internal vs. External Business Consultants

You now need to know the difference between  internal vs. External Business Consultants to develop your business, reduce losses, and increase profits for your company

What is an external consultant?

An external Business consultant is a professional consultant who is not already employed by a company. A company, business, or organization hires an external consultant to advise them on identifying and solving problems within the organization. Companies can find external consultants through referrals, recruitment agencies, and consulting firms.  

What is an internal consultant?  

An internal Business consultant is a specialized consultant who is already employed by a company and usually works in the human resources department. An individual in this position may also work with a company’s quality control department or another department that handles employer-employee relations. 

An internal consultant may report directly to a company’s senior management or often works with senior management on strategic planning.  

Types  internal vs. External Business Consultants

Both types of consultants can take on the following roles

Business consultant  A business consultant is a consultant who focuses his or her expertise on B2B services or corporate programs and policies. External and internal business consultant positions  include: 

 Business Consulting

 Consultants in this role can provide expertise on business practices and methodologies related to every part of the corporate structure.

  Sales Advice

Sales consultants can advise companies on how to increase sales and generate more revenue. 

 IT Consulting

 Consultants in this role  help companies with their IT practices and use of technology.PR Consultant  PR consultants consider all aspects of an organization’s public image.

 External and internal PR consultant positions  include

 Social Media Consulting

 Consultants in this role can provide advice on effective social media practices, campaigns, and profiles.

  Marketing Consulting

Marketing consultants can analyze a company’s current marketing plan and make suggestions for improvement.

Image Consulting

Consultants in this role advise on changing, improving, and maintaining a company’s public image. Business Consultant Management consultants are external or internal consultants who provide guidance on improving management techniques, processes, methods, and strategies.

internal vs. External Business Consultants positions  include

 Human Resources Consulting

 Consultants in this role can review a company’s human resources practices and programs and develop plans for strategic change.

 Operations Consulting

 Operations consultants focus on optimizing a company’s operational practices and can advise companies on more efficient operating methods and techniques.

 Financial Advice

 Advisers in this role provide guidance on efficient financial transactions and identify problems within the financial system and attempt to fix them.

Key Differences Between internal vs. External Business Consultants

There are some key differences internal vs. External Business Consultants including:

Clients

 The biggest difference between external and internal consultants is their clientele.

 External consultants have a diverse clientele and can  work for many organizations.

 They usually don’t  work  with a single company on an ongoing basis. Because internal consultants work continuously within the company and don’t seek work from external companies,  their clients are always the same.

 Length of partnership 

Another difference between external and internal consultants is the amount of time each type of consultant spends with a company

 External consultants work to complete a project or task and then  leave the client. 

Therefore, this type of consultant works for the client on a short-term basis. Internal consultants work continuously  for their employers, so their relationship with the client is long-term and ongoing. 

Familiarity

 External consultants usually don’t know their clients unless they are regular customers. While this has its advantages, such as being able to see the problem from a different perspective, it also has its disadvantages, such as  being ignorant of internal  politics and issues. 

Internal consultants  usually know their clients well, since they are already employed by the client’s company. Therefore, they may be well-suited to resolve conflicts related to complex internal issues. 

External consultants usually focus on a specific area of ​​the company that needs to be improved within a certain period of time, so their projects will be very specialized.

 Internal consultants usually work on maintaining solutions to problems, programs, and policies, so their projects tend to be less specialized and more general.

 Price

 Companies hire external consultants on a contract basis, while companies with internal consultants already have these consultants on the company’s payroll, so the cost of external and internal consultants is different. 

Therefore, there is no extra cost when using an internal consultant, but there is an extra cost when hiring an external consultant.

However, if a company does not have an in-house consultant or if the consultant does not specialize in the area that needs improvement, the organization may incur extra costs in hiring an external consultant.

While internal consultants are subordinate to the organizational hierarchy,  external consultants operate at a certain distance from the organization and, as a rule, provide impartial and independent advice. On the other hand, external consultants have a strong interest in receiving regular contracts when internal teams need to consider influential stakeholders who may affect their future careers. Therefore, they tend to be very careful about their conclusions and how they communicate them if they pose a significant threat to future revenue streams. There is certainly independence from stakeholders. Perhaps because of power.

  Skills and Experience  

When it comes to skills and knowledge,  both groups have a lot in common. Most in-house consultants are experts in their field or  just joined  after working as consultants. 

When it comes to consultative sales and advanced skills, external consultants have the advantage. 

When it comes to cost vs. performance tradeoffs for increasingly commoditized features, in-house consultants will do the same. One of the characteristics that distinguishes one firm from another is its closeness to the company. 

Some external consultants have been working with companies for years, but there is nothing better than being  part of the company to understand the company culture and key responsibilities.

 For some projects, you need to get to know  the company well to blend in or provide an insider perspective. Perhaps the best partner is an in-house consultant. But sometimes, you need to bring experience from other companies in the same field or with the same skills into your project. That makes it  hard to compete with outside experts. 

Top consulting firms live and die by how well they can develop new ideas. They have to be at the cutting edge of their field to stay relevant.

 Consultants have to write white papers and research papers to get promoted within a company. This is less important in an in-house consulting role, because like any job, you’re focused on completing projects and tasks.

Relationships

It’s lonely at the top. CEOs and top managers often find it difficult to discuss sensitive topics with their executives.

 They often value having experienced and trusted advisors who are independent of the company. Indeed, in terms of  added value to policies, external consultants are better than internal ones.

 On the other hand,  when it comes to communicating with the team and making changes, the internal route is often easier. 

This is especially true when launching a program that doesn’t require strong ties to senior management. 

When influence depends on how influential the advisor is within the company, establishing ties to senior management or the board of directors is important. 

External teams often have  better relationships with this group.

  Behave External 

experts always have the company’s interests in mind. Some professionals even choose to buy shares in the companies they help or get paid in stock, showing how dedicated they are despite the possible conflict of interest. Consultants, on the other hand, make their living by selling projects and ensuring they continue to operate. During their assignments, they keep in mind their goal: achieving a  satisfactory outcome. 

They are also constantly thinking about selling the next part of the project or linking it to another project. In-house experts will not be as enthusiastic about this goal because they are selling another project within the company. 

They will also be more focused on making a difference because they are involved. However, no case is perfect. Instead, they will be focused on getting to the next step with the company and, most importantly, not putting the company at risk. 

This goal can make it more difficult to complete the project completely. 

Implementation 

 Do you need a consultant to help you diagnose a problem or design a strategy? Or do you need support in implementing the decisions? It’s rare to find a consulting firm that can do both, and implementation consultants are usually less expensive than strategy consultants. 

Typically, per diem rates for external consultants range from $1,000 to $10,000 per day, depending on the consultant’s skills and experience.

 As a result, many companies focus their consulting efforts on tasks they can’t handle themselves. 

For example,  say they have a large initiative and they hire consultants for only the parts they can’t do themselves and keep the rest in-house.

FQA 

 What is the difference between an in-house practitioner and  an external practitioner?

 Some key differences include: 

In-house practitioners are generally less trustworthy than external practitioners. External experts do not have direct access to resources and may take additional time due to communication limitations, which further delays the completion of the assessment.

What is the difference between an internal customer and an external customer? 

Internal customers are part of your infrastructure  through direct work, provision of resources, delivery of services, etc., while external customers are at the end of the process and purchase your company’s solution. That is precisely why it requires different communication and relationship strategies.

 What is the difference between internal and external strategy?

Internal factors inform and influence an organization’s decision-making process. External factors provide insight and considerations for an organization’s decision-making process. They are primarily focused on factors within the organization. It focuses primarily on factors external to the organization