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by Vault Consulting Editors | March 10, 2009

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Recognizing a constant need for third-party expertise, some corporations have established internal consulting units. Consultants from these units report to a central consulting division, who then staffs its employees within different business units in the company for assistance on issues such as corporate strategy, business development, and project management. The consultants remain deployed with the client for either a set period of time or throughout the duration of a specific project. Even though everyone technically works for the same company, the consulting arm acts as an outsider, since its consultants don't work for the business units.

Why don't these corporations keep hiring outside consultancies? One reason corporations like having internal consulting groups is cost savings. Internal consulting groups can be an economical way to obtain a large amount of consulting help. The firm doesn't have to pay the exorbitant billing rates; instead, it can receive the outsider opinion for a corporate pay scale. The firm also benefits from having a dedicated team of experts knowledgeable on the company and its industry. In addition, having a dedicated internal consulting unit is a smart way for corporations to market themselves and attract top talent from the outside consulting ranks.

You should think of internal consulting as the same role as if you were in a typical external consulting firm, except on permanent retainer for the same client. You are simply on the client side of the table, and your paycheck comes directly from the client. The main disadvantages to being an internal consultant instead of a "normal" consultant is that you don't get the same variety of industries as you would elsewhere, and you are paid at corporate salaries, which are typically lower than consultant salaries. On the other hand, you will no doubt travel less. And because you are not trying to win repeat work as a consultancy, you will not have the same face time pressures that you might as a typical management consultant.

So, if you are especially concerned about issues like travel and hours, but you are attracted to the types of problems consultants face, you might find an internal consulting arm to be a great fit for you. Note that such departments are not always called "internal consulting" (they are sometimes called "corporate strategy" or "strategic planning"), so you'll have to do some digging.

Examples of internal consulting projects:

  • The internal consulting arm of a large commodity trading business deploys three consultants to help its futures brokerage arm with a marketing strategy.
  • An internal consulting group at a large petrochemicals corporation hires a change management specialist for long-term deployment on a project with the marketing distribution operating unit, to assist in a multi-year implementation of SAP system

Representative internal consulting practices include:

  • American Express Strategic Planning Group
  • Cargill Strategy and Business Development
  • JP Morgan Chase Internal Consulting Services
  • Johnson and Johnson Decision Sciences Group

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Filed Under: Consulting

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