Consulting Q&AWhat is internal consulting?
Malte Mueller asked 2 months ago

1 Answers
Mikel StasiukMikel Stasiuk answered 1 month ago

The world of consulting witnessed the rise in the practice of internal consulting. The job of an internal consultant, at first glance, is not much different from that of an external consultant, who is hired by a company to help it improve its business.

Just like these third-party consultants, their internal counterparts offer strategic advice on diverse management and organizational matters ranging from finance to mergers and acquisitions, and from resource planning to IT revamp. However, internal consultants are the employees of the company that is using the consultancy, and as such, they offer their advisory services to only one organization.

Here are five factors that constituted to the rise of internal consulting:

Pressure of increased costs: While most Western organizations use consulting, the high costs and demand for specialized personnel have encouraged some clients to look for alternative solutions.

Rise in the fee: A similar trend has occurred in consulting fees as well. While companies are investing in consulting more than they ever have, the top players have upped their costs per consultant. With OPEX constraints, executives must find additional ways to obtain low-cost consultant support.

Democratization of knowledge: Furthermore, working with consultants used to mean discovering new ideas. But due to the commoditization of management theories and techniques, firms can now quickly acquire expertise and eliminate the need for external consultants.

Familiarity with the organization: Internal Consultants can also swiftly use knowledge and experience because they only work with one customer in one industry. Instead, they develop a closer relationship with the firm, its products, and its culture.

Need for Privacy: Lastly, several firms understand the importance of confidentiality. Many external consultants have built a business collecting client data and selling it to competitors. In some projects, working with internal teams may be the best way to safeguard secrets.

Large organizations generally have a team comprising internal consultants. Whenever in need for any advisory service, these organizations evaluate the nature and extent of the expertise they need and perform a cost analysis. Except the cases that call for huge human and financial resources, they opt for internal consultants.