Clemente Comm. (VII N54) - 9 December 2009

Forty-five percent of U.S. middle-market companies say the process of "strategic diversification" is a main driver for retaining consultants and other professional services firms, according to the findings of a recent study by Clemente Communications.

Middle-market companies are seeking the assistance of outside advisors to help execute significant changes to their business models to survive in the near-tem, and to reposition themselves for growth when the economy turns around. The study, Consulting & Professional Services Firm Hiring by U.S. Middle-Market Companies, is based on information from C-level executives at approximately 250 client organizations.

The 80-page report provides insights on purchasing trends and decision-making criteria of corporate buyers of professional services in the areas of management consulting; marketing and communication services; accounting; law; and information technology. Monadnock Research finds that most of the report's findings are extremely relevant for global organizations and the large firms serving them as well.

Notable study findings include:

• Corporate executives are turning to outside advisors to overcome challenges related to creating and commercializing new products. More than 36 percent rank complications in R&D/new product development as a primary concern, and nearly 33 percent voice fear about delays in new product launches.

• Professional service providers' projections of ROI, knowledge of key industry trends, and competitive intelligence are three of the most important pieces of information buyers look for in assessing firm proposals.

• Purchasing executives will increase the number of prospective services firms before making engagement decisions. In comparison to their policies in years past, only 16 percent of respondents expect to review one or two prospective providers. More than 72 percent plan to evaluate three or more potential firms before selecting one.

According to Mark Clemente, CEO of Clemente Communications, "The moribund economy is affecting every aspect of business decision-making today. This national study identifies the specific 'pain points' of middle-market companies -- the issues that are impacting those organizations' decisions regarding the consultants and other outside advisors they're hiring to cope with crucial management challenges."

Other key areas of analysis in the study include:

• Why professional services buyers are buying, including detailed information on the strategic challenges and market forces driving needs to hire professional services firms.

• In what areas buyers are earmarking funds for advisory services support, now and in the near-term.

• The service capabilities and technical skills companies are seeking, relative to past requirements.

• Why sourcing and procurement organizations are terminating or redeploying existing service providers.

• Skills, capabilities, and traits buyers seek from consultancies.

• Information buyers expect in written proposals and in-person presentations that influences engagement decisions.

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