| Pune,
India, 11 January 2010 - ValueNotes has analyzed and rated
40 service providers in the LPO segment using the ValueNotes Sourcing Prism
- CPA
Global, Integreon and Pangea3, amongst the industry ‘Pacesetters’, are defining
the highest standards in the industry
- Companies grouped under
‘Contenders’ have gained significant services maturity despite being relatively
new to the industry
- Companies in the ‘Aspirants’ group have established
themselves as niche players within the market
The rise in the
number of offshore and onshore services providers in the last two years has made
the vendor selection process even more critical for buyers looking to offshore.
According to a survey by ValueNotes, as reported in its research titled ‘Legal
Services Outsourcing - What do law firms think’, the following were the
top four criteria while choosing an offshore service provider: - Management
strength depicting strategic intent
- Reputation: buyers need to look at
services maturity and sustainability
- Onshore presence: to enable close
and continuous interaction with service providers
- End-to-end services
capability and scalability: for longer term contracts
The service
provider landscape has become increasingly diverse – with differentiation
becoming the norm, rather than the exception. Differences in offering, depth,
maturity, scale, and strategy pose a challenge while trying to seek an understanding
of the vendor landscape. For buyers of these services, this impedes the decision
making process especially as it pertains to vendor selection or benchmarking.
With a bid to gain an insight into the service provider landscape, ValueNotes
has introduced a model that serves as a guide to understand vendor capabilities.
According to Arun Jethmalani, Managing Director of ValueNotes, “With the
proliferation of service providers, the selection and evaluation process has become
a major challenge for buyers. The ValueNotes Sourcing Prism is an attempt to make
the selection process easier. The Sourcing Prism's three vectors: service maturity,
sustainability and strategic intent; also provide an indication of the likely
long-term success of the service provider.” The ValueNotes Sourcing
Prism represents each company on three parameters – its service maturity,
sustainability, and strategic intent.
- Services Maturity:
'Services Maturity' refers to the service expertise that a company has built in
its chosen industry. This is evaluated by assessing the depth of services offered
by the service provider, the industry experience and the relative position on
the services value chain.
- Sustainability: In-sourcing once
outsourced work or selecting a new vendor can be extremely costly for customers.
Thus a provider's operations need to be scrutinized to ensure that, along with
service expertise, the business is sustainable. ‘Sustainability’ is
measured by assessing the financial strength, company brand, scale, etc. In addition,
risks from client concentration, diversity of client base, service focus and debt
levels need to be assessed.
- Strategic Intent: A company with
strong service offerings and sustainable operations might still lack direction.
'Strategic Intent' measures the strategic decision-making element in a company,
both in theory as well as in execution.
Source:
ValueNotes Research The ValueNotes Sourcing Prism compares each company's
overall score against two benchmarks:
- Industry Average –
average rating across the industry for each parameter
- Industry World
Class – the highest rating possible in the industry, represented by the outermost
corners of the Sourcing Prism
Apart from industry measures, companies
are also classified into three groups: Pacesetters, Contenders and Aspirants.
- Pacesetters: These firms are defining the highest standards in the
industry, for the respective parameters, reaching the outermost points of the
'Y' in the model.
- Contenders: These companies have a healthy
combination of the parameters under study, and are challengers for the 'Pacesetters'
industry group.
- Aspirants: Companies in this group have the
potential, but are currently under restraints.
ValueNotes Sourcing
Prism: Legal Outsourcing The offshore legal services segment is
relatively new as compared to other knowledge services segments like publishing,
e-learning, market research, etc. As indicated in the report, very few players
have matured in their service offerings, with a majority of the offshore service
providers offering low value services like transcription, document review, secretarial
support services, legal publishing, etc. About 10-15 players have gained substantial
maturity in their service offerings and are gradually moving towards a more consultative
role (rather than the typical vendor-client relationship).
Industry
Group Analysis:
ValueNotes has analyzed 40 vendors in the LPO segment.
Using the ValueNotes Sourcing Prism, we have rated the companies in this segment.
- Pacesetters: Companies under this group, viz. CPA Global, Integreon and Pangea3,
have extensive industry experience, matured service offerings and strong business
models. These companies have moved up the value chain and have added a sizeable
number of clients. CPA Global and Integreon have been in the industry for more
than 10 years and have developed service depth for their offerings. They have
had a focused approach in terms of expansions in different geographies and services.
- Contenders: Companies grouped under 'Contenders' have also been
growing at rates higher than the industry average. These companies have relevant
industry experience although they are still in the process of building end-to-end
capabilities. A majority of them have established niches within a few select service
lines. Although some of the vendors in this group are relatively new, they have
gained significant services maturity.
- Aspirants: 'Aspirants' are
mostly companies that have been opportunistic in nature, with heavy dependencies
on one-off projects. Only a few select companies have been able to establish themselves
as niche players within the market.
The ValueNotes Sourcing
Prism will aid in sourcing strategy and investment decision making. About
ValueNotes ValueNotes is a leading provider of business intelligence
and research, with expertise across industries, particularly in financial services,
media, engineering, healthcare, IT and the outsourcing industry. We have built
strong capabilities in the collection, interpretation and analysis of data - both
qualitative and quantitative. The ValueNotes Sourcing Practice is one of
the largest information providers on the outsourcing industry. The Practice uses
a comprehensive, analytical framework providing fresh insights into the fast emerging
and yet, complex outsourcing space. We extensively track the space through regular
analysis of news and events, continuous primary research and contact with the
industry. Additional information is available at www.SourcingNotes.com ValueNotes
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