Are Consultants Really That Important to Procurement BPO Provider DNA? We Say No…

Earlier this year on HfS Research, Deborah Kops penned a thought-provoking column titled Where have the consultants gone? In it, she describes the state of the current BPO market and the fact that a number of the current providers have teams with less and less experience as former consultants. Deborah suggests that many of "the pioneers of the outsourcing industry, primarily BPO, came out of consultancy backgrounds. And as they leave the industry due to retirement or the pursuit of other interests, the sourcing community is much less well off." Fast forward to today, and "the makeup of provider teams has inextricably changed...those with deep consulting experience are rapidly moving out of the picture, while the leadership now comes from armies of managers whose base of experience is solely time in grade in the outsourcing industry."

The fundamental crux of Deborah's argument is that consulting DNA is somehow a good thing for BPO. But if the procurement BPO industry is as good example as any to point a finger at, you could potentially argue the opposite as many of the big bust deals (of the past and today) -- from the original Deutsche Bank outsourcing implosion to the more recent BPO provider series of missteps at a "major CPG company" -- came at the deft hands of BPO providers coming from a parent organization with a consulting past. Now, you might argue that many of the more high profile missteps in procurement BPO logically involve a legacy consulting/BPO shop (e.g., Accenture, IBM), as it is these partners and executives who are good at selling the "big bang" procurement BPO deals that are more likely to fail -- and are higher profile when they do -- than the often more surgical strikes that the Indian firms begin to take before broader deals in many instances (not to mention ICG Commerce and others which often start on a more targeted, expert basis).

Yet I might take a more aggressive stance and suggest that consulting DNA might actually be a determinant when it comes to building a BPO operation -- at least consulting DNA at the core. As a former consultant, I know many of tricks of the trade. And I believe that fundamental, short-term value alignment is very different than camping alongside side the customer, rather than the client -- not to mention depending on your client to light the fires with you. Moreover, I don't believe the consulting generalist approach makes a lot of sense in complex indirect categories where true depth of subject matter expertise and complete end-to-end excellence is what counts relative to the "soft hands" of client management and isolated process management (e.g., institutionalizing a strategic sourcing process). Call me crazy, but I almost believe that in order to drive procurement BPO adoption to a new level, we must first focus on overcoming the well-known cock-ups of the hybrid consulting/BPO firms rather than anything else.

Jason Busch