with the firm's executive team.
Even with the economy in the dumps, it's a great time to be at Insight Sourcing Group. Actually, that economy's one of the big reasons it is a great time to be at the firm. "We're a boutique management consulting firm and, we specialize in strategic sourcing and procurement-related cost reduction or procurement-related services. Our core product is cost reduction or savings through renegotiating contracts," explains Tom Beaty, founder, president and CEO of the Atlanta area firm.
At a time when saving money is the trend du jour, firms are thrilled to find ways to leverage their buying power and eliminate unnecessary spend."Because our end product is cost reduction, we've actually gotten popular," Beaty says. "And we've gotten a lot of interest from a lot of clients who I think in the past wouldn't have been interested in working with us. But now they're really interested in working with us. And as quickly as possible."
One area of particular client interest, according to Beaty, is the recent addition of an office good consortium. "Essentially, probably anywhere from 30 to 80 percent of any company's revenue is spent on stuff, on materials and services." ISG, Beaty says, serves what he calls the "upper end of the midmarket," companies of nearly every sector who range in size from about $100 million to $5 billion in revenues. "We've got a great client list, they're all name brands," he says, adding that what's great about these firms is that bureaucracy and red tape are in shorter supply there than at most large multinationals.
However, the firm's senior staff all come from those large multinationals—Deloitte, A.T. Kearney, KPMG and similar firms, Beaty says. But ISG, as opposed to those companies, offers a low-travel alternative. "Part of the premise behind the firm was how do you replicate that great work and the great culture that you find at some of the larger firms, in a smaller firm and without the travel?" And Beaty thinks he has found the answer with ISG.
In an industry where data is king, Beaty and his team of 22 consultants are royal subjects. "I really wanted a firm that focused on measureable results [where] we could truly measure return on investment based on the fees that we're paid. A lot of the work that we do in strategic sourcing is highly measurable, in terms of outcome." Data diving is easy when the numbers are favorable, of course: "So we actually track our client ROI on an annual basis and recently it was over 500 percent in the first year."
Other key data points: Clients are usually paid back in cost-reduction efforts within two to five months; clients see an average 10 to 30 percent EBITDA impact by driving down the costs of materials and services; and ISG has had a 100 percent positive ROI since inception.
And while the numbers speak for themselves, Beaty is happy to speak about the kind of culture he says drives success for the firm, whose core values include focus on client results, excellence in execution and integrity. In addition, ISG is driven by entrepreneurial spirit. "There are people who come here not because they want to do strategic sourcing consulting, but because they want to do consulting and they want to help grow a business and build a great business. The other thing is we're self funded and don't have any debt, so it really is entrepreneurial; we're not one of those firms that took on a bunch of capital and are beholden to outside investors. I'm the original founder and majority owner, but we share the leadership and distribute that out so people have the ability to really understand what's going on."
Beaty says his hiring estimates for the year may have to reflect the reality of the economy, but he's still optimistic about bringing his total number of consultants to 27 by year's end. "You never know; things could take off and we'd add more," Beaty says, adding that the firm also may expand operations to somewhere like Chicago. "We don't really have a multi-office strategy. We're more about getting the right people."
—Jacqueline Durett
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