Internal IT as 'consultants to the business': Good idea or bad?

How should we be organized? It’s one of the most common questions I hear in the office of the CIO.

For IT leaders, it’s a critical part of how they get close to and provide services to the business of which they are a part.

Over the last 10 years, I have seen a number of instances where IT has been “configured” or “set up” as internal consultants to the business. In other words, these companies seek to apply the principles of the operating model used by consulting firms as the basis for the operating model for the IT group within a larger organization.

In some cases, this merely means having two or three “consultant-like” managers who act as the primary interface to internal customer groups. In other cases, some go as far as creating a full consulting-like organization that issues proposals that compete with mainstream consulting firms like IBM and Accenture.

Before I share my feelings on this topic with you, let’s take a closer look at what’s behind the idea of having IT as internal consultants — the pros and the cons of this idea and what it’s trying to achieve.

The business case

There are three big reasons for setting up IT as a group of internal consultants. They go something like this:

1. Internal IT consultants are more invested in their companies. They put their company’s needs and priorities first. External consultants are more concerned with their own financial goals and selling the next engagement.
2. Internal IT consultants save time. There’s less ramp-up time on projects because the internal consultants already know the business and the people.
3. Internal IT consultants save money. External IT consultants have additional sales and marketing expenses, overhead, and profit requirements. Using internal resources to do the same work as external consultants saves money because the hourly rate is far less for internal people with the same skills.

Sounds like a winner

On the face of it, these benefits seem compelling. What’s more, configured as consultants, the IT group has a better opportunity to get closer to the business and to proactively meet its needs.

Unfortunately, this idea doesn’t quite hold up in the real world. In place of the expected benefits, I have seen instead a number of “sticky” problems brought on by this approach. They are usually some variation of:

1. Internal consultants often suffer from a skill gap. The title “consultant” brings with it an expectation of certain skills and expertise. Just calling someone a consultant doesn’t make him one.
2. Internal consultants lack external perspective. Internal consultants don’t have the perspective of working with other customers. They can’t bring the best practices of other corporations to their consulting roles.
3. Internal consultants lack the credibility of the outsiders. Right or wrong, there is a widespread perception that there are no prophets in their own lands. And this certainly holds true here. Internal consultants are viewed as colleagues not external experts — no matter what we call them. This limits their ability to challenge the status quo and drive change.
4. Internal consultants quickly turn into salespeople. Configured as consultants and taking their cue from their business model, internal consultants can’t help but start to “peddle” their ideas and projects to their business colleagues. After all, they have to keep busy or else they will be “fired.”
5. Internal consultants are subject to internal political constraints. It’s not easy to be part of an organization and independent from it at the same time.
6. Internal consultants suffer from the negative perception of all consultants. Consulting is often referred to as the second oldest profession in the world, with many of the same attributes as the oldest. ‘Nuff said.

My perspective - and it’s probably not what you’re expecting

Personally, I love the idea of having IT personnel function like consultants, but I absolutely hate the idea of calling IT internal consultants.

I think the idea of having IT function like consultants is fundamentally sound. A lot of the value external consultants bring comes from their highly competent execution and management of pretty straightforward, nonexpertise type functions, functions such as:

* Business analysis
* Process design
* Presentation development
* Meeting and workshop facilitation
* Project management

And last, but certainly not least, basic work practices like taking good meeting notes, following up proactively, and generally being on top of things.

Reading the above list, I trust you agree that every IT department should absolutely be building these competencies in their people at every level of the organization. It’s not hard to see that a move in this direction will dramatically improve IT’s standing within the organization.

However, the idea of calling internal IT professionals “consultants” and asking them to face off with customers like an external vendor just doesn’t work. It saddles the internal IT folks with all the baggage of external consultants without any of the benefits.