This approach creates a group of people with detailed knowledge of their own part of the company. And together they can be more successful than external teams, senior managers were told last week at a seminar on the subject organised by consultancy Partners for Change.
The approach is seen as especially relevant as companies struggle with e-commerce projects, which need to bring together people from IT, marketing, finance and distribution.
"An internal consultancy team can offer a thorough understanding of the business environment and organisational culture and politics, which external consultants may take some time to develop," says Mayuri Vyas, who specialises in this field at Partners for Change.
"They also have long-term loyalty and commitment to the business," she adds.
"Change can be made more quickly, because internal people often have easier access to decision makers and have built up relationships over time. By the same token, knowledge, skills and methods are kept in the business."
A move into an internal consultancy also benefits individual staff, Vyas says.
"Many organisations see their internal consultancy team as a breeding ground for high fliers," she explains. "People who might otherwise leave now get a chance to develop new skills in a broader role.
"Most companies recruit people as specialists, such as in IT or finance, whereas the internal consultancy enables them to develop cross-function ways of working, and project management skills."
Vyas points to "a leading financial services company" that set up a group to define links between end-users and IT. "Since then the group has repositioned itself from an IT team to a true consultancy, undertaking projects covering all aspects of the business," she says.
"The rationale was to reduce dependence on external consultants and to make the most of existing in-depth knowledge of the business. But the set-up also offers exciting career opportunities, helping to retain ambitious people."
Other organisations with internal consultancies include The Royal Bank of Scotland, which has a 70-strong team with skills in IT and change management; NatWest, with more than 100 consultants; and public bodies such as the Metropolitan Police.
Vyas says the approach can cut the need for external consultants - who can still be useful for self-contained projects, or as specialists brought into the internal team, or when politically difficult decisions have to be made.
Vyas warns that not everyone can be assigned to the internal consultancy. "Everyone in the team will need core skills such as change management, project management and interpersonal skills," she says. "Maintaining the right mix of skills - and personalities - in the team is critical to success."