The rise of internal management consulting groups

At first glance, this topic may not look like anything new to you; nor to me. After all, it is a routine fact that today they hire many corporations hire business consultants all the time. I'm guessing, as we speak someone out there has hired a consultant for an outside perspective of a specific business matter.

Over the years, an endless number of companies have outsourced this task to specialists. But in recent times, an important change in the industry has been the spin-off or separation of the consulting units of large diversified firms. Although an initially expensive proposition, the long term benefits of setting up such a group eventually out-weighs the cost. These corporations have set up their own internal consulting groups, hiring internal management consultants either from within the corporation or from external firms employees. Many corporations have internal groups of as many as 25 to 30 full-time consultants catering to functional areas such as organizational development, process management, information technology, design services, training, and development.

But before a corporation steps into the task of creating its own internal management consulting group, they need to be conscious of and consistent with how this internal cost is accounted for on both a project and organizational level. At the end of the day, it needs to be cost effectiveness as well as provide significant value to the organization's operations. On one hand, these internal groups are capable of evaluating the engagement on projects in sync with the corporation's strategic and tactical objectives. Besides the low degree of dichotomy in terms of priorities (They put the company objectives first) and less ramp up time on a project due to its familiarity with the corporation, internal consulting groups also ensure that vital corporate information is not leaked out and is kept private. Moreover, the time and material cost of internal consultants is significantly less than external consultants operating in the same capacity. But the crucial difference lies in the fact that, unlike external consultants, the job of the internal management consulting team does not end with the mere presentation of the business solution. They are equally are involved in the monitoring and implementation of their recommendations.

However, there is always a flip side to everything good. The most important limitation of internal management consulting groups' lies in the fact that they fail to bring the ‘objectivity' factor to the table s well as the best practices from other corporations like an external consultant can. Moreover though, it is often difficult to accurately measure the true costs and benefits of an internal consulting group. Last but not least, these groups pose an obstacle to the Human Resource department as well as the level of compensation in the consulting industry is high, it becomes difficult to attract good talent.