Management: Time for consultancy to begin at home: A new venture has tapped into the growing desire of companies to reduce their dependency on outside expertise
Sunday 23 October 1994
Expenditure on consultancy is now on the agenda in many boardrooms as concern mounts over soaring costs, and sceptics question whether outside experts give value for money.
Concern was fuelled earlier this year by two government reports: The Audit Commission found that the National Health Service and local councils were spending pounds 120m a year on consultants. The most common reason given was 'lack of in- house skills'.
It also found that up to 60 per cent of consultants' recommendations were not implemented.
The Cabinet Efficiency Unit found that spending on consultants in the civil service had far outstripped savings.
Against this backdrop, it is hardly surprising that a growing number of organisations are using their own managers as internal consultants. This is a trend that should grow, according to Trainers for Change, which was set up in the summer and is already holding seminars and workshops.
Philip Albon, a director at Trainers for Change who used to work for Coopers & Lybrand, said the new company had identified an appetite for its services.
'With the pressure on costs, organisations are finding that for a range of projects the use of external consultants is prohibitively expensive.'
While conceding that external expertise is often helpful, Mr Albon counsels against employing consultants with an unfocused brief.
'By working more closely with consultants, organisations can reduce their outlay and get better value. Those with managers skilled in consulting will not have to pay for young MBAs who are sometimes trained on consulting jobs at the client's expense.'
He does not put Trainers for Change forward as a complete replacement for external consultants. But judicious use of outsiders could slash some hefty bills - the services of a senior partner in an outside firm, for instance, can cost pounds 1,900 a day.
Trainers for Change sprang from the consultancy culture and is a subsidiary of the management consultants, Beaufort Management. According to Mr Albon, it is the first in its field to concentrate on disseminating expertise to managers.
TFC trainers should know what they are talking about. They all have 'Big Six' experience, having worked for Coopers & Lybrand, Touche Ross, KPMG Peat Marwick, Andersen Consulting, Ernst & Young or Price Waterhouse.
Managers from British Telecom, British Gas, National Grid, the Ministry of Defence and Dunlop have already signed up for Trainers for Change courses.
They will learn the techniques and methodologies used by the Big Six consulting firms and, in doing so, cut bills and keep the management of change in-house.
Changes in corporate culture have bolstered the internal market within companies: personnel and training departments are now having to sell their services inside the company. The rise of the internal consultant seems a logical extension of this ethos.
Charles Handy, in his book, The Empty Raincoat, predicted that organisations would divide their work increasingly into 'project teams, task forces, small business units, clusters and work groups'. He argues that managers in organisations will increasingly work in a way similar to advertising agencies and consultancies.
Mr Albon thinks that 'in the fluid matrix organisations of the future, internal consultancy skills will become a premium commodity'.
Since opening for business, TFC has been getting a lot of course bookings from training departments. Instead of running standard courses on a regular basis, they are being asked to offer tailored solutions to situations as they arise in the organisation. Line managers are now internal clients to service departments.
As the two government reports show, the public sector has provided rich pickings for consultants. Market testing has opened up further possibilities.
Mr Albon thinks Trainers for Change is the first company designed to help other companies equip their own managers with consultancy skills. 'TFC trainers, who all have Big Six experience, can help managers drive successful change initiatives in-house at a fraction of the cost of hiring outside consultants,' he says.
It seems a seductive sales pitch.
Of course, to hone their own managers' consultancy skills, companies will have to call on outside expertise. But the investment should continue to give a return as long as a key employee who has been trained stays on the payroll, rather than invoicing the company on a daily basis.
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