Hello and welcome back to Smart Consulting Sourcing, the only podcast about consulting procurement.
I am Hélène and today we will be talking about internal consulting. But before that, let me give you a recap about last week’s podcast.
I talked about how not to fail on a consulting project in a fun way.
Listen to the complete podcast about how not to fail on a consulting project
When it comes to finding a consulting firm, you really need to know what your needs are. Are you looking for help with developing strategies or executing them? Do you want someone that can provide hands-on assistance as well as handle the day-to-day management of your project?
If so, make sure you find a consultant who has experience in those areas and is qualified for the type of work required. It’s also important to manage your project from day one by establishing clear expectations and deadlines; this will save both time and money which often leads to more success!
For some practical tips on consulting sourcing, check this article.
However, this week, I want to talk about Internal Consulting.
Over the past 20 years, the growth of in-house consulting groups has been one of the most notable elements of change in the fast-moving Consulting Industry. It is hard to evaluate the extent of internal Consulting.
But large companies such as Bayer, American Express, Google, Airbus, Samsung, Dell, SNCF, BASF, Deutsche Post, etc. have built internal consulting structures that can go from small ad-hoc teams to fully-developed groups of 100 consultants and more.
Even though internal consultants are permanent employees of an organization and typically only consult for one single ‘client,’ they provide, in many cases, equivalent services and are quite often former external consultants.
One could argue that Internal Consulting is the ultimate form of specialization in the Consulting Industry. However, another could counter that companies are losing the best practice dimension and independence.
Indeed, the debate could last for hours as both typologies have their pros and cons.
One thing is for sure though the internal consulting population is on the rise. So, let’s have a more in-depth look at the key elements underlying this phenomenon as internal consulting is here to last.
Working with consultants is easy
Not long ago, working with consultants was seen as a necessary evil, and we all know the joke about the consultant and the watch. However, executives have seen the benefits over the years to work with external experts. Their image has shifted to a more neutral position, from judgement to support.
As you can imagine, the growing population of ex-consultants in the Executive ranks helps as well.
Companies have understood the interest of dedicated teams working on projects independently from the rest of the organization. They have indeed identified a potential lever for improvement in creating teams with the same focus and ways of working as external consultants.
Also, there used to be an experience and impact gap between internal and external consultants. However, as the value chain is evolving, internal consultants have now access to better talent and methodologies. On some mainstream projects such as commercial excellence or lean, the impact from internal consultants is now equivalent to the one brought by external consultants.
Last, organization structures are now optimized to get synergies and make the most of the existing talents. If you put together the needs of all the business lines and support lines, most companies will be able to get a critical mass of similar projects that could justify building a dedicated team.
Working with internal consultants now brings similar skills and experience
When it comes to skills and experience, there are lots of commonalities between both populations. Internal Consultants are usually experts in their field or have just joined after a consulting career.
External Consultants maintain an edge on consultative selling skills and advanced capabilities. Internal Consultants will do the same with the cost-performance trade-off on capabilities that have started to commoditize.
A key differentiator relates to the intimacy with the company. Even though some external consultants tend to work with companies for years, nothing can replace being actually part of it to apprehend its culture and its core activities. Some projects require a strong intimacy with the company to be able to blend in or to provide an inside out Expertise.
The Internal Consultants are probably the right partners. But sometimes you need to feed the project with rich experience from other companies in the same field or on the same capability. It will then be complicated to top the external experts.
Top consulting firms live and die by their ability to produce fresh thought leadership. They need to be at the edge of their discipline to remain relevant. Consultants need to write white papers and research materials to climb the ranks of their firm. This is not the case for the internal consulting roles as they are like other employees focused on projects and execution.
How to implement an efficient Internal Consulting Group?
Now that we have examined the various aspects of internal consulting group, it’s time to understand how we can efficiently implement an internal consulting group?
When looking at your strategy, and the challenges you are facing in the next 3 to 5 years, you can already identify some recurring consulting needs. A recurring, long-term, and well-defined need for consulting services is often a good start to building internal consulting capacity.
However, deciding to set up an Internal Consulting Group is only the first step. A few elements need to be there to secure sustainable results. First of all, just like external consultants, internal groups need to have a clear value proposition.
Even though you want the group to remain flexible, their core expertise and focus have to be very clear. The group should describe the topics where their knowledge will have the most significant impact but also the subjects they will not touch under any circumstances.
As Coach Rasheed Wallace would put it: “Ball don’t lie”. In other words, the group has to demonstrate its value to the rest of the organization. The group has to win projects thanks to a superior impact on the organization.
Many companies have tried to force the use of internal Consulting Groups. They got the exact opposite effect they expected, and the Internal Groups were singled out as the root cause of project failure.
Last, even though the team could be kick-started through an injection of corporate funds, the team has to be able to fund itself by charging the internal clients. If the internal clients don’t see the value, the group will be short-lived.
Always measure the performance of your project
When you are running projects through your internal Consulting Group, it is essential to measure the impact of the projects and the satisfaction of your internal clients. Having their feedback on the work is a fantastic tool to build improvement and development plans.
Your internal consulting group will be able to grow their skills on the right dimensions and serve their internal clients better. It is also a compelling way to convince internal clients to use their services while comparing with similar external service providers.
You may still have many questions about the efficacy of internal consulting. Find answers to your question in this article.
Internal Consulting is a growing trend today. Internal Consulting groups offer organizations plenty of advantages starting from increased privacy and trust when working on sensitive projects to the probably most significant cost-effective solutions and the opportunity to lower expenses in comparison to hiring External Consultants.
When comparing Internal and External Consultants, we saw a few more distinctions: External Consultants have more independence and are able to provide a more objective point of view than their internal counterparts. They often possess expertise and skillset edge too.
When making a decision about your next project, it is worth evaluating all the elements, and picking the team of Consultants that is best suited for the project, and prepared to deliver the best results. And that marks the end of our podcast, folks. Next week, I want to talk about What went wrong with your consulting project? So, stay tuned.
Till then, stay safe and happy sourcing!
If you have other questions about internal consulting, remember you can contact me directly on LinkedIn or by email because I am always game for a chatBye and see you next week! Au revoir!
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