Cooling Down the Prices
Customers should find out when and why are the consulting engagements hurting their pockets. That means, customer should find out whether the advisory firm’s methodology is creating all cost-related problems, or is it the approach that the customer had followed before signing the advisory firm that created all the problems. Mostly, the answers of all these questions reside within. So they can also be expensive in cases when the customers themselves cannot really see, control or take responsibility of the process. So customers need to take an active role, sense the ownership and maintain responsibility. In fact, some of these advisory firms become rigid in their approach, methodologies, processes, etc. And, they can also be rigid while customizing their advisory services, according to the customers’ needs.
Sourcing professionals should not overlook the focused attention and expense required for healthy sourcing deal implementation and governance. They should plan for expense and time constraints associated with the processing of an advisor-led contract. In fact, vendor-management and sourcing professionals should evaluate the challenges and the opportunities associated with hiring advisory firms.
Not all outsourcing deals require advisory assistance from a third party, but for the long-run deals that are also complex in nature, it is must to hire someone who is well aware of the industry and related issues, and knows the solutions to mitigate the problems.
| Outsourcing Advisory Firms |
- Alsbridge
- AT Kearney*
- Backes Crocker
- Bain & Company*
- BearingPoint*
- Booz Allen Hamilton*
- Boston Consulting Group*
- Deloitte*
- EquaTerra
- Everest
- Global Equations
- KPMG
- McKinsey
- NelsonHall
- neoIT
- PA Consulting
- Pace Harmon
- Pillsbury Winthrop Shaw Pittman
- Pricewaterhouse Coopers*
- RampRate
- Stradling Sourcing
- Tholons
- The Hackett Group
- TPI
|
Source: Global Services
*Firms were initially involved in only IT and business management, and now also active in outsourcing advisory. |
However, many advisors feel that even the small deals need to be executed with proper guidance. “I think all transactions need to be executed under the advisory firms’ guidance. Not all companies have an ability to handle outsourcing transactions internally. They don’t have as much of the market expertise as advisory firms have. They help the customers at various stages — pre-contracts, during the contract, and post-contract,” adds David.
Also, before contracting with a consulting firm, customers should have the understanding of their own domain. They should refer to research reports to get market insights and should meet as many advisors as they can before finalizing one. Most importantly, customers must also confirm the source of income of their consulting partner, and should avoid the ones who have relationships with services providers. Then, go for an advisory firm that brings solution not a formula. All the firms can provide meaningful approach but make sure that the companies bring defined solution. Also, look for their team rather than going by their brand name. Customers should not go for advisors who charge on the basis of the deal’s size without analyzing the cost, time and material involved in it. But not all firms calculate their fees on these dimensions. There are some who have different fee structures — hourly basis, milestone basis, fixed price, governance model, etc. — for different customers. Outsourcing deals are typically high-value, mission-critical transactions. So customers should make sure that they get it all right.
The cost of advisors is actually nominal in front of the actual worth and complexity of big IT outsourcing deals that needs to be executed under proper guidance. So hiring an advisor for such million dollars deals is a good bet because customers end up saving more than their spend on advisors. At the same time, there are many small inexpensive firms, which can be hired for small transactions after a
thorough research.
In all, sourcing advisors are the true power brokers and generally advise to bring value to the table and stand responsible for the long-term success of the deals, if customers follow smart steps before and after signing them.
