Shuichiro Ogawa
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Notes · updated 2026-10-07

Why Buyers Purchase Consulting and How They Choose: Reasons, Deciding Factors, and the Mechanisms Behind Them (from Industry Sources)

This note examines why buyers purchase consulting, what decides which firm they choose, and why those factors decide, drawing on industry sources: reports by the UK National Audit Office from 2010 and 2025, testimony by buyers at hearings of the Canadian House of Commons and the Auditor General of Canada's audit of con…

Contents (7)
  1. The previous mismatch, seen from the buyer’s side
  2. The reasons for buying fall into four groups
  3. The deciding factors: people, track record, relationships, and ease of engagement
  4. Why these factors decide
  5. What has been shaken since 2024
  6. Where this account does not apply
  7. Footnotes

The previous mismatch, seen from the buyer’s side

This note is about industry practice and follows Consulting Proposals and Competitive Bids: Their Forms, Why Buyers Award and Sellers Win, and What Generative AI Changes (from Industry Sources). The previous note showed that the buyer’s evaluation framework sets what a proposal contains and that this framework scores quality and price. It also found a mismatch: buyers of professional services say they choose on reputation and existing relationships, while losing sellers blame price.

This note examines that mismatch from the buyer’s side. Why do buyers purchase consulting? What decides which firm they choose, and why do those factors decide?

The sources are public-sector records, in which the reasons for buying and for choosing are written down, private buyer surveys, and statements by corporate buyers1. Academic research was used only to support the explanation of the mechanisms, within the scope of what the abstracts state.

The reasons for buying fall into four groups

In its 2010 report, the UK National Audit Office (NAO) divided the reasons why organizations use consultants into three: access to specialist skills (People), knowledge of how to approach a task (Process), and an independent view and new thinking (Perspective) (National Audit Office 2010). The report described the benefit of consultants as access to skills that it is not necessary, sensible, or economic for the organization to build or maintain itself.

Fifteen years later, the 2025 report gives the same set of reasons (National Audit Office 2025). Departments use consultants when they lack specific expertise or have insufficient staff with the necessary skills. Departments told the NAO that pay restrictions and intermittent hiring restrictions make it difficult to recruit and retain skilled staff. In some cases, they need niche skills only occasionally and do not want to retain them on a permanent basis. Stakeholders told the NAO that departments may turn to consultants as a way of filling gaps quickly, viewing consultants as more flexible to hire than other types of staff.

In Canada, contracts with McKinsey became a political issue, and the officials who placed them explained why. At a House of Commons committee in February 2023, the Minister of Public Services and Procurement said that there are times when specific expertise is required (House of Commons of Canada 2023a). The minister also explained that, for a time-limited project, it is not considered reasonable to increase the staff complement, and that a consultant then fits the need. The Minister of Immigration testified that in 2018 the department had determined that it needed specific expertise to review how it serves clients (House of Commons of Canada 2023b). In May 2024, a deputy minister of the procurement department said that benchmarking against global standards with proprietary datasets gives the government a sense of where it stands on its transformation projects (House of Commons of Canada 2024). At the same hearing, the deputy minister added that an independent review function is also a requirement of Treasury Board policies.

Corporate buyers give the same reasons. The CFO of Reed’s, a US beverage company, said that rather than hiring a full-time generalist, the company hires a contractor for a specific area and a specific project, and named the flexibility to start right away as an advantage (Stewart 2019). In Japan, the share of companies saying that they “greatly lack” personnel to drive DX reached 62.1% in FY2023, exceeding half for the first time in IPA’s survey (Kono and Kamiya 2024).

Placed side by side, these reasons fall into four groups.

  • Expertise the organization lacks: knowledge and skills that do not exist inside the organization.
  • A shortage of staff and the need for speed: too few people with the skills, faster than hiring, and easy to release when the work ends.
  • An outside perspective and independent review: views that are hard to raise internally, and third-party review that rules require.
  • Assets no one else has: data, benchmarks, and methods that only one firm holds.

The last group is not in the UK’s three categories; it came forward in the Canadian testimony. The deputy minister attributed the sole-sourcing of the benchmarking contracts to the proprietary models and datasets that the firms own (House of Commons of Canada 2023a).

The deciding factors: people, track record, relationships, and ease of engagement

Knowing why a buyer purchases does not settle which firm it chooses. The Hinge Research Institute, which surveys matched pairs of buyers and sellers of professional services, has run its survey four times since 2013, and the top deciding factor changed from round to round.

