So… are these the world’s best outsourcing advisors?

The IAOP has announced its 2013 “best outsourcing advisors”, and kudos to my former employer, Deloitte, for coming top.  Credit has to go out to Peter Lowes and his Outsourcing Advisory Services group for their achievement.  In addition, KPMG’s Shared Services and Advisory Group, led by Cliff Justice, finished in second place – a strong showing and justification of their 2011 acquisition of EquaTerra.

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The biggest surprises, however, are the absences of ISG (formerly TPI), the largest transaction advisor of outsourcing contracts, and PwC, one of the leading management consulting firms actively operating in the sourcing industry.  I asked both firms how they had managed to miss the “Top 20″ and they simply responded that they had declined to participate.

In addition, I am still trying to figure out how a firm can call itself “Elix-IRR” (and who, exactly, is Elix-IRR?).  Am also curious how Avasant can finish third – they seem like nice guys, but are they really ahead of the likes of Alsbridge and E&Y?

And why does the rest of the list seem to be made up largely of law firms?  Do these guys actually advise on outsourcing, or just do the legal stuff?

Oh questions, questions, questions…

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31 Comments

  1. Posted May 8, 2013 at 7:34 pm | Permalink

    Remember the “book of lists” discussion years ago? Horses for Sources reprised one of my articles which said “Ranked lists are by no means scientific… They are used…to provide seeming accreditation in an industry that has no common, recognized standards of excellence of its own
    at this point in its evolution.” In my opinion, outsourcing industry lists aren’t worth the paper they are written on unless they are ranked based on numbers. Want a list of the “best?” Smart people make up their own–to meet their own criteria. It’s the ONLY list that matters.

  2. John
    Posted May 8, 2013 at 8:25 pm | Permalink

    Phil,

    You’re being too generous here. All you have to do is look at which of these advisors are sponsoring IAOP events to see why some are placing higher than others. Clearly some (as you point out) are refusing to participate as they believe they are at a disadvantage for not spending money with IAOP,

    John

  3. Al
    Posted May 8, 2013 at 9:39 pm | Permalink

    There’s at least one “firm” mentioned which is only one consultant.

  4. Thom Mead
    Posted May 9, 2013 at 8:13 am | Permalink

    The process is self nominating and reflects more the company’s ability to reply with it’s best foot forward than a measure of their true capability. It is by no means a robust assessment of the company’s true capabilities. Some of the requested criteria is questionable and self serving on the part of the IAOP, such as the number of Certified Outsourcing Professionals (COP), in the organization. In what way is that a measure of the firm’s credibility? Many people I know whom have that designation say they were given the designation without doing anything, it just showed up in the mail one day. When they queried IAOP about it, they were told their employer nominated them. It does not carry the mark of professionalism and rigor of the CPA designation and unlike the CPA, has no impact on salary, hiring or carry any legal weight. To my knowledge, at least one of the “Top 20″ listed is a one person company and went out of business due to their inability to get enough customers to sustain their one person operation. Like “The Black Book of Outsourcing” controversy a few years back, it is a less than perfect process. Hopefully companies are not making “buy” decisions on a single data point, but obtaining data from multiple sources, checking unsolicited references on their own and making more fully informed decisions. If one looks at the Top 100 Master list, there are companies listed that do not even show “Outsourcing” as a service they offer on their own company website. So if they don’t actually promote themselves as doing Outsourcing, how is it they are even on the list, much less the Top 20. I will give the IAOP credit for trying…but the execution is flawed and should be revisited and revised.

  5. Posted May 9, 2013 at 8:36 am | Permalink

    The words “declined to participate” say it all. Lists are, by their nature, a bit subjective (even with the best intent, criteria selection can display hidden bias). But they should also follow the adage “No purchase necessary to participate”.

  6. Guarav
    Posted May 9, 2013 at 9:02 am | Permalink

    This is just like that Black Book of Outsourcing!

  7. Posted May 9, 2013 at 9:44 am | Permalink

    And McKinsey, Boston Consulting Group?

