Outsourcing Leadership Blog

Provider’s Point of View: 12 Reasons to Hire a Sourcing Advisor

Posted by Randy Vetter on Monday, 22 February 2010 16:30

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Categories: Outsourcing

Over the years I’ve worked with dozens of tier one and tier two outsourcing providers. I recently asked some of them to provide their perspective as to “why their clients and potential clients should hire a sourcing advisor.” One would initially think that a provider would be opposed to having a sourcing advisor involved as it might slow down the process and lessen the advantages that a provider could have over the client without the benefit of independent advice. I found quite the contrary.

Listed below are a dozen “uncut” reasons why providers believe clients should hire a sourcing advisor:

A Dozen Good Reasons
1.    Ensures objectivity – brings in impartiality to the provider selection process
2.    Acts as a catalyst – a good sourcing advisor spurs the sourcing discussion within the client environment
3.    Provides a financially sound approach and rigor – develops a sound data-centric business case for sourcing options leveraging a data-driven approach
4.    Saves time as it’s a qualified deal – sourcing advisors are only brought in if there is a real opportunity vs. “kicking tires”
5.    Reduces bias – the advisor provides a level-set playing field
6.    Creates a win-win scenario – advisors help in making it a win-win for the client and the provider
7.    Brings in focused approach – from the client toward all aspects of the deal, e.g., selection, process, pricing, SLAs, governance model, etc.
8.    Enhances client-provider relationships – disciplined approach and methodology from the right sourcing advisor fosters better client-provider relationships very early in the relationship. It would literally take years to get to know all of the key IT executives in a large company. A good sourcing process can cut this down to a few months. Priceless.
9.    Better communications – clear, consistent and frequent communications from an advisor on client RFP requirements and selection criteria helps to ensure no stone is left unturned and providers put their best foot forward.
10.    Faster and informed decision-making – a good advisor can help facilitate faster fact-based decision-making with key senior client executives and provide access to key business and IT stakeholders to resolve issues.
11.    Stay on track – sourcing advisors help facilitate the decision to outsource across the enterprise and help clients “stay the course” from the operational to board level once the decision to outsource has been made.
12.    Leverages significant outsourcing industry best practices – advisors can help negotiate better contract terms for both parties, client and provider. In addition, common ground can usually be reached on any business or legal issue while negotiating a complex contract as the sourcing advisor brings the “market” perspective.

Capability and Capacity
I expect that if I polled more providers I might pick up a few new reasons, but overall I believe these would stand the test of time. For clients and potential clients, you will need to determine whether you have the capability (How experienced is your staff in outsourcing? How many outsourcing transactions have they led and concluded? Are they experts in RFP creation, provider selection, contract negotiations, transition management, change management, retained organization design, communications, vendor management?) and the capacity (Does your team have the long-term bandwidth to take the project from the inception stage through to contract? Do you have enough people to manage all the aspects the sourcing process?) to do an outsourcing project. Good sourcing advisors can do more or less of the work required depending on how equipped you are and the bandwidth your team has available. Asking yourself these questions is critical to the success of your sourcing initiative.

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Comments

#2 Inbound Call Centers 2010-04-22 22:04 An advisor can bring in knowledge, experience, an unbiased view, can be an independent player, can question the assumptions underlying an outsourcing question up to a high(er) organizational level, can help to close the gap between strategy and implementation, can take the place of an internal expert that might be permanently 'burned'. Of course you have to select the right advisor and put him on the right level.

Some examples from my experience - both on the industry side and the consultancy side:
- Make or Buy(incl.outsourcing) decisions require a third internal party to get the balance right.
- Do look at the strategic consequences of outsourcing. Which means that you have to balance both short term gains and long term 'loss'.
- Do not underestimate the costs of outsourcing, both before and especially after the act.
- Do not underestimate the 'personal interest factor'.

Julienne Quote

#1 Robert J Hatfield 2010-03-02 13:06 Overall, these are mature and insightful reasons, which exemplify experienced and confident market players. Perhaps the only one that I - as an outsourcing process advisor - would not support is #8 "..foster(ing) ,,,early relationships…(with)…all the key executives…". A truly "Managed Acquisition Process" channels all provider contacts through the client procurement team during the pre-selection/award phase - thereby precluding the "end around, divide and conquer" ploys that providers are skilled at to obtain unwarranted leverage over competitors. Quote

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