Management Consulting
In 2009 the captains of industry are seen in reference to measures they took in a bid to address the effects of the ensuing economic downturn. The internalisation of consultancy services was put into perspective. The need to source for external consultancy appeared to gain support. It is in light of that that a critical observation of consultancy services both by internal organisation mechanisms and third party groups is looked into.
Consultancy is mainly geared towards addressing of management needs of various companies. It indicates both the practice and industry of assisting business organizations in bids to improve on their performance levels. This is primarily achieved through the analysis of business problems already in existence. After coming up with such issues, development plans that seek to improve the state of affairs are designed for implementation.
Business organizations hire the services of management consultants for a number of reasons. The major objective rests on the fact that businesses aspire to gain external advice from qualified experts as consultants. The consultancy firms are basically at a pole position to offer invaluable contribution to business entities on the operation of business (London, 2007). Since the realisation was made that internal organisational consultancy mechanisms were failing, the need to engage external or third party consultancies seemed to gain ground.
It should be noted that consultancy firms duly understand the best practices in the practice of firms in a wide scale range of industries. The transfer of such desirable practices may not be easily doable from one company to another. This necessitates the acquisition of consultancy services by the firm that intends to adopt the desirable practices. The failure by market leaders to see these events in advance through the use of their internal consultancies played a significant role in paving way for third party interventions.
Consultancies are known to provide an organization with change management guidance. They also offer the advancement of coaching skills, guide on implementation of technology, development of strategy, andor operational services geared towards improvements (Hart, 2005). The consultants normally bring on board their methodological proprietary and frameworks that guide the identification of problems which serve as a basis upon which recommendations are derived. It is agreeable that consultancies that were internally designed were responsible for the inadequacies that came to the fore during the 2009 period (London, 2009). Going by the events prior to this period that witnessed the down ward trend in operations of business, there ought to be a position where the buck stops, and it must be at the internal consultancy departments of the captains of industry because it is from their activities that the effects spread.
Management and consultancy have become more prevalent in the recent times. They have also spread from the business community to the non-business arena. Thus the need for advice has also grown over the years. Consequently, the consulting firms have been put under duress in handling of their client needs. In respect to that upsurge in demand, there has been a need to have additional service providers in the industry of consultancy (Hahn, 2009). Thus the middlemen or the third party element has become fully incorporated into the consulting business. Normally, the firms that provide consultancy are truly big in size. That has called for separation of the accounting and consulting departments in these organizations to ease the problems associated with large scale operation.
As the industry witnessed an upsurge in demand and explosion of activities to be covered, some organizations found the need to establish their own sections of the consulting services. Other firms also began to hire internal consultants from external or within the corporations themselves. Internal consultancy groups are often formed around a section of areas of practice. They commonly include process management, organizational development, information technology, training, HYPERLINK httpen.wikipedia.orgwindex.phptitleDesign_servicesactioneditredlink1 o Design services (page does not exist) design services and development.
Instead of third party consulting, it is advisable to institute an internal mechanism that offers consultancy services for a number of reasons. To begin with, an internal consultancy unit, unlike a third party, is in a better position to work on issues affecting an organization from a familiar stance. This fact augurs well for the company because internal consultancy findings on a situation can be used in guiding the implementation part of a project. In using an external consultant, the process may be costly as additional costs arise. The time factor is also captured at this point.
If there is proper management of the internal consultancy mechanism, the evaluation of projects in light of an entitys tactical and strategic plans will go a long way in aiding the company in sorting out the issues under review. This means that organisations that offered the consultancy services got an upper hand in the sorting out of these problems because the behaviour of the business leaders in the period in question appear to have had disastrous effects.
Some information is supposed to remain private to a business or any entity. Such information may be sensitive in relation to the operations of an organization. In respect to that, it may be foolhardy to entrust such activities with a third party consultant. Engaging the services of these consultants may in the end leak vital information to potential competitors (Karnani, 2005). If your competitors in business get to know vital components of an organization like the strategic plans, financial position, etc. such disclosure would at the minimum expose an organization to severe challenges in the market. It is in view of this that a third party consultancy should not be encouraged by captains of industry as their very own continuity could be put on the spot.
In as much as information should not be disclosed to undeserving parties, in some instances, it is good to release information so as to help in addressing questions. In the period of 2009, it was necessary for example to raise common information in regards to a number of issues. In that respect, third party consultancies and not internal ones are in a position to generate this information that can go a long way towards addressing the issue. This in end may mean that third party consultancies become information sharing than it was the case earlier.
Another area of concern on consultancy relates to cost. The materials and time that is required by external consultants is relatively higher as compared to what internal consultants would offer given the same conditions. It is easier to keep an eye on the expenditure of an internal unit as opposed to an external group whose only link to a business would be the sourcing and offering of consultancy services. Costs form a very important aspect of company or organization operations because in the end, the focus is to maximize on profits while cutting on costs. Cost effectiveness is a key attribute of business operations, especially the captains of industry.
