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Internal Consultancies

#1 Internal Consultancies
24/08/2001 00:00


If a global organisation wanted to build an internal consultancy, in what ways would they benefit (in terms of short/long-term benefits and value added to the organisation)?

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#2 Re: Internal Consultancies
24/08/2001 00:00


Why would an organisation (global or otherwise) want to build an internal consultancy in the first place?

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#3 Re: Internal Consultancies
26/08/2001 00:00


The pros of an internal consultancy are typically:<br><br>

* more likely to ensure confidentiality is maintained<br>

* more cost-effective than hiring outside consultants<br>

* qualified resources can be more quickly mobilised if a critical project arises<br>

* excellent training ground for fast-track candidates in the company<br>

* can develop into a new business unit able to sell services to companies in related but non-competing areas<br><br>

Against this must be set a number of sizeable downsides:<br><br>

* Companies hire consultancies to learn and adopt best-practice and to ensure decisions are not affected by internal political considerations. By &quot;hiring&quot; internal consultants rather than external consultants, all these objectives are compromised<br>

* Harder to cut back on consultancy costs during lean times<br>

* Since the diversity of challenge an internal consultancy can offer is restricted, it is unlikely to attract the very best candidates - making its output second best<br><br>

Consequently, most blue-chips with their own consulting practices (British Airways, Deutsche Bank, Natwest to name but a few) continue to hire external consultants to supplement their inhouse capabilities. The long-term upsides are likely to be balanced/ rounded senior managers if the internal consulting team becomes the talent pool for such promotions; also an enhanced return and reduced outlay on external consultants - which are needed less extensively and when engaged will be able to achieve a lot more if aided by internal consultants

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#4 Re: Internal Consultancies
31/08/2001 00:00

Frank Morris


Internal consultancies do benefit global organisations - because they are cheaper if kept really busy on tasks that would have been let to external consultancies - provided they are not used for the wrong tasks.

the caveats:

Provided the consultancy is stocked with the right skills - and continuously replenished through external recruitment from major consultancies - to access their methodologies - and MBA schools - to keep the academic side up to speed.

Provided they are not used in situations that give rise to a conflict of interest - they cannot be - or will not be seen to be - objective on matters that affect the entire corporation or parts of it that any team member may have come from or go to after a tour of consultnacy duty.

When working for a major consultancy myself and working for clients with their own consultancies, I was often told that we were hired because we could tell &quot;the truth&quot; - and this concern over lack of objectivity aso applies to incumbent consultancies who, although external, are used so often that they cannot afford to upset anyone senior lest they lose work.

Hope this helps.

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#5 Re: Internal Consultancies
31/08/2001 00:00

Di Smith


I have several years experience of both internal and external consultancies. From an internal perspective I was the OD Director of a 1,0000 person internal consultancy (£50m turnover)- so have a fair amount of experieince of both the set up, running and development. I am now a director of a small external have sat on both sides of the fence!

Short term benefits:

Internal clients come to appreciate the cost (and value) of what work they need doing. In particular they become better at specifying what they require and ultimately produce much tighter specifications. They recongnise that 'time is money' and so projects are tighter than they might have been before.

From the internal consultants perspective they develop a new set of skills and learn to form client relationships. They also become better at scoping work and managing for deliverables.

Both in the short and long-term there are much better value projects as a result. In addition the company benefits by not needing to use so many external consultants - and it puts a pressure on the external consultants to deliver better value - and skills/experience that the internals don't have. If the organisation ensures that internals work alongside externals then skills transfer is an added benefit.

In the long-term:

Development of higher value, more cost effective change projects.

From an organisation development perspective knowledge share and knowledge growth can become a much more explicit outcome of working in a consulting style. If this is coupled with the use of technology then this is of enormous benefit to the company as a whole. From a global perspective this is invaluable - and also helps to strengthen the glue and cohesion across different geographies.

If the internal consultancy is well connected to the strategy development of the company then, in the longer term, they can gear up to deliver projects that stretch out beyond the planning cycle - and offer advice and feedback from their learning.

A further possibility is to cycle people in and out of the consultancy to spread the new knowledge and skills back into the organisation.

You didn't ask about the problems! It seems to me that internal consultancies are inherently unstable. The main problem is the political climate of the organisation. Forming client relationships, particularly at a high level, can be difficult. Also - objectiveity can be hard to maintain. You are both a 'supplier' to the organisation, while being a member of it....and subject to the need to survive political pressures!

If you need any further info then please e-mail me.



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#6 Re: Internal Consultancies
04/09/2001 00:00

Fiona Tordoff

Your question is one I would love to discuss...there are as I see it many benefits - I'm pro in house consultancies, I've led a team like it and now help other organisations deepen the capabilities of change agents (in or out of formal departmental structures). If you are getting a chance to set one up go for it and you will never look back.

I don't have a lot of time to answer in detail right now but did not want to lose the connection. Get back to me if you want in a few weeks time.

All the best,

Fiona Tordoff.

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#7 Re: Internal Consultancies
26/09/2001 00:00

Rob Beckley

Would it be possible to discuss this further and in more detail?

Kind Regards


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#8 Re: Internal Consultancies
26/09/2001 00:00

Rob Beckley

Di and Frank

Would it be possible to discuss this further and in more detail?

Kind Regards


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#9 Re: Internal Consultancies
26/09/2001 00:00

Rob Beckley


Thanks very much for your reply, too. I would greatly appreciate any more advice that you or Di or Frank could provide. If any of you can spare a small amount of time, I can be reached via email at either of the following: or

Kind Regards


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#10 Re: Internal Consultancies
07/11/2001 00:00

Iain Greenwood


I used to be Business Manager of an internal consultancy. If you are still investigating this avenue email me and I will talk through some of the issues with you.


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