Management Consulting

Consultant standing with his arms crossed

Many organizations rely on services like management consulting to improve performance. This particular service allows firms to identify any internal strengths and weaknesses including organizational inefficiencies. Having a good understanding of these inefficiencies allows firms to develop plans of improvement. Management consultants usually have an area of expertise. Their services can be valuable since they are able to provide firms with objective and unbiased advice.

Internal Consulting

In some cases firms will hire their own internal consulting group. This can be beneficial to organizations who continually track and monitor organizational efficiency. Typically, internal management consultants will focus on specific areas such as organizational development, training and design.

One of the most attractive features of internal consulting groups is that company information is kept strictly confidential. In addition, the consulting groups will evaluate the organization’s performance while considering the firm’s specific goals and corporate values. Many firms also decide to hire their own internal consultants because the costs can be significantly lower than would be the case if an external firm were hired to provide the services.

However, despite the growing popularity in employing internal consulting groups, there are also some disadvantages. One of the most cited setbacks associated with this method is the fact that the firm is not obtaining objective advice. In addition, because internal consultants are not regularly exposed to other firms, they will not have a good benchmark to measure the organization’s overall performance and efficiency.

External Consulting

As previously stated, one of the greatest advantages of external consulting is that the firm will be provided with objective recommendations. This can be beneficial to firms that wish to revamp their business strategy or simply to take a fresh new approach to certain aspects of their operations. Because an external firm will deal with many different clients, they are also in a better position to recommend best practices that were successful for other firms. In addition, an external consulting firm will not be restricted by any political factors that may be present in their client’s firm.

However, there are also some disadvantages associated with external consulting. If a firm retains consulting services from an external firm, the project may take longer to complete since the consultants will not have the same familiarity with the internal corporate culture of the firm. There may also be considerable disagreement in terms of which direction the firm should go in. In addition, the costs associated with hiring external consultants are generally much higher.

Conclusions

Management consulting is an effective way to identify the firm’s strengths and weaknesses. Although there are different advantages and disadvantages associated with internal and external consulting, firms should base their decisions on their overall objectives. If a firm wishes to obtain a fresh unbiased recommendation, then it is wise to employ an external consulting firm. However, internal consultants are a very cost effective way to obtain information on general inefficiencies in operations and recommendations of improvement. In addition, internal consultants will generally have a better idea of the firm’s corporate culture, and will ensure that any trade secrets are kept strictly confidential. However, if a firm is concerned with the overall competitiveness, external consultants can provide best practices and benchmarks because of their exposure to many different firms.