The downside to using an external change agent is that they don't have a working knowledge or understanding of the company's culture. The other disadvantage is the organization's ability to maintain momentum after the change agent leaves. In conclusion, consultants bring a new perspective to addressing organizational problems and, therefore, are vital to the change management program. However, professional rules of conduct need to be observed and there must be ethical behavior on both sides of the equation.
In addition, advisors often work for specialized consulting firms, often with the biggest names in the market, and are considered credible advisors because of their track record. In-house consultants don't have this advantage. In general, many assume that external consultants have a higher level of knowledge and experience, largely because they are fully focused on their role as consultants and deal with multifaceted issues in several clients. Internal consultants may lose certain industry knowledge that external consultants have acquired in previous tasks.
In a way, external consultants succeed over internal consultants when it comes to taking the last possible steps to recover a big loss or prevent the company from closing. Research has shown that clients trust external consultants more than internal consultants. Compared to the most expensive (external) consultants on the market, strategy consultants, this statement holds up without a doubt. These advisors report to a central consulting department, which selects certain employees from different business units of the organization to execute the project.
According to a study conducted in the United States. In the US, the cost of internal strategic advisors for a typical project is four to six times lower than that of one of the three big strategic consulting firms (McKinsey & Company, Bain & Company, or The Boston Consulting Group). Finally, external consultancies, especially larger companies, often have more options when it comes to selecting the most suitable consultants for projects. In addition, many people hold a consulting position, either full time or as part of their daily tasks, without having a consultancy degree.
The other aspect that causes organizations to turn to external consultants is because these consultants have experience dealing with companies in similar sectors and, therefore, can apply their knowledge and experience to recommend specific changes. The sole purpose of external consultants is to propose innovative ideas to help companies, while internal consultants are the same people who work in the company. Finally, having an internal consulting unit can be a good way for organizations to position themselves in the consulting market and, therefore, attract the best consulting talent. While internal consultants may not be able to see beyond the company's immediate needs, external consultants can prepare the company for the foreseeable future.
If these two groups were included in the statistics, the domestic market for consulting would easily exceed the value of the real market for external consulting. Internal consultants have to work overtime consulting and discussing the problems the company is facing, in addition to their regular work. Technically, all team members work for the same organization, but the consulting division works like an outsider, since the consultants don't work for that specific business unit.
