Nineteen percent of business and technology professionals in the public sector are bringing previously outsourced processes or functions back in-house to reduce costs, according to Forrester survey data. Internal consultancies — mission-driven capability centers for innovation, strategy, and execution — are emerging as key vehicles for governments seeking to do more in-house. Some of the most well-established examples are the bipartisan Australian Government Consulting (AGC) unit, the Canadian Digital Service, Singapore’s GovTech agency, and the UK’s Government Digital Service. As many more jurisdictions adopt internal consultancies, we need to ask: Are we building them to last or simply building them fast?

Internal Consultancies Help Governments Adopt Emerging Tech

Public-sector organizations, hindered by legacy tech and complex landscapes, can be slower than their private-sector counterparts to adopt emerging technologies — despite their appetite for it. When formed as multidisciplinary teams, internal consultancies are uniquely positioned to help governments:

  1. Tackle tech debt. Working across organizations, these centers identify areas of legacy technology and implement ways to overcome them. The UK’s Government Digital Service provides a framework for how to track and prevent technical debt.
  2. Capitalize on emerging tech. Strengthened by cross-disciplinary expertise, internal centers have the opportunity to explore use cases and implementation models for new technologies, ensuring that the government is not left behind.
  3. Reinvest in R&D. One of governments’ critical roles is their ability to support scientific breakthroughs, such as Australia’s Commonwealth Scientific and Industrial Research Organization developing Wi-Fi, polymer bank notes, or vaccines. As a center for collaboration, these consultancies can reinvest public-sector capabilities to aid the private-sector application of such knowledge.

Success Factors For In-House Consultancies

Our initial analysis of internal government consultancies revealed the following key success factors:

  1. Clarity of mission. Internal consultancies are not designed to be all things to all agencies — they should be aligned to long-term mission outcomes. The AGC, for example, has absorbed $3.6 million in external consulting spend while uplifting internal delivery capabilities.
  2. Independence, with accountability. These organizations need autonomy, but they can’t execute in a vacuum. New Zealand’s Policy Project thrives because it answers directly to the Department of the Prime Minister and Cabinet, fostering trust and transparency.
  3. Sustained, cross-disciplinary expertise. Comprised of experts from many agencies, these units exist independently of any one department. Singapore’s GovTech agency succeeds due to its ability to merge policy, product, and engineering skill sets across projects and election cycles.
  4. Transparency of value creation. Success must be defined, measured, and outcome-oriented. Whether it’s the Canadian Digital Service’s ability to send millions of multilingual messages via GC Notify or Malta’s Information Technology Agency’s digitization of civil service workflows, articulating value and success to the public is critical.
  5. Avoiding internal replication of “the big con.” As Mariana Mazzucato and Rosie Collington warn in their book of the same title, private-sector consultancies erode public capabilities when left unchecked. If internal consultancies adopt the same behaviors, they risk the same, albeit with a government stamp of approval.

Build Capabilities For A Strong Future

In an age of volatility, the ability of a government to think, act, and deliver on its mission is an imperative in the national interest.

If we are serious about restoring trust in government, reducing wasteful spending and private-sector dependency, and building systems that not only survive but thrive under pressure, then mission-driven internal consultancies must be designed and implemented with rigor, governed with intention, and supported with bipartisan clarity.

I’d love to hear how others — inside and outside of government — are navigating this shift. Schedule a guidance session to discuss how we can shape models fit for a world that won’t wait.

(This blog post was written in collaboration with Chiara Bragato, senior research associate, as part of Forrester’s research and continuous guidance for public-sector and government leaders.)