Offshored, procurement related research – a note of warning

The Internet has led to some great business opportunities, including making research across a whole range of topics much easier and more cost effective. So a number of firms have been very successful in offering procurement and market analysis type research services on an outsourced, offshored basis. So a CPO in a large organisation, who previously might have had their own small team to do that sort of research, now contracts with an external provider to produce  a particular research report.

Typical topics for procurement related research might be around likely market developments in a particular industry, or perhaps identifying suppliers in specific developing countries .

So we’ve seen the rise of these firms, some very large and successful now, who offer services to clients internationally, including in Western Europe and the USA.  The research will be carried out from a lower cost country – probably India – but with no lack of quality, they will say, as there are plenty of very bright graduates in India and similar countries.

The attraction for the buyer is both apparent capability (the firms claim expertise in market and topic areas),  and certainly the price – a fraction of what a local western consulting or research firm would charge, or even what it would cost to do internally. That's a straight labour arbitrage play -  because the researchers, probably young graduates, are paid perhaps 20% of an equivalent "western" salary.

I have no problem with that model conceptually. If you believe in free global markets, and the expertise and cost advantages are genuinely there, we should be happy to support this model.

What I do find galling though is how the  “research” actually appears to be executed.  Certainly in some cases, the research firm’s staff in India identify procurement or other relevant executives in the UK, the US, or wherever, who have some expertise in the topic.  They contact them via LinkedIn or similar routes, then ask them to contribute to the work.

I’ve had many messages like this recent actual example:

“Dear Sir,

Hope you are doing good!

I need your guidance on one topic. Let’s say if the xxxxxx prices are expected to increase in next 2-3 years ( due to significant gain in demand amid limited capacity expansion), what actions a procurement manager should take to mitigate this kind of risk?

Thanks in advance!



I’ve disguised the category and the sender as I don’t want to get this person (who I seem to be LinkedIn with) in trouble. I’ve had the odd phone call too – when I explain that I also make my living through my knowledge and intellectual property, and maybe they’d like to pay me a percentage of their fee, somehow it goes very quiet.

Presumably, there are enough gullible, helpful, bored or easily flattered “experts” who respond more positively than me, and provide material that the researcher can them put together into a credible report back to the client.  And maybe this is just a valid example of "crowd sourcing", which is terribly fashionable.

But if you’re someone who contributes their expertise, without recompense, then remember you’re helping to reduce the amount of paid work for people just like you.  And if you’re a buyer of these services, next time you commission an offshored research report, just remember – the key insights you’re getting may be (in part at least) coming from a bored contractor sitting at home in Derby, Dusseldorf or Detroit, holding forth about their own market views, prejudices or crackpot ideas.


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Voices (2)

  1. Trevor Black:

    Peter, I am in total agreement. I don’t have a problem in sharing some expertise on some procurement related subject that may arise but have also fallen ‘victim’ to this research nonsense. Despite clearly indicating that I am not prepared to deliver their procurement strategy free of charge through linkedin I feel similar to someone who may have given a positive response to some strange sect where ‘no’ is regarded as a positive. I still have nightmares as a result of saying ‘that’s very nice ‘ to a lady in Spain who was selling linen table cloths who then pursued me through the streets demanding that I buy one. Perhaps I need to enhance my negotiation skills or learn what ‘on yer bike’ means in several languages.

  2. Senthil:

    Peter, This is not a healthy trend and no one should violate knowledge etiquette and intellectual property. In the era of Cost arbitrage these things are tend to happen in an open economy and in flat world though. Due credit needs to be provided to the creators and thinkers with due acknowledgement and inform the source about where it is getting used and get prior approval for usage, may be at least as a courtesy. End of the day it is business for any one and things need to be sorted out in a professional way by partnering though on content usage, rather than developing hatred between the parties. I completely understand the emotions and feelings vented out here. Not sure though why these kind of emails are encouraged by bloggers! As a courtesy and request you could remove the country flag at least :)! You could post this or filter it as you prefer !

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