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Feb 14, 2010

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Phil, you have captured exactly what's going on with the majority of outsourcing vendors.

There is a dire need to help them make the transition from New Account Acquiition to Global Account Management model, Right now it's about opening the doors with no much thought about what's happen once you are in. It is like buying companies for their book of business to make quartely numbers but not doing anything else about the leverage.

The trouble is, there is a finite numbers of cows and you may need a lot of sheeps to make a cow.It also reminds me about the story of how big an elephant is? Some go the tail, some go by the tasks.

John

I think it has been years since any of them actually had the towel.

I've worked as a sub-contractor for consulting shops and I've seen no evidence of genuine innovation for over a decade. I would add that very little of the Dot com bubble period was actually innovative. Novel by definition but technically not pushing anything innovative.

Innovation is sort of the story line for consulant shops but it is rarely put into practice. Nobody wants to take a chance on loosing business and a conservative process may not serve the client for the long term but it does serve quarterly profits well.

Geoff Feldman

Phil,

There will always be sales pressure but delivery is where vendors demonstrate value and begin to differentiate themselves.
We have been all sold to and may have done some selling on our own. Be rest assured vendors who are investing time and committing quality resources to existing clients are doing their reputation a lot of good.

"Innovation", "Flexibility", "Best Practice", "Competency Center", "A team", "Executive Attention" are the buzzwords that folks in sales cycle use. How much of this is delivered to client account is the acid test of any vendor. If vendor is delivering on this you build a strong partnership with client.
We have started seeing clients measuring their vendors on not only SLA but also on many soft parameters to determine maturity of their outsourcing engagement. There is also an effort to quantify value adds and innovation.

You are RIGHT ON in this post. Outsourcing is simply not the same as selling hardware or software to IT groups.

It is (should be) all about relationship management at a senior level. I have worked at several outsorcing companies (the older traditional on-shore IT variety). In every case there were separate Sales (Business Development) and Account Management functions. Each were commissioned and each had hefty "sales" targets. Overall the expectations varied as to whether new business or existing client sales would lead the company growth in any given year. The split largely depended on the existing pipeline of new business. If there was a heavy pipeline of new client business going into a new year, the expectations were higher on the New Client side (and vice versa).

At these companies it was also well understood that sales of outsourcing was a "C" level relationship. They hired people who either had a track record of sales at that level or who had held a C-level position. This was true in both Business Development AND Account Management. Any of these people who had a good sales year would realize compensation eqivalent to the top executives of the company.

Interestingly, this split in responsibilities occassionally caused problems after a big new client sale. The client had usually established an excellent and trusting relationship with the sales executive. Now that the sale was complete, the company would innocently march out and tell the client they were getting a new Account Management executive. Invariably, the client would become quite upset at losing their "trusted advisor". This had to be "managed" carefully.

If you don't bring in a pay the right level of talent, you will not see the results you need to grow the business. Period.

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