It’s that time of year when the well-known outsourcing advisory firms — all two of them — provide their second quarter analyses of the outsourcing market.
You have to read these reports in the spirit they are written, by consultants who depend on the continued health of the outsourcing market. So, there wasn’t too much unexpected in EquaTerra’s Q2 Pulse Survey: Outsourcing demand is up, IT remains the biggest area for outsourcing, knowledge process and R&D outsourcing is gaining traction, deals are getting smaller, and outsourcing in the public sector is on the rise. (For more on the latter, see Public Sector CIOs Cash In, Become Outsourcing Consultants.)
But this little nugget caught my eye: third party service providers continue to experience “capacity constraints.” In English, this means your outsourcers are dealing with the same HR problems you are. And, according to EquaTerra, the outsourcers are getting squeezed in every possible area, from sales staff to transition teams to those involved in day-to-day service delivery. Not a shock — things are tough all over.
But it’s not just bad for the IBM’s and EDS’s (and Wipro’s and Tata’s) for whom these people problems negatively impact growth, competitiveness, sales cycle, time-to-contract, and profitability.
It’s bad for you.
EquaTerra says buyers need to press even harder on outsourcers to make sure they’re getting the provider’s A-team on their deal (presumably there are fewer such elite teams to go around now), adjust their transition plans and resource requirements, and take the talent shortage into account when planning for long-term outsourcing governance.
Granted, part of this is just good PR on the part of EquaTerra: “you need us to help you through this.”
But it’s something to think about. Are you getting your outsourcer’s A-team? If you’re not getting them, who is? Do you even know who your provider’s A-team is?
CIO magazine / CIO.com