In the software industry I think this is a mixed-bag driven by the executive's understanding, or lack thereof, of this discipline. Outside of that world, there are large industry sectors that went through a lot of "right sizing" efforts through the '90s. Right sizing involved paring out anything that was not considered to be a "core competency". For example, very few utility companies mail and process their own customer bills any more. Many companies contracted out all IT functions.

Today, it is not uncommon for a company to have an internal IT department with a single employee-manager who oversees a sizeable group of near-permanent contractors, all of whom are hoping for a permanent position doing something not IT-related with "the business". This has been the hallmark for the return of the employee business analyst, who was broomed out with the rest of IT in the '90s, generally to the peril of said business.

Best-of-breed software with zero customization was the rallying cry of that era. The reality turned out to be an integration nightmare, glued together with e-mail and spreadsheets. So the pendulum is swinging to integrated enterprise systems. These systems typically have a robust skeleton and muscles and a wart-laden skin that provides a truly horrifying user experience. The only way to get things done is to create a document of screen captures of the 64 steps it takes to do just about anything.

Information architecture, interaction design and well-written online technical documentation are the solution. But these disciplines are foreign to the IT manager who is more concerned with capacity, bandwidth, reliability and operating cost. There's no room for "artistes" in a department concerned with keeping 2000 servers running, each at the appropriate number of nines to achieve reliability goals (and paycheck bonuses).

So, for now, the fate of these disciplines rests in the hands of the project manager who must be charismatic enough to convince an overly pragmatic steering committee of their importance. The good news is that there is many a project manager who succeeds. The bad news is that success is measured one project at a time. So it looks like the roles of information architect, interaction designer and technical writer will be filled by project-based consultants for a while yet.

So, being responsible for the fact that our company decided to train their in-house people instead of using contract designers, I'll give you my perspective.

In-house design is great for being quick to respond to needs, easy to redirect as projects come and go, and able to carry a 'house style' between projects.

Where it falls down though is that eventually the 'house style' can get stale and the staff get run ragged trying to get all the projects completed on time and never get down-time to contemplate alternatives or investigate what others are doing. They also end up getting the same input all the time.

So I think where the external house comes in is by getting much wider exposure, being able to offer options that can cross market spaces or even mediums, and of course have the joy of designing for different challenges all the time so they become more flexible and adaptable.

So Alan, what you need to keep reminding us is that what you can bring to the table is that fresh, and dare I say innovative, approach!

As an in-house designer, currently managing a vendor to support a large scale project, I see value in both in-house and consultants. Consultants bring new perspective and resources and in-house teams bring domain knowledge and proven capabilities (no guessing about how good or bad the team is).

In my experience, there is a cycle. Design consultants are used until someone says, "why are we paying these guys so much?" In-house teams are used until someone says, "why aren't these guys producing great design?"

How do you keep good designers in-house? How do you continue to show your value to a company as leaders and fortunes come and go? If I had the answers to these questions would I start my own design agency or build an in-house team? I have no idea. :-)

One big area that I see consultants as valuable are situations that require a design effort that is limited in time and considerably exceeds the capacities of the in-house design team. Conception / design of new products and establishing design in an organization are probably two big ones.

I see the advantage of being an in-house designer in the ability to collaborate with business owners, developers, and marketing very effectively. I find frequent informal communication (in addition to formal documentation / communication) during the design process very important to create a shared understanding between stakeholders; this would not be possible to the same extend as an outside consultancy.

One of the big challenges myself and a lot of other interaction designers are facing today is establishing an organizational structure and processes that enable design to be an integral part of the product and of the organizational culture. I think consultants can play an important part in that aspect.