakeholders. The key is always to then place them into challenging roles in the business after their stint in internal consulting or risk losing them.
Critically, where internal consulting groups may fail to deliver is 1) in their ability to provide comprehensive and rapid output equal to or better than external providers can (as they are frequently more junior/inexperienced) and 2) in their ability to provide the required objectivity and external view point required to push for the most valuable strategies and solutions. Internal consulting team leads may not want to truly challenge their “clients’” if they know that the “client” is also their potential boss – thus frequently diluting the recommendation and the value of the engagement.
Thus the main question for the organisation. Is consulting spend savings and talent development via an internal consulting group more important than the value of the solution developed – and how are companies managing that balance?