  8. Posted May 9, 2013 at 10:43 am | Permalink

    Phil,

    Please write a book on “How to be close to IAOP”. Cheers!

    Ed

  9. Fran
    Posted May 9, 2013 at 10:51 am | Permalink

    I chuckle as the “list haters” can be the squeakiest wheels (for reasons other than altruistic advancement of the industry). I used to be a list hater too. I will share my decade old lesson with “lists” as a career vendor marketing exec. I am sure several of you will relate if this is posted.

    Bottom line first: outsourcing’s old guard consultants lost a ton of $$$ business when the list makers appeared on the scene. The quantity of advisers’ ridiculously priced vendor selection projects nearly dried up after “lists as a resource” caught on and buyers got savvy from their own selection experiences. That got the consultant world up in arms over “lists” as this was a major source of consultant revenue at the time. They will say otherwise why they hate lists, but it was all bottom line to this day.

    Frankly, as a vendor CMO we were paying advisers, researchers, consultants, magazines, editors, conference event coordinators, etc huge bucks in “opportunity” money to be included on their final recommendations “lists” too. Now we add bloggers and e-media to that pay out list.

    Big vendors had a way to separate in their own minds “honest” lists as those they paid big dollars for big leads or huge exposure honors. I’m not sure that’s any different than “participating” but when the lesser exposure “lists” appeared, many mid market vendors that “participated” on lists we received many more RFP opportunities and direct sales requests than we did from researchers and advisers. And it annoyed the giant outsourcing vendors who also joined the consultants in hating the “list” makers.

    Then the business magazines who print “advertorials” with big splashes of vendor ranking lists and page after of page of advertising got hit. More “list haters” joined in as print advertising disappeared. Add in the outsourcing event planners who also got hit because buyers didn’t have to travel to a show site to learn about which vendors were perceived better by other buyers.

    The list makers disrupted the entire industry old guard.

    I can see the usefulness of IAOP building a “Top Advisor List” because buyers STILL need implementation consultants, strategy consultants, legal advice etc. I am sure this IAOP list is a pure advertising opportunity and as such it is driving those firms business and they all appreciate your re-posts!

    Last point, my personal refusal to “participate” in lists and directories cost more than lost exposure and RFP inclusion. We had to add several more regional sales executives to get back on RFPs which still couldn’t make up for the lost traction and lack of explanation to investors for not being on a “list”. Honestly, I lost that career, I believe in large part because I refused to “participate” on behalf of a $600M company whose sales dropped 20% after the lists were noticed and I had no explanation for “refusing to participate” with lists then. I know my company dropped off the radar for buyers not using advisers, researchers and consultants that we weren’t paying. I thought I was above “participating” (aka filling out a form) for anything that wasn’t top shelf or big expenditure. Ivory Tower CMO thinking backfired.

    This isn’t an endorsement, more a history review that gets little light of day. I don’t get all high and mighty over “lists” anymore because its simple perception and opinion surveying. Those who can argue against lists are still stuck in the 2000s. In fact, HfS does great surveys in the same way, PWC does great surveys, KPMG does great surveys, Black Book did great surveys, JD Power still does great surveys. Harris, Gallup, Rasmussen…there’s a place for all of them if they sustain successful business models. I’m back in the business and I make sure we are included in every free lists and directory. I don’t over evaluate inexpensive advertising opportunities either like IAOP or blogs like this. Those choices are simple and not worthy of over evalution.

    PS – I am sure all list haters didn’t get past the first paragraph!

  10. Phil Fersht
    Posted May 9, 2013 at 11:44 am | Permalink

    @Fran – I actually read all your paragraphs – succinctly put! As a research firm, we (HfS) put together Blueprints that evaluate providers and consultants on their innovation and execution capabilities and leverage the industry at large to crowdsource fair scoring. If a provider declines to participate, we have to mention it. We also make sure the readers have easy access to the methodology so they know the rating are more than the arbitrary judgement of a single individual / group of individuals.

