Outsourcing optimize

Internal consulting departments can provide nimble solutions and help retain clients

When a business asked a talented programmer to help establish an internal consulting department, he jumped at the chance. The biggest challenges proved to be more political than technological.
 Editor's note: This article was originally published July 17, 2003.

It seemed like the very definition of a hard sell. When a manufacturing client asked a mobile computing solutions company if it could move an older, text-based DOS handheld application to one designed for the Pocket PC, the company told the client that it would take more than six months and more than $200,000 to do the work.

Such a pitch was bad for both parties. For the client, it meant waiting months until a new solution was available. For the vendor, such an expensive fix could drive the client into the arms of a competitor.

That's when a TechRepublic member, we'll call him Guru Guy, stepped in. As the only person in a one-man internal consulting department for the vendor, his charge was to explore new sources of revenue and find ways of keeping existing customers happy.

After taking a look at the application, he found a workaround that took just two weeks. "I wrote a shell around the DOS program and simulated the environment," he said. "We just didn't have a solution."

Actually, Guru Guy's fix is meant to be temporary. It turned out that the client will need a completely new GUI application, but putting one together will take more than a year. In the meantime, Guru Guy's work helped the company keep the client.

"This is a way to let them buy new units and still run the existing software," he said. "This is a bridge. We could have lost the customer because we didn't have an upgrade path."

For companies that need solutions that fall somewhere between the domain of a third-party consulting firm and an engineering staff, an internal consulting department could be a worthwhile investment. Guru Guy discussed his experience with the initiative so far and explained what he thinks is necessary for such an effort to work.

When engineering can't help

As is the case with many vendors, the salespeople at Guru Guy's company work in tandem with engineering to provide solutions to customers. Guru Guy has been a programmer with the company for nearly two decades and has spent almost half that time as a systems engineer for the sales department, so he has a good feel for where the company is in danger of losing customers. He and his boss decided that an internal consulting department was a chance to offer an alternative when a corporate solution wouldn't do.

His company needs help when it has to integrate its systems with the customers' or create simpler applications that are not profitable enough for engineering to take on, Guru Guy said. There are also opportunities to port applications from competing units to his company's applications. Because the company's sales force has high quotas, engineering is often booked with multiple projects that prohibit it from taking on smaller jobs. His department can do such work for clients more quickly than if the projects are placed on engineering's waiting list. Acting as an internal consultant also gives Guru Guy a chance to act as a liaison between the customer and engineering, which doesn't deal directly with customers.

The launch

With ample support from a vice president, Guru Guy kicked off the internal consulting department six months ago with the manufacturing client that needed its handheld solution upgraded. But like many new initiatives, political uncertainty followed. One of the first issues he encountered was a conflict between sales and engineering over his services.

"The sales guys are sometimes afraid to come to me because they feel like they're bypassing engineering," he said.

There have also been occasions when engineering sees him as competing against, not complementing, the company's offerings. In the case of the manufacturing client, he was denied source code for several months before he was given the go-ahead to build his own solution.

One way to solve such conflicts would be to establish clear-cut rules of engagement between sales, engineering, and internal consulting. But so far, no such guidelines have been put together.

Making it work

Given the initial difficulties, what does Guru Guy think needs to happen to make his internal consulting department work?

Internal advertising Besides resolving the rules of engagement between sales, engineering, and internal consulting, Guru Guy said that having more internal advertising would help boost -- or establish -- his department's profile. "A lot of people don't know that the internal consulting department exists yet," he said. Field consulting

The more one-on-one contact you can get with a client or a potential customer, the better. Guru Guy anticipates traveling to client sites to assess programming services and opportunities for customization.

Management buy-in

Guru Guy already has support from a vice president. "[He] is determined to make this work. I think this was given a lot of lip service before. Everyone, including him, is looking for new sources of revenue."

Risk taking

Because the solutions that the internal consulting department is offering vary from the standard applications the company produces, it can be difficult to estimate the amount of time a custom project will take. Convincing management and the client that you can come up with a viable solution in an acceptable timeframe may take some flexibility on everyone's part.

Administrative issues Besides establishing engagement policies, it's necessary to determine the kinds of contracts, warranties, and pricing structures to use. The level of support an internal consulting department will provide is also an issue. For example, for an upcoming project, Guru Guy anticipates selling the source code to a client and having the client support the solution or pay to support it through another consulting firm. If the company wants an upgrade or major changes to the application, it will come back to Guru Guy's company.

Career challenges

Guru Guy says his new role as internal consultant has given him variety and autonomy. "I make my own deals. I write my own agreements, and I have a lot of freedom," he said. "I also get compensated on sales."

Word is slowly reaching his company's clients that an internal consulting department is available. (With the lack of advertising, most of his work comes from word of mouth.) As his business picks up, he anticipates growing his department and reducing his reliance on the engineering department. Within the next couple of years, he hopes to have one or two additional people on the internal consulting staff.

"We have only been doing this for six months, and thus far it has been more successful than any previous attempt," he said. "From my perspective, it is a great job, always varied and interesting with experience in many different areas."


No reference to the Babel fish? For shame!

Sterling chip Camden
Sterling chip Camden

IMHO, it ends up being a name that frees someone to think more creatively about solving customer problems. It creates an agent who isn't boxed in. What do you think?


Real consulting - that's how new customers were gotten and how old customers were kept happy a long time ago. Then came the whole hierarchy and, as the old story says, the person between, the liaison, the agent and the person who tries find solutions by consulting all sides, marketing and engineering as well as looking the vendor benefits and customer benefits, is seen an enemy inside own company marketing and engineering? Customers and own management are usually very happy to have someone there to find solutions, to solve the problems, to create sales, to buy a dinner, etc. Now - I'm not sure if I would like to do it anymore - maybe, it is interesting after all! But it also is a true 24x7 job, walking on a tightrope, trying to keep all the parties together, trying to keep up both with business and technology at the same time - and not just in own company but with customers also. And try to stay awake! Once my customer count did grow over 20 (big customers, not all always friendly), my car had a phone and spare cloths for all situations, latest manuals, copies of contracts, empty contract papers and even a datascope. I had open credit card for flights, hotels, customer lunches, dinners, even a Scotch time to time for a good customer, etc and two(!) pagers.. Four successful years but then I took another available job - not bad and not as exciting but much more suitable for a family man, almost 8x5 as much as those exist in IT - turned after two years to almost same - heh!