Firms that advise on outsourcing deals are growing as old outsourcing contracts come up for renewal and companies seek advice on outsourcing higher-quality services and dealing with more complicated contract arrangements.
While billion-dollar contracts outsourcing work to a single vendor are still routinely negotiated, more companies are seeking multi-vendor agreements that will provide them with higher levels of expertise in desired areas, according to an industry survey published earlier this year by Forrester Research, an independent market research company. Many large outsourcing contracts are also expiring this year, giving companies a chance to re-evaluate their needs as the industry matures.
These trends mean opportunity for outsourcing advisory firms, which can help companies identify vendors and devise comprehensive strategies before they sign oursouring contracts.
“There are fewer mega outsourcing deals happening, but there are lots more big deals,” said James Alberg of Pillsbury Winthrop Shaw Pittman LLP, a D.C.-based outsourcing advisory firm.
Alberg said his firm has seen increased demand for advice on businessprocesses, finance and accounting, human resources, facilities management and procurement.
Pace Harmon, an advisory firm based in Tysons Corner, announced Monday that it is boosting its work force by 30 percent over the next 90 days, bringing its total number of consultants to 85. It reported 44 percent work force growth over the first half of 2007. Large firms like Deloitte, whose advisory services team comprises about 350 members, and TPI, which employs 370 outsourcing consultants, are experiencing similar growth. Last year they reported staff increases of 10 and 30 percent, respectively, according to Forrester research.
“The vendors obviously have a conflict of interest,” Alberg said. “People are realizing as they go into second and third generations of these deals that it’s to their benefit to have an adviser working with them.”
