Doug Brown and Scott Wilson : We have four main groups of users who annually anticipate for the results of the Top 50 Best Managed Global Outsourcing Vendors, these are: 1.) the vendors themselves and their direct competitors, 2.) investment analysts and venture capital firms, 3.) up and coming outsourcing vendors looking for business development, recruitment and client relations opportunities and 4.) buyers, customers and prospective buyers of outsourcing services.

As this is the only outsourcing vendor ranking which is independent of application fees or advertising pay-for-placement schemes, buyers have become very dependent on the results to assist in vendor selection. In fact, many client procurement tems and CFOs have requested we provide the list and its detailed indicator outcomes on a subscription basis this year.

Clearly, the ranking’s worth is to weed out the overvalued, unethical, underperforming and problem vendors for RFP and vendor selection purposes. Because this ranking is based on current and audited client satisfaction, the cream rises to the top. Vendors on the Top 50 portion of the list are assured with a seal of integrity and the highest demonstrated evidence of user approval.

Popular and admired buy both buyers for the trust in ranking outcomes and criteria and by vendors for establishing a measurement instrument not dependent on payment for list placement, The Top 50 Best Managed Outsourcing Vendor ranking was accessed by over 150,000 website hits last year (http://theblackbookofoutsourcing.com) as evidence that buyers want to validate the prospective suppliers' standings.

Doug Brown and Scott Wilson : Outsourcing has entered a new phase of evolution marked by significantly educated and experienced clients who want shorter, more precise contracts. Indian firms appear to have recognized this customer shift and responded faster and more strategically as evidenced by the results of this year's survey.

The number of outsourcing deals continues to rise but the value of each contract has significantly dropped allowing for the niche outsourcers and the most flexible suppliers to capitalize on this demand. MNCs have a harder time shifting direction and market change factors, namely increased competition, a large number of contracts being restructured, and the value of outsourcing contracts which has dropped by 15 percent, are opportunities for the Indian outsourcing suppliers.

Clearly, US outsourcing giants are not falling out of favor, but the value of the outsourcing pie has shrunk in size since 2004 as the value of individual transactions is generally getting smaller. The aggressive offshore vendors who remained hungriest for overall business growth via client satisfaction emerged as the top ranked this year.

Therefore, most of the major industry MNCs saw their market share falling marginally in 2005, allowing entry by the niche vendors who were exceedingly appreciated by clients voting this year. Even IBM witnessed a sharp decline in its growth rate, which translated into a drop in their ranking. Although the company signed more deals than any other vendor, the aggregate value was not enough to offset larger-scale wins by flexible and strategic up-and-coming vendors. A significant increase in the number of survey votes for these companies affected the shift in this year's Best Managed results.

After the initial frantic activity when outsourcers went at breakneck speed and signed contracts with vendors left, right, and center, the global outsourcing community has now realized that they need to tread more cautiously and avoid the mistakes of that initial phase. By the indications of this year's results, the offshore firms became most astute to that revelation.

Doug Brown and Scott Wilson : Offshore firms, particularly the Indian outsourcing vendors, by this years’ survey results, have the ability to immediately respond to marketplace needs or risk factors in great part to the cash piles that the initial outsourcing wave provided them. New technologies and acquisitions in new markets funded by the growth cash have given Indian and offshore firms some edge in meeting customer expectations.

Offshore firms have also capitalized on outsourcing deals which are getting shorter in length because customers are less willing to be tied into contracts for long periods. Increasingly, US and UK companies are becoming more open to the idea of letting the experts in India take care of their IT ecosystems and business processing.

Without the long contract lengths all vendors must engineer cost savings in a much shorter time period, while at the same time developing collaborative go-to-market strategies to win in large-scale multi-sourcing as have India's outsourcers recently.

The evolving outsourcing industry has also produced savvy outsourcing buyer organizations now looking at a more selective approach to outsourcing, usually preceded by a verification of the capabilities of the vendor.

Doug Brown and Scott Wilson : We have noted that Top 50 supplies like Equinox have long adopted a disciplined, standardized approach to BPO, while leaving room for innovation and flexibility. Integrated with results-driven applications and results-driven infrastructure, Business Process Outsourcing brings sustainable business transformation and that is where the leaders have established themselves.

We hear the slogan, "moving up the value chain" often in the context of BPO. BPO service providers typically use this to refer to the execution of other knowledge processes such as financial or legal research that gain them better revenues and margins…that is the cost advantage. However, we also frequently hear the phrase, "business transformation," usually used as a synonym for BPO that demonstrates cost savings and little more.

What's the key to gaining true value and business transformation? One approach is to move processes from a point of stable outsourcing to leaning to process redesign and ultimately, to process innovation.

As Equinox has moved up the value chain, CLIENTS have benefited in a number of ways:

First, they’ve seen the evolution from pure cost savings to process improvement. Process improvement adds to the cost savings or at least mitigates costs as and when they rise.

Second, clients can leverage process understanding and documentation. In many large organizations in the US and Europe, business processes have evolved over time. The latest documentation for the business process may not exist. BPO vendors like Equinox may insist on documenting the business process along with workflows, KPIs and SLAs for legal and contractual purposes. The very process of outsourcing makes many of these processes explicit. Moving up the value chain depends upon proper documentation of the business process.

Third, clients have seen a movement from informal to formal process measurements. Before outsourcing, there may not have been a compelling need to formally identify SLAs and KPIs for processes and measure them diligently. However, now that they're outsourced, informality leads to formality due to legal and contractual reasons. Process improvement can build on these measurements and result in better quality while identifying areas to reduce expense.

All reasons why process excellence is, in large part, what Equinox by virtue of being a Top 50 Best Managed Vendor provides process excellence to client organization.

But Equinox and other top performing BPOs have also benefited. Moving up the value chain in BPO benefits Equinox in a number of ways. Why should clients care? The success of the outsourcing engagement depends as much on the relationship the client establishes with their service provider as on the services performed by that provider.

First, it gets the vendors out from under the mode of competing on price. When a service provider adds value over and above simple costs savings with continuous process improvement, it removes that company from the fray of competing on price for contract extensions or other business processes. They become a partner that provides true business transformation. They can renegotiate contracts based on value additions with process improvement rather than a simple time and materials or full-time equivalents approach.

Second, Equinox has become a true business partner with clients. Moving up the value chain it provides a chance for a longer term relationship with clients. When a client outsources a technical help desk, the ideal isn't to handle those calls in the best possible way; it's to reduce those calls altogether while still keeping customer sat levels high. That kind of transformation, effected through focusing on better practices, can demand revenues in order of magnitude higher than simple process execution (because the client gains far greater benefit).

Third, Equinox has gained invaluable vertical skills development. When a BPO service provider moves up the claims processing value chain, they cease being just a service provider. Over time, they slowly become world-class experts in insurance, not just claims processing! They can leverage this expertise for much more valuable process design/redesign/innovation business, thereby continuing the cycle of continuous improvement.

Doug Brown and Scott Wilson : As we stated earlier, the book has sold tremendously well and we are thankful to those who have endorsed and circulated it.

As we work with our publishers to update the book in the coming year, we will be including much more vendor evaluation information that we’ve gathered in this our fourth year of intensive outsourcing supplier surveying. We are also developing an expanded directory of suppliers which will also include both statistical and outcome data as well as vendor-provided data, such as preferred contract size, number of employees, implementation information, mission, additional awards and related information to assist buyers in making the most informed buying decision possible.

The goal is to keep “The Black Book of Outsourcing” both the impartial producer of the annual ranking of Best Managed Vendors, as well as the outsourcing buyer resource on every decision-maker’s desk.