How Advisors Stay Abreast of Outsourcing Market Activity
In addition to sourcing advisors’ extensive involvement in the outsourcing industry and their engagements and client contacts, they typically stay on top of market activity because of:
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Field experience, through RFPs and engagements
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Follow-up discussions with past clients and one-on-one meetings with vendors and prospects
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Vendor-outreach programs, supplier knowledge/visits and regular briefings by service providers
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Close collaboration with research-analyst firms
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Reports and analysis regarding broader sourcing issues from outside research firms
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Dedicated internal resources/ research teams who continuously track market trends, deal outcomes and opportunities. A dedicated resource collates this information together into weekly reports that are sent out to all professionals
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General business and industry-specific newsletters, subscription services, periodicals and media outlets/publications
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Attendance of analyst and industry events/conferences
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In-house consultants regularly report in on their transactions, experiences in the market and data obtained from networking and conferences
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Site visits to insourced captive and outsourced F&A shared services centers. |
Outsourcers previously had lackluster or nonexistent influencer marketing and communication programs for working with the sourcing advisory community. Today, there is a productive dialogue between suppliers and consultants, which ultimately boosts the providers’ chances at working optimally with consultants and their represented clients. The more consultants know about the suppliers, the better their abilities to educate prospective clients about supplier differentiators and plans during the due diligence and vendor selection phases of the sourcing process.
Choosing an Outsourcer
The most successful outsourcing relationships are based on a solid foundation of mutual trust and understanding of expectations. Thus, sourcing advisors dedicate their business to helping buyers achieve this ultimate end goal. Some of the advice they typically offer their clients is presented below:
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Develop your sourcing strategy first. Approach the market for services only when a full understanding of existing process/ systems capabilities has been ascertained and the need of the business or systems has been identified and baselined
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Deploy a disciplined process to collect objective information about service provider’s capabilities, and collaborate on the solutions they will deliver to you
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Establish a risk-mitigation strategy by addressing organizational resistance, project management, transition and migration, functional technology, production quality, privacy and security and natural disasters
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Assess the “chemistry” between your organization and a potential provider given a 3–10 year timeframe to work together. Cultural fit between the buyer and provider is as important as any other reference point, and a deal will fail due to cultural incompatibility as easily as any other reason. To that end, extensive predeal investigation of service providers and project history is vital, and that remains the responsibility of the buyer
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Agree on a culture and a set of rules developed by those who will live and run the relationship. Ground rules need to be jointly agreed upon, not installed by a service provider or a client. Never use an “off-the-shelf” or “best practice” relationship model — it needs to be customized for the business situation at hand. |
As clichéd as this sounds, sourcing advisors work as “matchmakers” to ensure the best fit between prospective or existing outsourcing buyers and their service providers. They strive to understand buyer needs today, and predict what they might be several years down the road. They understand if external or internal process improvements are needed and the way to facilitate them, apart from tracking supplier activity and observing the evolution of the industry.