    Like you, I have been jaded by the “list hating” arguments over the years. After the famous “Black Book” fiasco, I think everyone in the know approaches everything list this more skeptically (and cynically). Lists like these are important to many clients in need of consulting support. Whether accurate or not, companies will often make decisions based on rankings like this. This is why some marketing folks, such as yourself, simply decide to blanket-spend on all these entities to make your you get mentioned. And if you have marketing budget, why not? It’s an easy strategy and ensure you get your name mentioned…

    However, there are many vendors / advisors etc who are loathe to “jump through the hoops” to appear favorably in lists like these (and many who simply do not have budget to join associations / pay for subscriptions etc). My advice to them is simply to decline participation, but ensure the list-maker clarifies the fact that you opted out.

    PF

  11. Larry
    Posted May 9, 2013 at 12:30 pm | Permalink

    Phil,

    Kudos for highlighting this. I was curious why many of the main advisors had been omitted from this list,

    Larry

  12. James Levy
    Posted May 9, 2013 at 1:20 pm | Permalink

    It’s a great list – just one minor change needed to the heading:

    “World’s best Outsourcing Advisors who spend money with IAOP”

  13. Wojciech Poplawski
    Posted May 9, 2013 at 2:31 pm | Permalink

    This discussion reminds me the conversation I have during one of the recent industry awards events in Poland.

    Until the industry and community mature, it is wise to decline to participate. Seeing the half of jury members (and/or their companies) the winners I left the show disappointed as until today I have no clue what criteria or accomplishments made the winners win. I am wondering how these institutes can then convince their buyers on the outcome driven approach if they accept being the winners without telling the world what metrics made them so unique. I am not jelaous – I desire to learn from the best but they should have courage to get on stage and speak up on what they did differently…that I could “steal with pride”! and let the innovation cycle go on!

  14. Posted May 9, 2013 at 2:38 pm | Permalink

    Come on,list haters. Can anyone honestly say that they had a bad steak at one of “The Best Steak Houses in America”?

  15. Posted May 9, 2013 at 4:22 pm | Permalink

    It would be loverly to be part of an industry that does not require tribute money. Perhaps in my next life…

  16. Phil Fersht
    Posted May 9, 2013 at 6:20 pm | Permalink

    @Deborah: this whole sourcing industry now has “pay for play” as part of its fabric. Whereas 5 years’ ago we were shocked at the “cash for rankings” antics by that much-talked-about racket, today, everyone just expects it and splashes the cash. Outsourcing has enough issues with political and people concerns before we have to contend with all the lists and awards etc. There are a whole host of these “associations” on the take…

  17. Fran
    Posted May 9, 2013 at 8:48 pm | Permalink

    My past employer paid every company (Deloitte, Everest, AMR) you @Phil used to work for alot of money just to be on your hottest “research” studies back then, so throwing stones at others from your glass house is very very very funny.

  18. Phil Fersht
    Posted May 9, 2013 at 9:05 pm | Permalink

    @Fran (or whomever you are) – firstly, thanks for having the stones to air your feelings – I do appreciate it. If you have to know, our recent F&A BPO Blueprint had some of our largest provider clients performing averagely (and worse). In fact, one discontinued its services with HfS because they were so upset with the honest appraisal of their performance (and another one almost did). Sure, we sell research to the provider, buy and advisory sides (that is our business), but we’d never distort provider performances against each other for money. I don’t think any of the other reputable research houses would do that either. One other fact… I’ve personally never put together a published view of provider performance in my career until that report last month… it actually ends up costing the analyst firm, as you can’t make everyone look good… unless we put everyone in the Winners Circle ;)

  19. Posted May 9, 2013 at 11:45 pm | Permalink

    ISG and PwC – they can have their own reasons to decline participating. Any way, I don’t think it is a bad list.

  20. Guarav
    Posted May 10, 2013 at 8:19 am | Permalink

    Phil – the HFS Blueprint is one of the few honest appraisals in the industry. Shame on firms for canceling research contracts if they do not like where their clients place them.

