| | By Mick James
One of the
interesting trends in
the resurgence of the
"client-side" advisory
firm is the way that new
consultancies are
opening up opportunities
for themselves in value
chains that were
previously owned in
their entirety by the
big consultancy firms.
Nowhere has this been
truer than in
outsourcing. When the
worlds of consultancy
and IT converged, the
resulting big firms
pretty much had a lock
on both business process
and IT outsourcing as
well as the related
advisory work. But not
everyone saw this as
such a cosy set-up, one
group being the three
former Ernst & Young
partners who set up ALS
Consulting in 2002.
"We came from E&Y's
Global Operate arm which
was its BPO business for
finance, procurement and
HR, all of which were
part of the sale to
Capgemini," says
founding partner Tim
Lloyd. "We decided to do
something different —
that business was not
going in the direction
we wanted to go."
Coincidentally, and
independently, another
group of E&Y partners in
the States had the same
idea, forming
Trowbridge.
"We saw we were doing
the same sort of work
for the same sort of
clients," says Lloyd. | |
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| | "We began to share
skills and intellectual
property, so we decided
to get together and
co-brand. The result was
Alsbridge, of which
Lloyd is European
managing partner, and
the move has created
greater market
opportunities on both
sides of the Atlantic.
"It's opened up a new
set of clients, clients
that wanted this kind of
service globally," says
Lloyd. "It's not been a
typical merger, we don't
do politics, we just
focus all of our energy
on the market."
Lloyd believes the
opportunity for his firm
comes in large part from
the inadequacies of
traditional sourcing
models to deal with the
new world of outsourcing
and offshoring.
"The way industry is
used to sourcing and
still does it is very
inefficient," he says.
"Sometimes clients don't
know what they want, it
takes time to get the
stakeholders on board
and that's increasingly
expensive on the client
side."
Suppliers suffer from
a process that
interferes with their
ability to properly
build a relationship
with clients and develop
creative solutions.
"On the supplier side
we saw how inefficient
it was for the industry
to go through these
rituals, the cost of
which has to be priced | |
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| | into the work you do for
the clients you win," he
says. "Extreme positions
are taken up in
negotiations, with the
result that the solution
for the client is not
optimal, the supplier
relationship is not
optimal. That's why we
got into this business —
industry is inefficient
in the way it sources
its outsourcing
suppliers."
Lloyd believes that
many of these problems
stem from trying to
apply sourcing
techniques that are more
appropriate to IT
outsourcing to more
complex back office
work.
"Something like
desktop support is a
commodity, you can buy
it from many different
suppliers and it's just
a numbers game," he
says. "With finance and
accounting you need a
degree of flexibility:
there are so many
interfaces in and out,
and it's nowhere near a
commodity business. You
need a collaborative
approach to get the
right partner."
According to Lloyd,
what's also helping his
cause is the rapidly
changing BPO market:
"Five years ago in
conversations with
boards the question was
'does outsourcing
work?'. Now outsourcing
is seen as obvious, and
the question about
offshoring is 'tell me
how it works?'. It's no | |
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| | longer 'does it work',
but 'does it work for
me?'."
The DIY option is
certainly an option for
companies, but Lloyd
questions how much time
and effort and risk
companies have the
appetite for:
"Any company can do
it, but it's like doing
your own plumbing — what
do you do when it goes
wrong? What's your
fallback?" he asks. Even
companies who have
already outsourced back
office operations may
not be in the best
position when it comes
to renewing the deal.
"BPO is so different
these days," he says.
"Besides, it's highly
unlikely that the folk
who did the outsource
five years ago are still
around, unless their
careers have stagnated,
so you'll have to learn
it all again from square
one."
Lloyd stresses that
Alsbridge is not simply
an outsourcing advisor,
but is "agnostic" about
the solution.
"Clients don't
normally know what the
art of the possible is;
they don't know what
they don't know," he
says. "Is outsourcing
the right solution for
them, or should it be
shared services and/or a
technology play?"
He is similarly
flexible about the way
to engage with the
client: "We can help
them at any level of | |
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| | granularity from being a
one stop shop to the
other extreme of being
‘trusted adviser’," he
says. "Or we could be in
the middle and help them
more effectively manage
the implementation
team."
Within the
consultancy industry,
Alsbridge is one of a
growing number of
intermediaries whose
rubric, as Lloyd puts
it, is that "we focus on
what we know about and
where we know we add
value". There seems to
be an awful lot of room
for this approach in the
modern consultancy
market. Clients like it
because, as well as a
hand to hold, they
perceive they are
getting better value
both in cost and
outcome. I suspect the
big firms aren't too
bothered either. For
those that are confident
they genuinely offer
best-of-breed solutions.
Firms like Alsbridge
are, in effect, a
client-funded route to
market as well as the
source of more solid and
long-term relationships.
If they lose the
feasibility and strategy
work but carry on
getting the multimillion
outsourcing strategies,
I doubt any will
complain too loudly.
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