Recognizes Significant Changes in the Strategic Use of Sourcing

HOUSTON, November 15, 2006 —Early this decade, many of the large companies that had enjoyed the benefits of early adoption of outsourcing aspects of their information technology (IT) departments began to look for new opportunities. Today’s sourcing operating models for essential corporate services, including functions beyond IT, are much more varied, dynamic — and more challenging.

Large enterprises are looking to optimize their business operations — including finance, procurement, accounting and even human resources — through the best combination of insourcing, offshoring, shared services and outsourcing, according to TPI, a leading sourcing advisory firm that today is relaunching its brand to reflect its evolvement along with that of the overall marketplace.

“The strategies that have emerged are powerful – for the adopting organization and the marketplace,” says Peter Allen, partner and managing director for Market Development at TPI. “Organizations across all industries are compelled to realign the services that make business more productive, taking advantage of the best practices, third-party expertise and emerging geographies, all of which are defining the future business environment.”

The stakes are high for everyone. While recent studies suggest that the largest companies as a group stand to save billions of dollars from sourcing solutions over the course of the next decade, sourcing has become much more than just a cost-saving tool. It has become a force for true corporate change. It has also come to represent multi-faceted portfolios of delivery resources.

“Sourcing has become multi-dimensional, meaning much more than outsourcing. Senior management looks for new service delivery models when they conclude that the existing organization isn’t capable of delivering the necessary value related to the business strategy on their own,” Mr. Allen wrote in his new blog, “Consider the Source” (www.considerthesourceblog.com). “It’s not about squeezing the working class; it’s about competing in a global economy.” The internal option, however, is always part of the solution – but with changing responsibilities in the enterprise.

Future Industry Trends Based on TPI’s insights and knowledge:

• Offshoring: Labor Arbitrage Replaced By Value: Enterprises will instead focus on sourcing strategies that enable access to top talent anywhere, facilitates strong governance and change management, and delivers innovation over time. Value is measured differently over time and across various points of context, but it always entails competitive acceleration.
• Multi-Sourcing Models On The Rise: Buyers will blend insourced and outsourced providers. Variants will exist across functions and geographies. Flexibility will be balanced by service integrity and access to human capital.
• Brazil, China, Eastern Europe, Mexico, Malaysia, and Philippines Will Compete for Market Share With India: Duplicating India’s example as contenders, enterprises will seek to leverage skilled resources from multiple destinations. India will continue to dominate, but other locations will participate in the global rising tide. While wages will rise across the board, productivity will come to the fore as the competitive differentiator.
• Service Providers Will Likely Consolidate Into Two Predominant Groupings: Transaction Processors and Business Transformation Practitioners. With a polarization round the degree to which outsourced solutions are commodity in nature, versus those that deliver value through customized productivity, many service providers will adopt greater vertical industry orientation. Contract terms will evolve to reflect the multi-year sourcing strategies of enterprise buyers.

The company’s new corporate Web site, logo, and collateral materials parallel TPI’s commitment to helping companies navigate and anticipate challenges in the sourcing process and are united under the theme, “knowledge powering results” to reflect its core strengths in deep industry knowledge, expertise and measurable results for clients. Additionally, today the company has launched a new corporate blog as an extension of its industry knowledge and experience-based observations.

About TPI

TPI is the sourcing advisory industry founder, and the largest advisory firm in the world focused on a broad range of business support functions and related research methodologies. Applying deep functional domain expertise of accomplished industry experts who possess extensive practical experience, TPI collaboratively works with organizations to help them optimize their business operations through the best combination of insourcing, offshoring, shared services and outsourcing. For additional information, visit www.tpi.net.