In-house strategy and consulting groups are growing in popularity, supplementing and increasingly winning business from traditional consulting firms such as McKinsey & Company, Boston Consulting Group and Bain & Company. Today, many high-profile companies—Cisco, Google, IBM, Samsung, Siemens, Disney, Volkswagen and Deutsche Bank, to name a few—contain such roving consulting groups to help solve the most critical strategy and operations problems throughout the business. Internal consulting groups have a number of advantages over external firms, including a company-wide perspective, continuity into implementation, attraction of top talent to the company, higher levels of confidentiality, and greater cost-effectiveness. But building an internal consulting group is an unprecedented endeavor for many companies, and because best practices have yet to spread widely, internal consulting groups vary greatly in how they operate and the business impacts they are able to achieve.

Over the past six years, we have put in place a 30-person consulting team at EMC Information Infrastructure (EMC II) using a model we have found to be successful, winning projects away from external management consulting firms at a fraction of the cost, and with great “client” (that is to say, EMC) satisfaction. Here’s what we’ve learned about how to establish a successful internal consulting group.

Set objectives and size. Having clear objectives helps prioritize the group’s efforts and also measure success. The primary objectives in creating our team were to rein in spending on external strategy firms and to attract, train, and retain top talent in the company. Typically for an internal consulting group, we had to grow gradually as we demonstrated the quality of our work. But the key was knowing when to stop growing. We decided to cap the group’s size at 30 consultants. For a company our size, with reported revenue of $24.4 billion in 2014 and approximately 70,000 employees worldwide, this number allows us to deliver six to eight projects per quarter. Though the demand for projects often exceeds this capacity, we prefer to be able to prioritize the engagements with the highest business impact.

Win on merit. Every business leader should be able to hire the external or internal consultants of their choice. Our group welcomes the competition. Like any firm in need of business development, we build relationships with executives across the company, and pitch proposals. We call everybody within the company a “client.” We do not execute a central mandate (e.g., the CEO’s or CFO’s), but rather serve the needs of our internal project sponsors (usually at the CXO, EVP, and SVP level). This also forces us to deliver great quality on every project.

Self-fund. Numerous funding models exist for internal consulting. We encourage groups to charge their full cost back to their “clients.” Prior to starting any engagement, clients should approve a statement of work and commit to paying the “fees” for the internal consulting team out of their budgets. Therefore, the group is self-funded and neutral to the parent company from an expense perspective. This charge-back mechanism also forces our clients to prioritize their requests for support. On a typical project, the cost of engaging our internal group is four to six times lower than the fees of a big-three firm (i.e., McKinsey, Bain, or Boston Consulting Group).

Work on discrete projects. We recommend scoping, staffing, and delivering projects with set start and completion dates, and clear deliverables. Sticking to this principle is harder than it sounds. We receive numerous requests to engage outside the remit of a defined project, for instance staffing one of our consultants to augment an executive’s team, or overseeing large implementations over long periods of time. If we accepted all such requests, we would end up with 30 “chiefs of staff” or “operations leads.” That would neither be in line with our primary objectives, nor fit our consultants’ career expectations.

Exceed client expectations. To succeed long term, winning on price alone is not sufficient. Consistently convincing internal clients that the advice provided is on par with, or exceeds, what they can get externally requires a culture of over-achievement. We foster this culture by defining explicit values, encouraging team members to always speak their mind and challenge each other, investing in a full training curriculum, seeking out client feedback, and of course celebrating success. We also try to maintain a true meritocracy with competitive pay and a specific career path that defines clear expectations at every level (our titles replicated the ones external firms use: analyst, consultant, project manager, practice lead, and so on).

Attract top talent. What does it take to compete for the best? A strong value proposition and a first-class recruiting engine. In our case, the value proposition is unparalleled top-management exposure, real impact on strategy, a focus on professional development, the opportunity to transition into a management role in the technology industry after a minimum of two years with the group, and a fun team. We purposefully staff consultants on projects across business areas to make for a richer experience. We also proactively share job openings from other organizations. Team members spend 5-15% of their time either interviewing candidates, or running our recruiting campaigns for college graduates, summer interns, MBA-graduates, and experienced hires.

Be scrappy. As part of a larger corporation, internal consulting groups don’t have the luxury of hiring the extensive support staff external firms enjoy; typically 30-40% of employees at traditional consulting firms are non-consultants who provide research, presentation production, recruiting, training, and so on. At EMC, we make up for the staffing shortfall by assigning all our consultants to an “office development” team, such as recruiting, training and onboarding, knowledge management, or social committee. Though these require time commitment beyond project-work, they offer team members the opportunity to shape the group’s operations and culture, instilling an entrepreneurial mindset among our consultants.

Measure success. We use the following scorecard:

Business impact. Are we working on the projects with the highest business impact for the company?

Customer satisfaction. How satisfied are our clients with the value we provide, and the way we work?

Utilization. Does our utilization reflect strong demand and high productivity (we set our target at 75%-80%)?

Spending on external firms. Are we succeeding at reducing the company’s spending on outside consultants?

Acknowledge what you can’t do. There are three circumstances where a company should always turn to external firms: when there is a sudden need for a large number of consultants (e.g., crisis management), when deep expertise in a specific functional area is required (e.g., indirect procurement), or when findings are intended to be quoted publicly.

In a seminal 2013 HBR article, “Consulting on the Cusp of Disruption,” Clayton M. Christensen, Dina Wang, and Derek van Bever predicted the disruption of elite consulting firms. We believe the rise of high-impact, in-house consulting firms will play a role in this disruption. Our advice is to operate as a professional services firm within the company, to define a business model, and be unrelenting in its execution.