Some excellent feedback and comments from you regarding our recent discussion about the cost and delivery models sourcing advisors need to deploy with cost-constrained clients. Lee Ann Moore of sourcing advisory firm Equaterra, has shared some experiences her company has been finding in this market, and offers some alternative services advisors can deliver, beyond trying to crack a wall-nut with a sledgehammer. Lee Ann is one of the behind-the-scences brains behind the rapid rise of the firm since 2003, being the company's first employee and Chief Marketing Officer. Over to you Lee Ann.
"Corporations are in a state of flux and uncertainty. Many of our clients are announcing layoffs and going through divestitures, mergers and acquisitions – activity that places pressure on their sourcing organizations that often exceeds capacity and capability. These companies must demonstrate productivity improvements and cost savings now. Doing nothing is not an option, and many organizations avoid a doom loop by using flexible advisory services when they cannot afford full-time employees or consultants for business transformation projects.
"Sourcing advisory firms are adapting to the client demands. They are offering more flexible services, and are trying door-opening tactics to help client’s begin engagements. One offered a $500 research report for clients to get the inside story on the Satyam situation. Many firms are staffing engagements with a single sourcing advisor, and these projects may feel more like a staffing model than a consulting project. In other instances we see advisory firms providing only tools and templates with limited or no advisory support. Other projects are workshops and training sessions to support knowledge transfer for the client to tackle the project on their own. Fixed fee arrangements are much more popular this year than last. We have seen gain sharing projects with fees tied to cost reduction. The list of options goes on.
"As an advisor, the market has driven us to be more creative and we have introduced software into the sourcing and governance processes to help clients reduce costs. We also offer flexible pricing models several that spread advisory fees over the life of an engagement to help our clients incur the cost as they achieve savings. We deliver the sourcing and governance support through the software we developed with Microsoft and the savings result from automated processes and streamlined decision-making and reporting.
"Advisory firms continue to support clients on complex engagements with multi-person teams that possess a cross section of skills and expertise. But, all advisory firms have been forced to modify their approach and cost structure to provide the flexibility clients now require. Questions remain on global sourcing, service delivery options, flexible contracting and right-sizing the back office. Analysis of those questions and the format for rationalizing the answers continues to change. Companies are forced to demonstrate results yet have leaner staffs now than they likely did a few months ago.
"With staff reductions, and limited consulting budgets, who is going to do this work? The advisors who respond with service offerings that flex up and down and demonstrate a strong ROI will be best positioned to meet these new demands."
Lee Ann Moore is Chief Marketing Officer for Sourcing Advisory firm Equaterra