Could KPMG be about to buy Equaterra?

I’ve been informed by a reliable source that sourcing consultancy Equaterra is being acquired by KPMG, one of the big accounting and consulting firms.

Equaterra has developed a good reputation as a specialist advisor on outsourcing issues, and you’ll have seen Lee Ayling, managing director of its UK IT advisory services, mentioned in this blog on several occasions.

It’s interesting to see that a firm like KPMG – which no doubt already offers sourcing advice and consultancy – is looking at a smaller specialist like Equaterra. If the move goes ahead it reflects what is happening in the wider IT sector, with big-name suppliers buying up a lot of small or medium-sized firms.

Is there a future for specialist sourcing advisers such as Equaterra, or is it inevitable that the market will come to be dominated by the big consultancy firms?

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The days of deal making for fees >2000 euro (or dollars) are over. Clients know how to make bid-books on there own and some already experienced that it’s important to start working on relationships before the deal is signed. Mediation and exits is not ‘the next thing’ to renew revenue streams for boutique-firms. The real value is making outsourcing work. Seniors with tons of experience on how to make a deal fly of how to reinvent a contract, can be of great value delivering the promise of outsourcing. The value the nimble and experienced can deliver? They can see beyond a short-term financial business case. In this new decennium IT is not only about reducing opex, but also to make the business grow: more flexible, agile and innovative. The future mode of operations is at stake. Compliance and legal issues (cloud, offshore) make sourcing very, very interesting for the big consultancies. They already have practices for legal, audit and compliancy in place. So, we will have two flavors in my opinion: the ones making deals fly and the big firms doing everything that should be done by the book in a world that gets more complicated (by bureaucrats, politicians, regulators and ‘chief embezzlement officers’).

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Marco is right, in that the real opportunity area for sourcing specialists is not in getting the contract right and getting it signed (though this remains obviously critical) but rather sits in the Service Management area. ITIL, and it's comparator tools, have good ideas but are lightweight on practical examples; the sourcing advisory firms are heavy on very good pragmatic material but only to just-past-signature o'clock. The really clever money, however, has to be on the Service Providers who offer a proven set of tools and techniques, and people who can make them work, to achieve the business outcomes that were the driver for the original change. TPI are well-positioned here (I dont work for TPI) but other service providers can smell the lunch. Hopefully this will result in some strong, thorough implementations that accord to the Gospel of ITIL 3 and will deliver strong success for the client.

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Marco is right, in that the real opportunity area for sourcing specialists is not in getting the contract right and getting it signed (though this remains obviously critical) but rather sits in the Service Management area. ITIL, and it's comparator tools, have good ideas but are lightweight on practical examples; the sourcing advisory firms are heavy on very good pragmatic material but only to just-past-signature o'clock. The really clever money, however, has to be on the Service Providers who offer a proven set of tools and techniques, and people who can make them work, to achieve the business outcomes that were the driver for the original change. TPI are well-positioned here (I dont work for TPI) but other service providers can smell the lunch. Hopefully this will result in some strong, thorough implementations that accord to the Gospel of ITIL 3 and will deliver strong success for the client.

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