    I agree with what you are Deborah are saying about too much “pay for play” in this business,

    G.

  21. Anon
    Posted May 10, 2013 at 9:26 am | Permalink

    Doesn’t anyone see how conflicted Deloitte is as a business consulting firm AND provider?

  22. Phil Fersht
    Posted May 10, 2013 at 10:30 am | Permalink

    All – getting a lot of offline support from folks about ELIX-IRR. Sounds like an interesting up-and-comer…

  23. Al Crew
    Posted May 10, 2013 at 11:44 am | Permalink

    As I am sure many of you know, the law firms included on the list actually DO advise clients on operating models, sourcing strategy, supplier selection, etc. I saw this first-hand during my 5 years with Pillsbury – who in fact created a small consulting practice within the law firm. So they do have a valid place on the list…

  24. Phil Fersht
    Posted May 10, 2013 at 12:24 pm | Permalink

    @Al Hmmm… have seen Pillsbury in the odd deal in the past doing down-selection and business case work (such as Hertz) but they seemed to turnover many of their key folks very quickly… which other Law Firms are actually doing down-selections and strategic consulting beyond contracting?

  25. Al Crew
    Posted May 10, 2013 at 12:58 pm | Permalink

    Phil – In my view, the reason the law firms are not so visible in this line of work is that they often are brought in through the General Counsel’s office and support initiatives that the client wants performed out of the public eye…but I don’t disagree with the general comments about “pay to play” in the broader market today.

  26. Alan Christopher
    Posted May 10, 2013 at 1:45 pm | Permalink

    IMHO – consultants need to be investing in thought leadership and research, not buying their way to the tops of lists. It’s lazy marketing.

  27. Jerry E Durant
    Posted May 10, 2013 at 8:05 pm | Permalink

    We likewise chose to decline participate, pay money or enter into contests just to get a little extra brand push. As was mentioned, this in some small way costs us business but at the sametime I don’t feel compelled to be working with companies who rely on lists as the means of securing a supplier. If that be the case then they can save on getting the lists by doing a internet query.

    Furthermore, we have prided ourselves in maintaining the highest degree of confidentiality for our clients. For this reason we work diligently to keep them protected and hidden, and can respectably boast over $3.2 b in sourcing related support services. This is not bragging but simply a care and attention items as it relates to sensitive client business needs.

  28. Phil Fersht
    Posted May 12, 2013 at 9:35 am | Permalink

    The outsourcing business can’t get out of its own way to take the industry forward. Poor marketing, poor communication and the same old content. What has changed in the last decade? I go to some of the these events and it’s the same old stuff regurgitated again and again. The poor image of outsourcing will never improve until we all change the message and improve the quality of the conversation.

    PF

  29. Bob Sutton
    Posted May 12, 2013 at 2:53 pm | Permalink

    Phil,

    Hear hear to that!

    Bob Sutton

  30. Charles
    Posted May 12, 2013 at 4:56 pm | Permalink

    Interesting thread, and I agree with some of the sentiments here that these types of practices are not helping the outsourcing business as a whole. Organizations such as IAOP need to change their age-old approach of producing lists (however they compile them), and produce data that is balanced and supportive of its members who really need balanced information and support. If IAOP’s objectives are simply to make money for itself, then good for them… let them get rich from the marketing budgets on offer. However, if IAOP’s mission is to provide education for organizations on outsourcing and help introduce them to suppliers and consultants in a fair and balanced environment, then something has gone badly wrong.

    I suspect IAOP makes the vast bulk of its revenues from the sellers of consulting and outsourcing, which is why it’s really providing little more than a marketing vehicle for the industry. There’s nothing wrong with it, but they need to disclose their true mission and purpose when producing lists like this.

    Charles

  31. Confused
    Posted May 12, 2013 at 9:33 pm | Permalink

    To answer the question… if this included ISG, PWC, McKinsey, Bain, AT Kearney, BCG, Everest, Alix Partners and several others I have probably overlooked, then this list may be somewhat credible.

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