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Benefits of Consolidating IT Advisory

in the past 1-2 years we have seen some intense IT advisory consolidation, plenty of the bigger traditional players have acquired smaller sourcing advisory businesses. The Information Services Group (ISG), which already owns sourcing consultant TPI, acquired IT benchmarking specialist Compass. Similarly, KPMG bought Equaterra. According to Lee Ayling of KPMG, all this consolidation gives the scale, that smaller specialist needs to support its customer base and all this will eventually benefit the customer. Smaller firms lack capacity in running big projects because they have fewer advisors in each field. By consolidation the same company can provide more services. There are however concerns that acquisition will damper the quality of service. But these concerns were downplayed by studies conducted by Warwick Business School fellow, Llan Oshri. According to him the main driver behind these acquisitions is to add line of services and not to take out competition. Secondly, sophisticated users should benefit from a service provider which can offer a wide range of services,". On the other hand consolidation is highly beneficial for only big companies with sophisticated outsourcing teams . Smaller companies will suffer as a result of less choice and potentially higher prices.

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