Government agencies and commercial industries rely upon consulting firms to perform a myriad of tasks and projects. It is important for the customer to understand the reasons for hiring a consultant, to effectively communicate those reasons to avoid confusion over roles and responsibilities, and to obtain the right services at the right price.

1. A Need for a Strategic/Trusted Advisor. The strategic advisor provides a unique perspective that is not found within the organization or has sensitivity of issues that cannot be discussed within the organization. Often the strategic advisor is called upon by senior executives to address fundamental issues of the agency dealing with a new or changing strategy, competitive advantage, new products and services, mergers and acquisitions, or human resources and compensation. Strategic advisors usually have a high degree of seniority, are experts in a particular field, are relatively expensive, and generally have limited availability.
2. Unique Event/Non-core Competency. Organizations are often faced with unique events, and it would not make sense to train internal resources to deal with them. A classic example is a major information technology implementation. Enterprise Resource Planning (ERP), Customer Relationship Management (CRM) and Supply Chain Management (SCM) systems require multiple certified consultants to install and integrate. Training internal staff and dealing with the subsequent learning curve associated with these complex systems generally doesn’t yield a positive ROI. Additionally, there are requirements that are outside the core competency of an organization or are so short term in duration that it makes business sense to hire a consultant.
3. Broader Perspective. Many projects require a broader perspective than can be obtained internally. Consultants have usually worked on a variety of different projects for multiple customers and, at the firm level, large consulting companies will have executed thousands of projects. The diverse nature of the consulting business will often result in consultants having better methodologies, tools, and procedures, access to global best practices and industry/government benchmarks, and a network of other consultants who have seen similar problems in the past.
4. Independent View. This is slightly different from a broader perspective because in this instance, an outside view may be required and is certainly preferred. This is typically the case with audits, Independent Verification and Validation (IV&V), requirements analysis, vendor evaluations, and employee or customer surveys. Independent views are important to satisfy legal, contractual, or policy requirements but may often prevent the consultant from performing other work for that organization.
5. Staff Augmentation. Staff augmentation or “Body Shopping” is purchasing hours from a consultant to handle workload beyond the capacity of existing employees. Generally, large amounts of billable hours are purchased for a modest price. Many times consultants are brought in when the organization cannot hire staff because of restrictions or “hiring freezes,” or because the workload will be reduced over time. Staff augmentation is different from the Unique Event outlined above because of skills and price point. Staff augmentation consultants may or may not have unique skills, and their price is generally lower because the skills are not unique or there are many hungry competitors for the work.
6. Outsourcing. Many people have different ideas of what outsourcing really means. In this context, outsourcing refers to entire functions being performed by an outside agency with the management and supervision of activities also performed by that outside agency. Outsourcing is beneficial in that it can represent large cost savings through economies of scale and because organizations do not have to worry about non-core business functions. It is rarely advisable to outsource a core business function or a function that provides tangible competitive advantage.
7. Scapegoat. Although, it is difficult to admit that organizations hire consulting firms to fulfill this function, it happens much too frequently to ignore. When faced with a seemingly impossible task, many organizations turn to consultants to take the blame if the initiative fails but will gladly accept credit upon success. Consultants need to be extremely wary of this scenario as few customers will admit that this is the reason the consultant was hired—and the consultant will pay the price.

There may be other reasons to hire a consultant but usually the rationale fits into one of these broad categories. No matter what, it is imperative that both the customer and the consultant understand why the consultant is there and the permissibility of expanding the scope of the engagement into one of the other roles. Friction can result from consultants trying to sell services that the customer doesn’t want outside of the role they were hired for. Additionally, customers need to understand why they hired the consultant in the first place and not expect to receive additional services in one of the other areas without a renegotiation of scope and price.