In 2013, a good reputation was the top criterion in the initial selection, at 21% (Hinge Research Institute 2013a; 2013b). Reputation remained most important in the final selection, and the report described cost as a minor consideration in the final selection. In the 2018 survey (1,475 buyers and 3,005 sellers), relevant experience and expertise became the top evaluation criteria (Hinge Research Institute 2018). In the 2020 survey of 362 buyers of consulting, talented staff and team skills were the top deciding factor for almost half of buyers (Hinge Research Institute 2020). In the 2022 survey (more than 300 buyers and 300 sellers), an existing relationship rose to the top of the final deciding factors, switching places with staff and team skills (Hinge Research Institute 2022). The report for that round states that buyers of consulting services are tightening their wallets and expect more for the money they spend.

In none of the four rounds was price the top deciding factor. However, the buyers in this survey are clients of the matched sellers, which makes the results lean toward existing business. Hinge also uses the results to market its services to professional services firms.

Public-sector records also show the deciding factors from the side of procedure. UK departments procure most consultancy through pre-qualified frameworks (National Audit Office 2025). The NAO notes that departmental frameworks give teams access to technical advice faster than an open competition and at better value than a direct award. Consultants, on the other hand, told the NAO that departments sometimes rush engagements, which leads firms to assume that there is a preferred vendor and discourages bidding. Departments agreed that this can happen and said that they are often under pressure to act quickly and cannot dedicate more time to preparation.

The Auditor General of Canada audited 97 contracts that 20 federal organizations awarded to McKinsey between 2011 and 2023 (Office of the Auditor General of Canada 2024a). About 70% of the 97 contracts were non-competitive, worth about $118 million (Office of the Auditor General of Canada 2025). In 18 of the 19 contracts issued under the national master standing offer (an arrangement that pre-qualifies suppliers), organizations did not provide the required justification for using a non-competitive process (Office of the Auditor General of Canada 2024b). In 10 of the 28 competitive contracts, the bid evaluations did not include enough information to support the selection of McKinsey. About half of the 33 contracts sampled for value for money lacked an explanation of what need or gap the contract was intended to address (Office of the Auditor General of Canada 2025). A deputy minister of the procurement department explained that standing offers allow supplier pre-qualification to be done ahead of time so that fewer steps are needed to complete a contract (House of Commons of Canada 2023a).

Why these factors decide

The sources above support four hypotheses about how the deciding factors work. None of them has been measured directly; at this stage, several sources point in the same direction.

First, because quality cannot be verified before purchase, buyers choose by using people, track record, and relationships as proxies. The deliverables of a consulting engagement do not exist when the contract is signed. UK departments do not know what skills exist in their own organizations or which skill gaps they repeatedly fill with consultants (National Audit Office 2025). As early as 2010, the NAO stated that departments are not smart customers (National Audit Office 2010). In Canada, many contracts recorded neither the grounds for the selection nor the need the purchase was to address. When there is no measure of quality, the cues available to the buyer are reputation, experience with similar work, the people assigned, and a supplier the buyer has already used. The movement of Hinge’s top factor from reputation to experience, people, and relationships can be read as a shift among such proxies for quality.

On the academic side, the abstract of Glückler and Armbrüster states that the main drivers of competitiveness in the consulting market are neither price nor measurable quality, but experience-based trust and networked reputation (Glückler and Armbrüster 2003). An existing relationship rose to the top in 2022, the year buyers tightened spending, which is consistent with the view that buyers return to suppliers they know when the room for failure is small. This hypothesis would be wrong if selection continued to lean on people and relationships even in engagements where quality can be measured before the contract (through trials, outcome guarantees, or comparable indicators).

Second, time pressure and the weight of procedures make pre-qualified and incumbent suppliers the default choice. Finding and comparing new suppliers takes time and effort. Under pressure to act quickly, UK departments cut preparation, and suppliers came to see a preferred vendor (National Audit Office 2025). Both the UK frameworks and the Canadian standing offers exist to complete pre-qualification ahead of time and reduce the steps to a contract (House of Commons of Canada 2023a). In Canada, there were 4 series in which an initial non-competitive contract was followed by further non-competitive contracts for related work (Office of the Auditor General of Canada 2024a), which shows that a supplier once engaged is likely to be chosen again. Here, the deciding factor is less the supplier’s quality than the avoidance of procedural cost.

Third, some reasons for buying serve to justify decisions inside the organization, and outside independent review and unique data are chosen for that purpose. The Canadian deputy minister described independent review as a requirement of Treasury Board policy, and the minister said that benchmarking is very useful for knowing how the government is doing compared with others (House of Commons of Canada 2023a; 2024). If only one firm holds the data that serve as the benchmark, that firm is chosen and competition is unlikely. A procurement official also said that the work in question involved data that was only available through McKinsey (House of Commons of Canada 2024). On the academic side, the abstract of Pemer and Werr states that consultants are said to reduce managers’ anxiety and uncertainty, while the use of consultants itself creates new uncertainties for the client (Pemer and Werr 2013). However, the sources collected here do not show a motive of buying to shift blame outward.

