Principles and Practices for Orchestrating Digital Value Chains

In two previous posts ( here and here ) I wrote that the outsource market in Q4 2008 and Q1 2009 was severely impacted by the effects of the economic meltdown. Especially the volume of big, complex deals was hit badly and the attention shifted to smaller deals to reflect the lower risk appetite of most companies. I see quiet a lot of activity going on within smaller Dutch outsourcing advisory boutique firms and some of these firms are actually actively hiring sourcing consultants again. So despite the fact that outsourcing introduces additional risk can many companies not resist the temptation. Outsourcing with as a main driver to cut operational cost in the shortest time possible also means that sourcing advisory firms will be asked to a) spend the bare minimum on advisory and b) get a signed contract as soon as possible. I expect that this will result in cutting corners and thus an increase of advisory work in the area of renegotiation and mitigation within one or two years. See t...

This post is a follow up on this post in which I started with an overview of the different types of sourcing advisory services out there. This post continues with an overview of the different services. In a future post I will look into the (dis)advantages of the delivery models deployed by sourcing advisory firms and where I think sourcing advisory services are heading too in the future. Tax Advisory: when outsourcing activities in many countries or setting up a captive in another country it might be wise to ask a tax specialist for help. Tax specialists can help with some financial reengineering allowing for a reduced slice of money going to the government and with ensuring the company does not run the risk of breaking any country specific tax laws. These services are provided by Big 4 firms and boutique firms. Pro’s: optimizing the tax structure can potentially reduce the total cost of ownership of the engagement and make sure the company stays compliant with country specific tax...

Sourcing advisory has come a long way and there are several well established (boutique) players which providing a broad scale of services. There are basically three types of advisory firms: Independent one-stop-shop . Firms like KPMG, PWC and Deloitte have a broad spectrum of skills and knowledge, including people which focus on sourcing advisory, tax and SAS 70 assurance. Independent niche players. Firms like Equaterra, TPI, Quint Wellington Redwood, Everest Group, Gartner and many more focus on helping clients with the design & implementation of a shared service centre or finding a suitable vendor to outsource certain activities to. Other nice players focus on helping clients to draft an adequate legal contract, deal with specific HR topics, benchmarking or optiming the tax structure of the deal. Supplier-dependent niche players . Suppliers themselves have sometimes (small) departments which also provide advisory services in the area of outsourcing (e.g. setting up a sourcing go...