"In my experience, for what it’s worth, consultants monitored the progress of former clients about as diligently as they checked up on ex-spouses (of which there were many). "
Former consultant here. That is 100% true - the metric of success is whether clients buy more work, not how successful your recommendations were (and there can be many reasons to buy consulting services beyond they produced successful strategies)
Access to skills, networks or resources you don't have. For any significant decision it can be valuable to get a different perspective. It can also be a way of protecting confidentiality.
Lets say that you are deciding whether to sell a business unit, or to ramp up investment to try and break through.
- Skills benefit: creating the financial models is something many companies don't do all the time. Using an external consultant may also benefit as they may know current industry valuations.
- Network benefit: They might know other people in the segment who would be interested in your business unit. (for product development this is a better benefit). Counter-argument, it's part of managements job to know about the industry so your own network should be enough.
- Resource benefit: The whole team is busy so bringing in external resource to consider the problem lets internal resource keep focusing on existing business. The counter-argument is that if this is the most important thing to do then existing resource should be focusing on it.
- Different perspective: Someone coming from the outside who's not part of your group think. You can sometimes get access to real expects - counter argument is that they're often not real specialists, you have to test.
- Protecting confidentiality: You may not want it known that you're considering selling the unit. Consultants can act as a natural firewall. Tends to be more useful if you're looking at an external purchase - since in my example they'd have to crawl through the numbers of the unit and that makes it obvious.
The benefit no-one talks about:
- CYA: it's a tough decision and may turn out to be wrong. Helps to have "blah blah international consultancy says that X market will do Y and recommended as follows ...". Counter-argument: get some integrity. In fairness it can help to bolster an argument to have external 'calls to authority'.
Don't forget the bypassing of anti-trust laws. Coordinating prices with your competitors directly: illegal. Asking the same consultancy as all your competitors about what prices you should charge: perfectly legal.
Former consultant here. That is 100% true - the metric of success is whether clients buy more work, not how successful your recommendations were (and there can be many reasons to buy consulting services beyond they produced successful strategies)