Following the events of 2009 and the behaviour of the market leaders, the cost has come to be a non-issue in consultancy. The focus has shifted to the quality of proposals and consulting services offered by the third party companies. This has made the consulting firms to make an upward adjustment on the pricing of their services to reflect the demand (Allen, William, Julia and Courtland, 2007). At times, the internal consultancies may not be up to the task at hand. If such a scenario arises, then it may become necessary to solicit for the services of third party consultancies. In that regard, third party consultancies come in handy towards helping to address serious issues that may be out of reach for the firms internal mechanisms.
The internal consultancies have been established so as to guide external ones in execution of major projects. The internal ones simply give direction to the external consultancies. This helps an organization to guard against disclosure of unwarranted information to the third parties. It also helps in directing events as per the requirement of the organization in question. In respect to this, the internal consultancies can also offer direction, monitor the execution of the project towards ensuring quality of work. Such a system may ensure quality, better delivery and overall operating association. The priorities of an external firm in offering consultancy services are dichotomized. The focus of an external firm may fail to capture the long term health of a business organization (Kandachar and Minna, 2008). In respect to that, an internal consultancy is preferable. In a nutshell, the objectives of a client are secondary to the aspirations of a third party consultancy.
However, in establishing an internal consultancy, the firm in question can gain advantages though it may come at a cost. The internal consultancy may fail to capture the much sought after objectivity by an organization. In this regard, the third party consulting agencies appear to have won the race in terms of quality of service against the internal consultancies. This is a shortcoming that should be addressed in order to check the concerns.
Equally important is the realization that an internal consultancy may not bring aboard the best practices from other organizations. But this can be mitigated by recruiting into the team a group of qualified and experienced individuals in the field of consulting. Alternatively, a diverse training strategy can be adopted to help develop the best personnel that guides in the consulting department. However, given a high level of competition, it may be too costly in hiring the top brains in consultancy though for the captains of industry, it may not be a big task as it can easily be provided for by the nature of their huge budgets. Another argument against internal consulting arises from the view that it cannot be measured to provide an exact figure attributable to the service. This does not however negate the importance that such a mechanism can play towards the achievement of organizational goals. It is often not easy to accurately offer measurements that capture the actual costs and benefits that accrue from an internal consulting group. On the face of difficult financial times, the internal consultancy firm is likely to face the axe. It can only survive if it has consistently proved its worth over the past. Otherwise, other measures like downsizing, budget cuts among other limits may be directed towards the department.
The importance of engaging consultancies whether internal or external cannot be overplayed. In simple terms, it plays a significant role in aiding business operations that would otherwise face difficulties or stall. However, certain negative attributes are equally inherent in the consulting service provision. The management consultants are in most cases criticised due to their overuse of buzzwords, something that undermines the subsequent consumption of such information. The consulting firms overly rely on the propagation of fads related to management (Prahalad and Hart, 2005). The consultancies are prone to coming up with development plans that are literary in executable by the clientele. This is a pointer to the mismatch that exists between the planning and execution. The consulting advice is believed not to be in synchrony with what business executives need or are unable to put into use. Actualising the plans becomes an issue that baffles implementation executives.
Despite high fees charged for consultation services, disreputable firms in the industry are often believed to be offering empty promises. They have been accused of stating what at times looks obvious. They also lack the requisite experience to authoritatively advice on the consulting service provision. The consultancies are also averse in respect to the kinds of innovations that they propose. They bring few innovations and fail to offer a generic and repackaged strategy. Such misguided approaches do not address specific client needs.
Another serious concern relates to the promise on delivery of sustainable results. After the engagement period between the firm in question and the consulting service providers, the expectation is that the intended or proposed results are to be attained. Sustainability is often preached by these consulting firms but rarely made operational. This may be due to the disconnection between the client needs and the consulting firms advice on the closure of the engagement time.
Further criticisms rests on the suggestion that organisations, in a bid to cut costs, may end up downsizing, an attribute that brings a ripple down effect to a good number of people within and outside the organisation. The consulting firms are also accused of reselling development plans to other organisations (Prahalad, 2004). This is a malpractice but the rising nature of demand in the industry means that such activities cannot be wished away. The proposal to downsize may have negative effects though it is popularly known to reduce the operational costs in any business entity. This does not affect the quality of audits to firms as it only offers the best way out for an entity that pursues profits.
Conclusion
The events of 2009 must have had an effect on both the internal and third party consulting services. However, there was a shift in the balance of the strength of the two. The need for third party consultancy services is seen to have gained a foothold in the industry as the internal seemed to have taken a downward trend. The quality of the consulting services has however been on the rise due to the ever improving nature of operations in business. The failure of market leaders to provide leadership was an issue of concern during the build up to the 2009 period.
The most noticeable thing that comes in the open through the essay is the realisation that consultancy is a useful tool in organisational goals and pursuit of development. The choice to engage a third party or internal consultants is a choice to be made by the top leadership of a business. However, as indicated above, the internal mechanism in offering consultancy has not wholly addressed the needs of an organisation, neither has the external mechanism. In respect to this, the two can be used together in coming up with useful information on the best way forward in organisational ventures. In effect, the quality of third party service providers has both been moved forward and retarded at the same time.
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