Internal vs External Consultants - Peter Gane

Presentation to the IIBA UK South West Branch Event –Thursday 10th February 2011 ‘Can in-house Business

Analysts compete with external consultants?’

Peter GaneBusiness Consultant Edf Energy

IIBA 10th February 2011

My thoughts (and those of my colleagues) on the often emotive topic of

‘Can in-house Business Analysts compete with external consultants?’

Questions as they arise, but I may ask to respond later on

But first, the Safety Message of day…

Safety Message of the day

EDF Energy is committed to Safety and has an on-going ‘Zero Harm’

objective. Each day we have safety messages (depending on which part

of the business you are in) that open each meeting.

Thursday 10th February 2011, the message is;

Why are the safest organisations generally the most productive?

Safety performance is the result of excellent preplanning, preparation

and quality execution. Resulting in doing things on time, once and

without rework.

‘Can in-house Business Analysts compete with external consultants?’

In the last 5 years EDF Energy has developed an Internal Business Analysts

(BA) competency group that is still growing to support a wide range of mainly IT

Projects and business transformations

The group are part of Corporate shared services

In 2010 the BA Competency Group was renamed ‘Business consultants’ to help

promote their ‘brand’

Business Consultants are managed through a resource pool and allocated to

assignments (usually projects) throughout the business units

Internal Business Consultants account for about 30% of those

analysts/consultants allocated to assignments … the other 70% are externals

The question of can they compete with external consultants is topical as we

consider how best to develop the group in the future…

Can in-house Business Analysts compete with external consultants?’

What advantages can external consultants bring?

Global network of experience – even if they don’t have the knowledge themselves, they can find material, methodology, contacts within their company

Resources – usually quite easy to get large numbers of people – swap people in and out as necessary on projects – wide range of skill sets available

Experience from a wide range of industry – have usually seen similar things done before in other business', can advise on what worked/ didn’t and tailor approaches accordingly

Focus on deliverables –work to tight scope (can also be a major disadvantage)

Flexibility – external consultants (contractors & consultancies) expect to have travel as a major part of their day job – they can be more adaptable and flexible

Opportunity - for staff to keep up-to-date with the latest position & developments. vital that staff are well briefed on the market and their area of expertise.

Objective opinion and insight – not caught up in politics or tied to a way of doing things


What advantages do internal Business Analysts/Consultants have?

Actual company knowledge ;– so much time of an external consultants life is getting to grips with the ‘new business’. Internal BAs often know how things run, who to speak to and how to ‘make things work for them’.

Leverage existing company relationships

Knowledge of stakeholders

Company business process expertise ; Often the consultants on projects end up knowing more about how an area of a business runs than those who are in it.

Knowledge stays within the business – internal consultants actually see what happens to their work once it is operational. Lessons learnt from the implementation and the success of its subsequent operation.

Understanding of legacy issues - previous issues and how they were resolved

Not mercenary - do not concentrate on their “margin” for services rendered.

Trust – business’ can distrust externals (the opposite can also be true)


Does the business need External consultants?

Yes!

Need to differentiate between Independent consultants and Premier Partners

Need the right mix

For specific issues that require Subject Matter Expertise knowledge/input

To aid with internal capability building.

To keep the business at the forefront of the industry – need to be constantly

reminded of industry best practice

Helps to beat our competitors


What factors drive a 'good' balance between internal and external

business analysts/consultants?

Internal consultants should look to focus on sustainability and continuity of our

business

Should build internal capabilities to keep us operating efficiently and effectively at

the same steady state.

External consultants are required when we want to push the performance of our

business to that next level, keeping us in the upper quartile of the industry league

tables.


What problems arise if we have the wrong balance between internal

and external business analysts/consultants?

If not enough internal resource there is no capacity to absorb knowledge from

outside the business

External consultants can exploit this and make us dependent upon them for skills

and experience which we will constantly rely upon.

There is a continual risk of knowledge disappearing out the door if we rely too

heavily on external consultants

If the balance is in the other direction, there will be a stagnant pool of internal

resources that will find it difficult to rise to larger challenges of the business.


Where can internal Business Analysts/Consultants best be used?

For improvement projects requiring lots of domain knowledge

Where cultural change needs to be effected and benefits are to be realised over a

longer period.

Should not (usually) be used for specialist (e.g. IT related projects) where the

benefits are more ”one-off” in nature. External consultants are (usually) better in

this instance.


What Gaps do internal Business Analysts/Consultants have?

Skills

Stakeholder Management

Consulting skills (usually the softer skills)

Structured approach to problem solving

Experience

Work in other industries/with other competitors

Industry knowledge

Experience of working in challenging/hostile environments

Capability

Less able to address steeper challenges and stretched targets

May find it difficult to deliver difficult messages such as headcount reduction


How can these gaps be addressed and over what timescale?

Gaps can be addressed by consistent, focused capability building – this

is underway as part of the Competency Group Development activity

Keep boosting internal knowledge with staff drawn from other industries

/ consultancies

A natural flux of staff is healthy and allows new ideas to be brought into

the group

The most experienced Analysts/consultants need to be involved in

external events to ensure they understand best practice approaches

Encouraging internal business units to consider the use of internal

business consultants in areas previously reserved for externals is a

cultural change and will take time to achieve


What priority issues that should we address?

Stakeholder management, quality and timeliness of deliverables

Need to get better at placing our internals on projects, developing their

careers and generally getting the best out of the resources that we do

have

Need to define and be very clear about the service we offer to our

business partners and the value it brings

Ensure we engage with our partners to understand their changing needs

and adjust our plans accordingly