We completed our survey looking at the world of third-party sourcing advisors this week, with the high-level results being discussed by my friend Ed Nair, over at Global Services Media.
One of the key takeways, which I wanted to share with you, is the importance of the sourcing advisor / vendor relationship. Of the 114 advisors who completed their section of the study, almost half of them revealed they frequently get business through their relationships with vendors. We always knew that vendors refer advisors in certain client instances, but not to this extent:
Normally, you would only expect a vendor to refer a third-party advisor to their client, if there was limited opportunity of a sole-source deal, and it needed an advisor to accelerate the process, with the hope their existing relationship would eventually win them the business. There is nothing sinister in that.
Naturally, a vendor prefers to refer an advisor with whom it prefers working, where it understands its downselection and sourcing methodology. However, the overwhelming extent to which this is happening gives me some pause for thought. Vendors have been referring their preferred consultants and analysts to their clients for years. Consultants can provide education and unbiased advice (which we discussed here), whether it's about outsourcing, software selection, governance, risk management, and so on. However, when you hear about some of the cosy industry relationships where one vendor is always referring the same advisor, you have to pause for breath and think "is this crossing the line between educating a client and overly-influencing a client?".
So… while the smart vendors and advisors are investing in their mutual relationships – which is critical in this industry (there would be no outsourcing industry without the investment of vendors in their global delivery infrastructures), buyers need to be aware of these dynamics and ensure they have other validation points to underpin their decisions. The need for independent forums, research and informal peer networking has never been as great as it is today.
Posted in : Business Process Outsourcing (BPO), Captives and Shared Services Strategies, Finance and Accounting, HR Outsourcing, IT Outsourcing / IT Services, kpo-analytics, Outsourcing Advisors, Procurement and Supply Chain, Sourcing Best Practises