Business & Technology Nexus

Dave Stephens on technology and business trends

Rationalizing Consulting “Overflow” Supply

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A few large firms with big consulting practices seem to be operating off the same playbook lately – dramatically trimming their supply base for "overflow" consulting work.

You see, consulting firms of any reasonable size often can't staff all the work they receive themselves. So they outsource the "overflow" to trusted partners who can ensure high quality. And if they can markup their rates & turn a profit on the outsourcing, so much the better.

But I've been wondering about the rapid rationalization the large firms are pursuing. In general, the trend has been from small, local shops who may have personal relationships with both the customer & the large firm to larger, amorphous organizations able to operate across locales and regions.

No doubt the rationalization is resulting in great savings & improved profits on outsourced consulting work. But time will tell whether customer satisfaction ratings can be maintained through this transition.

But without more hard data, rationalization of your consulting "overflow" supply base has to be considered a best practice. And with savings being reported between 10 and 30%, it may be just the place to look to meet your next spend reduction target.

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Written by Dave Stephens

05/24/06 8:19 AM at 8:19 am

Posted in Opinion

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