Are some outsourcing advisors too cozy with vendors?

Phil Fersht, an outsourcing analyst at AMR Research, has an interesting blog post in which he wonders aloud: Are third-party outsourcing advisory firms too cozy with certain outsourcing vendors?

The advisory firms (the major firms are mentioned here) are supposed to provide unbiased advice to CIOs to help them make the right decision about which outsourcing vendor to use and how to structure the deal.

AMR's research found that, of 114 advisors surveyed, "almost half of them revealed they frequently get business through their relationships with vendors. We always knew that vendors refer advisors in certain client instances, but not to this extent," Ferscht says. Further quoting Ferscht:

[W]hen you hear about some of the cosy industry relationships where one vendor is always referring the same advisor, you have to pause for breath and think "is this crossing the line between educating a client and overly-influencing a client?".  

AMR's study found that there's a "love-hate relationship between providers and sourcing advisories, in some cases, and an unholy nexus in others."

Equally interesting are the comments about the blog post. Here are some selected, verbatim comments:

"Buyers need to know what they are getting into when they get advisor referrals -- seems to be far too much collusion going on in the industry these days."

"The advisors should give an unbiased advise to their clients. The client should not approach the vendor to refer an advisor."

"This data reveals that there is clearly too much quid-pro-quo activity in the industry right now between some particular vendors and advisors (I emphasize the word "some" here). Clients have to be more vigilant to understand what is going on -- these types of business relationships are becoming more common in today's corporate climate...."

"Buyers should ask their advisor if they have ever taken money from the vendor. Ideally, the answer will always be no, but if it is [yes], then a lot more questions need to be asked before determining whether there truly is a lack of bias."

So this is a classic case of caveat emptor. CIOs should ask probing questions to find out whether their outsourcing advisory firm gets any sort of kickback or preferential treatment from outsourcing vendors.

The obvious goal is to get unbiased advice that meets the client's needs.

Call me naive, but it sounds backwards for the CIO to ask the vendor to select the advisory firm -- seems like the CIO should pick the advisory firm first, independently, and then pick a vendor.

What do you think?