Sourcing advisers are a unique breed — some sort of a hybrid between operations and strategy consultants, with an added eye for research. As all good things, they were born out of a necessity. Organizations looking to outsource and offshore pieces of technology work did not have the requisite understanding of the dynamics of outsourcing to a third party or of setting up offshore captives. Sourcing advisories came in to facilitate the process and ended up playing variegated roles of being a preceptor, an adviser, a coach and a dealmaker. In the past decade, they have grown to become entities with formidable influence and impact on the global services industry.

This study is an attempt to understand what sourcing advisories do and what do customers of services and service providers expect from them.

What’s on Offer
The breadth of services that sourcing advisory companies offer are a reflection of two clear trends in the practice of global sourcing of services — increased complexity and growing maturity. Much of global sourcing continues to be an area that requires specialized knowledge and expertise where the scope for black box solutions is less. No wonder then that more than half, up to nearly a third of advisers, are frequently engaged in pre-transaction services like business-case development, RFP formulation and provider selection. The other clear finding is that with sourcing contracts getting more complex, which in itself in an index of growing maturity, the need for governance-related services are on the rise compared to what it was two years ago. More than 50 percent of the advisers reported the increased need for governance services.

Survey Methodology and Respondents' Details

The Definitive Survey of Sourcing Advisers was conducted jointly by Global Services and AMR Research. The online survey was done during the month of July 2008 with participation from respondents all over the world. In addition, the sourcing advisory companies were asked to submit detailed information about their firms.

Key Findings of the Survey

Most demand is for pre-RFP services, but the need for governance work is much greater than what it was two years ago Half the advisers frequently won their business via  provider relationships — does this encourage bias? Demand for rapid-transactions in under six-month timeframes Traditional “big 3” — EquaTerra, Everest Group and TPI — perform most consistently across all categories. Booz & Company, Deloitte, PWC and the Hackett Group perform well in some areas, but average in others Many of the small boutiques performed strongly, example Alsbridge and the W Group, whose performance is clearly centered on consultant experience Providers want more communication in the process and advisers with genuine outsourcing implementation experience (not simply strategy) Some customers want a tighter methodology to shorten the advisory cycle and advisers with more domain expertise.