Kendall Consulting Group - Effective Uses of I.T. Staff as Internal Consultants Innovation Article

Effective Uses of I.T. Staff as Internal Consultants

• A large manufacture of home and office appliances needs to make significant upgrades to its systems. However, the business community and the I.T. group have long had an adversarial relationship and little respect for each other's perspectives. Systems projects have been negatively impacted as a result. What can the company's management do to improve the situation?

• The executive team of a large chemical company needs to make major cuts in its expenses to try to improve its earnings and thus, its stock price. The company decides to outsource its data center operations and application development to achieve cost savings. What can be done with remaining I.T. employees - especially the business-oriented I.T. staff?

• A retailer decides to develop a customer-friendly e-commerce application that will enable its customers to more easily do business with the company. The company's sales group is concerned that the I.T. group is not prepared to interact with the customers and could alienate them. What can management do to prevent this from happening?

Most large companies (and many smaller ones) are deciding to establish internal consulting groups. There are at least seven scenarios in which companies have effectively developed and used I.T. staff as internal consultants. Most of these scenarios are as a result of the "sometimes beneficial but often negative" impact of the 1990's reengineering, ERP and outsourcing projects on the I.T. staffs. However, regardless of the driving factor, all internal consulting groups are established with the expectation that they will improve not only business operations, but also the quality of I.T. systems, the success of the I.T. projects and the overall service provided by I.T. group.

Scenario #1 - Internal consultants as "bridge builders"

Effective use of I.T. is a necessity for most companies' survival. Management can not tolerate poorly functioning I.T. groups, adversarial relationships between I.T. and the business groups, and a track record of project failures. Many companies have developed internal consulting groups to turn around this situation. These groups have been staffed with systems analysts with a solid understanding of the business or business analysts with a basic understanding of I.T. Regardless of their background, the internal consultants are expected to ensure that systems are designed, built and used to meet business needs.

Scenario #2 - Internal consultants as "project leaders"

During the 1990's most companies did some type of reengineering, TQM or "lean manufacturing" to improve their efficiencies, cut expenses and improve competitiveness. Often these programs included headcount reductions or the outsourcing of large parts of the I.T. function. Now when faced with new strategic initiatives involving I.T. systems, these companies have insufficient resources or the wrong skill sets to do their planned projects. Management must choose between bringing in outside consultants to get the work done or developing the skills of their own remaining systems or business analysts to do the work. With the pain and cost of past uses of outside consultants still fresh in their minds, management has been reluctant to bring in outsiders. Instead they have chosen to train some of their I.T. staff in consulting skills and designate them as internal consultants to the business. The value provided from investment in these internal consultants, such as the improvement in system project results, has justified this approach.

Scenario #3 - Internal consultants as "business consultants"

Over the past decade many companies, driven by reengineering or required cost savings programs, outsourced their data centers, and software development and maintenance staffs. The small cadre of systems and business analysts that remained were designated as internal consultants and assigned to specific business groups or projects to dramatically improve the use of existing systems and the development of new systems. Despite some initial resistance by the business groups and a steep learning curve, the internal consultants usually did establish credibility and trust with business managers, and make a significant improvement to the business group.

Scenario #4 - Internal consultants as "change leaders"

Reengineering and ERP projects had a beneficial impact on some I.T. groups. Many in the I.T. groups developed new skills and understanding from their partnership with outside consultants on reengineering, ERP, SCM, CRM and e-commerce projects. The skills included business process analysis, process and systems design, change management and consulting. Smart management teams recognized that these skills were valuable and could be used on future projects. Internal consulting groups were formed in which these employees could continue to develop their consulting expertise while providing consulting services across the business. The consultants helped their companies achieve better success in projects, avoid the cost of outside consultants as well as provided a pool of talent from which new managers could be chosen.

Scenario #5 - Internal consultants as "customer interface"

With the advent of e-commerce, CRM and SCM applications, companies launched projects to form electronic links to their customers, suppliers, distributors and other partners. The responsibility for these projects often fell to the I.T. group. However, company management, in particular Sales, was worried that the I.T. group would alienate customers and key partners by their "techie" style and language. Business groups in the company found it hard to work with their I.T. group so why wouldn't others outside the company have the same experience. To address this concern, internal consulting groups were developed and staffed with I.T. and business staff. The internal consultants were trained on consulting skills and taught to interface appropriately with outside groups - especially customers. These internal consultants took the lead in designing and testing the systems in the field, and training customers on their use.

