Internal consultant?

When planning for new change initiatives, many organisations consider the trade-off between either using an internal resource/consultant or hiring an external consultant. In the decision making process, a variety of factors should be explored. Given below is an overview of several key considerations that can play a role.

In principle, external and internal consultants possess the same characteristics: they are both tasked with solving organisational problems and implementing the proposed solutions in order to improve the performance of the organisation. Despite the similarities in their job description, there are several large differences between both types of advisors (as described in the section external vs internal). In addition to the advantages and disadvantages named for each type of advisor, several contextual factors and considerations remain in order to determine a preference for one over the other.

External consultants are mostly appreciated for their specialised expertise, their neutrality, or the sheer capacity they possess in comparison to the organisation. Internal advisors, on the other hand, are appreciated for their knowledge of the organisation, which includes its culture and ethos. Internal consultants are also better in terms of both cost-effectiveness as well as dynamism within the organisation.

The decision of whether or not external expertise is required for a particular problem and, if so, the extent to which such assistance is required, can be a challenging one for an organisation. Such a decision is often easier for large organisations that have well-developed internal consulting mechanisms, as it is often clear when a problem is large enough to exceed this capacity. Other factors such as whether the task requires extensive transformation, whether it requires extensive human capital, or whether it requires expertise in a particular field, can all help determine whether external advice is required or not.

An important task is to determine beforehand which problems an external consultant should solve. Some tasks are crystal clear: a consultant is hired to carry out a specific assignment. Other times, the task is less clear, and the duration of projects cannot always be clearly defined. When a task lacks clarity, it can often be clearly defined by the expected outcome. When organisations, for instance, want to improve internal communication, they must clearly define what outcomes the improvement trajectory must secure: are there goals objective (e.g. that everyone within the organisation can communicate directly with one another via a specially designed chat programme)? Or must the presence or involvement of employees improve at meetings? Is more cooperation needed between staff with different tasks? Etc.

Organisations must clearly define the task and draft what the expected (quantitative) end results are, which includes, for example, distinct timeframes, or (when relevant) the fee that external consultants will receive in exchange for their work. Furthermore, organisations must distinguish, in advance, which expertise and skillset an (internal or external) consultant should have in order to realise the drafted goals. Additionally, for any project, one must consider the working style and culture within the organisation, and the required profile the (external) consultant will need to fit to the organisational culture and the staff involved in the project.

Despite the many pros and cons, the decision of whether or not to hire an external consultant is ultimately a question of budget in many cases. In some cases, a specific budget or subsidy scheme may be available for the purpose of hiring externally, in which case the choice could become easier. However, when there are no such limitations, organisations must thoroughly examine the aforementioned aspects before making their decision.

Consulting Industry