The Growth of “Marriage Brokers,” in the Outsourcing business…

An awesome blog dedicated to outsourcing…

And a great article that shows me that I have been seriously undervaluing my services…

I am seeing increased demand for outsourcing advisors early this year to facilitate outsourcing transactions. The applications outsourcing space, in particular, is showing no signs of slowing down as companies seek to renegotiate existing contracts and a host of enterprises are evaluating their options for the first time. Having spoken to several outsourcing providers over the last couple of weeks, I am increasingly seeing small advisors with low cost-bases in on the game. These firms can afford to work with clients and run deals for $250-600K for a typical 4/6 month outsourcing advisory engagement. The 4-6 month time-frame is what it typically takes to conduct a baseline analysis, develop and administer an RFP, downselect vendors and negotiate a contract. When firms want to negotiate a $10m ADM deal, for example, they do not want to spend more than 5% of the TCV on advisory fees to do the deal in the first place. This causes issues for the higher-cost advisors, who simply cannot afford to entertain low fees at this level to conduct the same work.

I am seeing smaller advisory firms such as W Group, Argea, TBI, Pace Harmon, Alsbridge and Archstone Consulting as very active in the industry facilitating client engagements right now, and competing very effectively with the established outsourcing advisory brands, namely Deloitte, TPI, PWC, Equaterra and Everest Group. So what is going on here?

1) Enterprises need advisors to facilitate and negotiate deals for them. Quite simply, most enterprises do not have the inhouse expertise to manage these complex transactions themselves. They have to use third-party support, or risk getting a poor deal and poor service levels.

Read the entire post

I was not aware of the overall size of this business segment. It has been interesting watching and experiencing the growth we have experienced in this space in the last couple of years. It is particularly clear that
having a consultant on the ground, familiar with the culture, adept at the language and steeped in local business traditions, is an advantage. Our experience and contacts in the region have undoubtedly saved our clients time, money and frustration, at significantly less cost than the above article indicates. Nevertheless, it is a good sign for the future of our business. We actually just started a new contract this week to help a player from the U.S., establish a Central American presence.

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