Scenario #6 - Internal consultants as "internal experts"

There has been a shift in the project focus of many companies. Whereas many companies did large-scale systems projects such as Y2K, ERP and SCM in the 1990's, the recent economic climate has required cut backs on systems projects and I.T. groups. Companies have shifted their I.T. priority to less aggressive system projects such as operational systems improvements. Knowledge of the company, its business processes and existing systems is essential to these projects. Outside consultants do not possess this knowledge, and it would take too much time and cost to educate them. Thus, companies have staffed internal consulting groups with those of their I.T. staff who have both in-depth knowledge of their company, its business processes and systems along with an aptitude for consulting. These internal consultants are provided consulting skills training on an "as-needed basis." Project results have been significant.

Scenario #7 - Internal consultants as "business case builders"

Today systems projects do not get approved without the buy-in of the business community so the I.T. group needs to work with the business community to evaluate the potential benefit of an application and to develop a business case to "sell" project. Many companies have found this task beyond the skill set of most in their I.T. groups. As a result they have established a group staffed with people from both their I.T. group as well as the business who can build a business case for management. Internal consulting groups have been instrumental in helping their companies wisely select and invest in those projects that have significant business value.

Development of internal consulting groups is one of the biggest and most beneficial changes going on in I.T. groups today. However, establishing such groups is not "a slam dunk." It requires planning, preparation, training and management leadership. Just renaming I.T. staff as consultants isn't enough for success.

To work effectively, these consultants need to have a set of basic and advanced consulting skills (see companion article) and procedures outlined in some of the other articles on our web site. Leaders of these new groups should also understand that internal consulting groups do not have the same business model as other parts of their corporation. These leaders need to know how to set up and run a consultancy (even though it is an internal group).

Expectations are high for the internal consultants and they must meet a high performance standard. Most business managers have experience with working with outside consulting companies and expect the same level of service and the same "consultative approach" from their internal staff groups. To win the respect and trust of the business managers, internal consultants must have the right skills and expertise as well as well as the culture and procedures to support them. I.T. is strategic to companies, and internal consultants are being relied on to ensure that systems projects are a success.

This article has emphasized the use of I.T. staff as they transition to internal consultants. We have also worked in similar ways with companies making these transitions from within the human resources, finance, manufacturing/operations and marketing functions. The results can be the same regardless of the base from which existing staff are drawn.

Many business executives and leaders of internal consulting groups have turned to Kendall Consulting Group to help them establish internal consulting groups and to train them in the basic and advanced skills they need to be superior consultants. Some companies have even turned their internal consultants into external consultants - those who sell consulting services on the open market. If you would like to learn more about the above trends or about our training programs, please contact us.

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Innovations

Links to other articles at KCG's website

Innovations Articles

• Measures of Success for Internal Consulting Orgs (NEW!)
• Consultative Selling (New)
• Trends in Consulting
• Commentary on Trends in Consulting
• Marketing of Consulting Services
• Skills and Competencies of Successful Consultants
• Consulting Skills Development Experience
• Effective Uses of I.T. Staff as Internal Consultants
• Strategy Implementation
• Visit to an Operational Excellent Company
• Organizational Due Diligence (Mergers and Acquisitions)
• Principle Driven Operations
• Change Management
• Education's Role in Change Management
• Communications and Change Management
• Value Disciplines
• Role of IS Strategy in Making Market Leaders
• Strategic Planning and Change Mobilization
• Project Management
• Grow Your Own Consultants

Archive Articles (below)

• Designing Executive Information Systems
• Executive Information Systems: An Overview of Development
• Implications of Transition From an Industrial Era to One of Information
• Critical Success Factors Techniques can Apply to Team Management, Too
• Decision Scenarios Ensure Information System Meets Business Needs
• Critical Success Factors : Helping IS Managers Pinpoint Information Needs
• Combining Quality and Reengineering for Operational Superiority
• Steering IS Committees Straight
• Internal Consultants and a Consultative Approach
• EIS Plays Critical Role in Reengineering
• Rapid Software Selection

Kendall Consulting Group is an international general management consulting firm specializing in strategy execution, change management, and executive education. We invite you to contact us for how we might help you and your company grow and prosper.

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