Highly Specialized Domain Offerings
Outsourcing is a complex phenomenon with many aspects, each a potential pitfall for the outsourcer. Each stage has to be carefully navigated to avoid those pitfalls. Indeed when embarking on an outsourcing program, managers soon realize that the devil actually lies in the detail. So complex are the processes that even boutique advisory firms have specialized in particular aspects of outsourcing.
Clients' demands have therefore changed from seeking general information about outsourcing or offshoring to addressing specific needs. “Clients look for specific advise,” says Udhas. “They want solutions to their particular problems. When you give specific advise, you need to have people who understand the industry in depth.”
For instance, Tholons contributes to the transformation of the company through leveraging equity participation. Similarly, Pace Harmon provides services such as outsourcing advisory, strategic sourcing, IT strategy and governance and supply chain optimization. Firms like PA Consulting provide advisory services across the entire sourcing lifecycle from concept through transition and into ongoing management.
Deal structuring is another area that requires specialized skills sets. There are lot of nuances that need to be structured to avoid confrontation at a later point. Pricing has also become extremely complicated with the FTE-based model no longer being effective in all circumstances. There is an increasing realization that innovation in deal structuring, including making provisions for fiscal incentives and recognition for individuals can dramatically impact service delivery. Being a highly specialized area there are few firms — with TPI being a leader — that play in that space.
Some firms help customers understand their needs before drawing up their outsourcing strategy. For example, NelsonHall specializes in helping organizations understand their business processes before they undertake request for information or appoint sourcing transaction specialists. It helps clients understand what processes should be outsourced, what benefits can be achieved in each area, what are the risks, what are the critical success factors, and who are the most appropriate vendors.
As the semantics of offshoring expand to include destinations other than India and China , the role of boutique advisory firms becomes important. Certain functions are done more effectively from particular destinations. For instance, India has created its niche as the preferred destination to source IT services just as Philippines is getting recognized as the destination for sourcing voice-based customer care solutions or Central Europe as a destination for sourcing finance and accounting. Some outsourcing advisory firms like neoIT, Tholons and Everest provide location-specific advisory services.
Boutique advisory outsourcing firms are forced to focus on niche competencies because of the competitive landscape. This is especially true for new players trying to make their presence felt. “By treating offshoring as a strategic initiative and offering end-to-end services we advise clients from decision-making to effective project implementation,” Anupam Govil, CEO, Global Equations. The firm is specialized in “developing and maintaining a pool of pre-qualified and preferred vendors across various specialties.”
Ironically as customers get savvier and understand outsourcing issues better, their reliance on boutique advisory outsourcing firms is only going to increase as increased awareness will heighten the paranoia of failure and encourage them to seek help from third parties. Now didn't someone say ignorance is bliss?
