Consulting and Accounting Firms. Consulting firms that traditionally have provided advice on business management and IT strategy issues are increasingly becoming involved in this landscape, with the most prominent advisors being Deloitte, McKinsey, AT Kearney, Bain & Co., Booz Allen Hamilton, Boston Consulting Group and PricewaterhouseCoopers. Many large, global accounting firms whose sole focus is cost control, are providing elements of sourcing advice, as this area offers strong potential for revenue-generation.
Law Firms. In addition to providing legal counsel on outsourcing, law firms are also involved in the business of advising clients on the outsourcing lifecycle. They continue to strengthen their positions in this arena, specifically as related to Finance & Accounting Outsourcing (FAO), due to their expertise in international and regulatory matters and their continued efforts to integrate legal and consulting capabilities. Legal firms with significant sourcing practices include Milbank, Tweed, Hadley & McCloy; Mayer, Brown, Rowe & Maw; Pillsbury Winthrop Shaw Pittman, Brown Raysman; Hunton & Williams; O’Melveney & Myers and Kirkland & Ellis, among others.
Market-research Firms. A few large market-research firms are also known as significant sourcing advisors. The most notable among them is Gartner, which offers these services through its Gartner Consulting business. By virtue of its experience in conducting research for suppliers and buyers of outsourcing services, it has acquired the know-how and expertise to advise clients in this arena.
Integrated Firms. These “hybrid” firms offer a combination of all the competencies elucidated above. We currently see Pillsbury Global Sourcing, a part of the law firm Pillsbury Winthrop Shaw Pittman, providing an integrated approach by blending legal and consulting advice. Another player in this space is niche sourcing advisory firm, Everest Group, which launched a research business last year by name Everest Research Institute.
Other entities offering sourcing- advisory services include independent advisory firms (many of whom have employees who formerly ran outsourcing transactions for major corporations and now share their experiences and offer advice to others such as Think W Group, Avanti Advisory Group and Vales Consulting); outsourcing service providers (who offer consulting, business transformation and other change initiatives in addition to providing the actual outsourced services such as IBM, Accenture and Capgemini); events, workshops, seminars (which often have tracks or sessions on outsourcing specific and industry specific issues); associations, (many of which are outsourcing specific such as the International Association of Outsourcing Professionals (IAOP), The Outsourcing Institute, Shared Services and Business Process Outsourcing Association (SBPOA) and the Sourcing Interests Group (SIG), among others. The biggest competition to all external entities is internal sourcing teams — groups of employees leading internal transformational initiatives, like outsourcing.
The Most Significant Sourcing Advisory Firms
FAO Research recently embarked on a first-of-its-kind research study analyzing sourcing advisory services firms. We determined who is making the most significant impact globally, providing guidance to buyers of sourcing transactions. We then examined how these firms differ and revealed how prospective buyers and outsourcing service providers can work better with them. We estimate that the 15 firms we analyzed represent 80% of the revenue generated in the sourcing advisory services marketplace worldwide.
Participants include all major categories of sourcing advisors.
