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A few years
ago when an industrial-design dropout decided to set up an
IT-services firm, he knew that the big fish in the sea had
all that was needed to survive — process maturity, proven
track record and deep pockets to grab any customer, big or
small — unlike him who just had a vision to offer innovative
solutions, something that these biggies did not. Sunil
Malhotra, the founder and CEO of a very small IT-solutions
firm, knew he had to build his core competency somewhere
else. He chose interdisciplinary capabilities, ideas and
innovation to be it. And that remains the seed of his
venture called Ideafarms, where he and his team of 30 work
toward not delivering a good cost or technology model, but
ideas.
Small and mid-sized service providers may not have thousands
of workers on their payrolls or funds to last them very
long, but innovation by means of personalization is core to
them. While they have to work many times as hard to deliver
on the promises and to match up to the biggies in the game,
boutique service providers need to bring in more innovation
in the solutions they offer. Many a times, they are trusted
for not the cost or technology they are going to deliver,
but for ideas and quality with which they will.
Yet, many companies prefer to outsource to the big players.
The risk of things not working out is very high, and it’s
better to opt for a known devil than an unknown one, they
reason. The large service providers give the comfort of
well-designed processes as a result of having repeatedly
done the same job for hundreds of customers. So what, if
they offer the best fit (the closest possible match to the
customer needs) and not the perfect fit? They are too big to
devote time to the nuances of your business.
Myths Surrounding Boutiques
While boutique outsourcing service providers — companies
providing specialized services, with strength varying
between few tens of people to may be a thousand odd — may
not have something for everyone because of the limited
resources they have, they intend to excel in any service
they provide. As a consequence, most of these firms have
specialist areas in which they operate. And since they have
to work twice as hard to win customer confidence, they need
to exhibit quality to survive. Where it is difficult for the
Tier-2 players to make a mark in this highly competitive
market, there are many myths surrounding them. Some of them
are:
Contracts with boutiques come at a lower price: While there
may be a price differential, Tier-2 providers are not always
the cheapest solution providers. In a conscious attempt to
provide some services that the big companies are not able to
provide, these companies go that extra mile to service their
customers.
"None of our projects come to us because we were cheapest on
the bid. They come to us because of the talent that we bring
to the project and out flexibility to respond as the
customer grows"
Kevin Bolen, CMO, Lionbridge
“None of our projects come to us because we were cheapest on
the bid,” says Kevin Bolen, CMO, Lionbridge, a company into
content support and software development and testing
services that has six centers worldwide with two in Eastern
Europe (about 350 staff), two in India (more than 1,300
workers) and two in China (a total of about 300 employees).
“They come to us because of the level of the relationship,
the level of access to talent that we bring to the project,
and our flexibility to respond as the customer grows,” adds
Bolen.
Another reason why clients consider smaller outsourcing
firms against the bigwigs is that they provide more intimacy
and agility, and lesser bureaucracy than the big players.
The Tier-2 players operate with minimal level of
intervention as against the large providers that take
decisions slowly due to multiple layers of bureaucracy.
Customers also opt for the smaller players as a means to
spread risk across providers.
“A big advantage [of working with a small provider] is that
customers can reach decision makers without too many
intervening layers, and so work proceeds quicker,” says
Vijay Menon, VP, Marketing, QuEST, a boutique IT firm in the
engineering services outsourcing space.
Smaller and lower priority projects come to boutiques:
Important projects and big clientele is proof that this is
not true. Companies as big as Pizza Hut, Continental AG,
AOL, Merck, DocuSign and Palm are working with these
specialized players for some of their important projects. It
is also not a good idea to work with boutique providers for
routine tasks like quality testing and maintenance; these
are better left to the larger players who have over time
developed process maturity and trained people for such
tasks. The smaller firms are more suited for innovative
projects — they have the time to invest in your business.
Source :
http://www.globalservicesmedia.com/Content/general200707282537.asp |