Fourth, because the internal capability gap is structural, buyers keep buying for the same reasons. In 2010, the NAO reported that departments described the inability to identify suitable internal staff as a key driver of their use of consultants (National Audit Office 2010). The same report stated that relying on consultants for basic skills is expensive and that repeated use suggests poor value for money. In 2025, restrictions on hiring and pay, and departments’ lack of knowledge of their own skills, appear in the same form (National Audit Office 2025). The UK government closed its in-house consultancy service in 2023. In the same year, Australia released a framework to wind back excessive outsourcing and its impacts on public service skills, and in 2024 its public service had 18,747 more permanent civil servants than the year before (National Audit Office 2025). Unless internal capability is rebuilt, the first three mechanisms keep directing orders to the same suppliers.

What has been shaken since 2024

Among corporate buyers, the staffing reason has been the first of the four to weaken. The executive leading an SAP overhaul at Bayer said that 30 AI agents support coding and testing, with the goal of significantly fewer consultants in the deployment (Financial Times 2026). The same executive also said that consulting resources will be needed in very different numbers and with different skills, and that fewer and fewer traditional consultants will be needed. The digital chief of Bristol Myers Squibb said that consulting firms expanding their margins was acceptable as long as the company gets to participate in the downside, and that it has never been easier to take the work in-house. The CEO of SharkNinja said that working with technology partners and the business leaders running the departments had been much more effective than bringing in a third-party consultant who does not necessarily know the business. The CEO of Illumina said that AI lets the company attempt more projects before it needs the big implementers, and that the future of consultancy has to be more about advising leaders.

There is also movement in the other direction. British American Tobacco said that external consultants have become more important during its three-year, AI-focused cost-saving program (Financial Times 2026). The same report states that Volkswagen turned to BCG and McKinsey as it weighed plans to cut up to 100,000 jobs. In work such as large reductions and restructurings, which requires an outside perspective and a justification for decisions, reliance on outside firms continues.

Changes in the public sector come from controls more than from AI. In 2024, the UK stopped non-essential spending on consultancy, set a target of halving spending in 2025-26, and required departments to set up approval controls according to value and duration (National Audit Office 2025). Canada let its non-competitive standing offers for benchmarking services expire in June 2024 and decided not to renew them (Public Services and Procurement Canada 2024). A procurement official said that the government wants to move from task-based to solutions-based procurement and to have suppliers take on more risk (House of Commons of Canada 2024).

This suggests one more hypothesis for the period since 2024. When AI makes insourcing a real option, the buyer’s bargaining power rises, and the deciding factor moves from whether a firm can supply people to whether it takes on risk, can advise leaders, or holds assets no one else has. The shift to fixed prices and outcome-linked fees described in the previous note can be read as the seller’s side of this movement. This hypothesis would be wrong if supplying implementation staff remained the deciding factor even among buyers who can use AI.

Where this account does not apply

The only figures on private-sector deciding factors come from the Hinge surveys, which were conducted by a firm with a commercial interest and which survey buyers matched with that firm’s client sellers. The four rounds differ in sample and in the wording of their questions, so the changes in the top factor cannot be read as a strict time series.

Public-sector records say a great deal because the reasons for buying and choosing are written down, but the motives may differ from those of private buyers. The Canadian audit covers contracts with only one firm (McKinsey). The executives’ statements come from large companies selected by Financial Times reporters and do not include the voices of small and medium-sized firms.

For Japan, the only source is the IPA survey showing a shortage of DX personnel, and no source directly showing what decides how Japanese buyers choose consultants could be obtained. The full texts of the four academic articles could not be obtained, and they were used only within the scope of their abstracts.

Unverified items

No unverified statement remains in the main claims. Sources that could not be reached (the full text of the Australian Senate inquiry into consulting services, the 2026 report of the UK House of Commons PAC, buyer surveys by Source Global Research and Gartner, the full text of IBM IBV’s 2024 buyer survey, and the original release of Gartner Japan’s 2026 survey) are recorded in the ledger with the routes attempted.

References

Footnotes

  1. The sources are sorted into three tiers: documents of public bodies, audit offices, and legislatures (T1), the factual parts of surveys by research firms (T2), and statements by the people who placed the orders (T3). The Hinge Research Institute sells marketing support to professional services firms, so only its figures and the facts of its surveys were used. The executives’ statements come from a Financial Times report (republished by The Irish Times), and only the parts quoted as their own words were used. The full texts of the four academic articles could not be obtained, so they are cited with attribution within the scope of their abstracts. The ledger is at source/review/consulting-buyer-motives/industry.md. ↩

Author: Shuichiro Ogawa (Design Researcher / Consultant) About me →