The changing view of sourcing advisors
The topic of sourcing advisors has been a regular one in this blog, and with all the recent news in terms of "ranking" sourcing advisors as well as tracking the use of sourcing advisors, it seems pertinent to once again revisit this topic. Whenever I turn to this topic, I always declare that I work for the leading global sourcing advisory firmTPI.
Many possible reasons are offered as to why the use of sourcing advisory firms has become almost "the norm", but perhaps a good starting point for discussion is the other firms crucial to the sourcing industry, namely clients and service providers.
We can see a continuing shift in clients towards a "get-it-right" attitude. No longer is sourcing a learning exercise for both individuals and companies. It is a part of every major organization's business strategy. As such, leveraging the best available skills, including external advisory skills, sees a natural boost in demand.
Historically, that boost in demand was tempered by service providers who were anxious, at best, and hostile, at worst, to clients using sourcing advisors. However, we can see a marked change in the view of service providers. Whereas sales pursuits that involved advisors used to receive "black marks", today, a 180-degree shift can be seen where sales pursuits that do not involve advisors now receive those same "black marks".
This is not to suggest that service providers necessarily "like" sourcing advisory firms. Rather they have come to a pragmatic understanding that good sourcing advisory firms (and there are lots of firms that don't necessarily satisfy that concept of good) reduce transaction costs, and that has to be good for the service providers' business and profits as well as good for clients.
As our industry keeps maturing, I expect we will continue to see a rise in the use of sourcing advisors and also more rigorous evaluation of sourcing advisory firms, especially in terms of how they help to reduce transaction costs for both clients and service providers--remembering that transaction costs include both the initial "deal" as well as the ongoing costs associated with the transaction.
Delving into how we measure transactions costs sounds like a good topic for a future entry in this blog.