| | 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. "We | |
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| | 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 | |
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| | be priced 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 longer 'does it work',
but 'does it work for | |
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| | 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 granularity from | |
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| | 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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