The primary reasons that organizations cite for using tier two providers are:

• Lower rates
• Flexibility in responding to client needs and terms
• Better, more personal attention
• Niche capabilities

All good reasons and often true. But client and service provider expectations can be at odds, and clients need to do their homework when looking for tier two partners to complement or even replace their tier one suppliers. For instance, more than a few organizations have learned that low billing rates do not necessarily translate into lower overall costs. Experience, productivity, and getting it right the first time figure heavily into the real cost of a project. So when looking at rates, clients need to carefully assess overall work quality as well as transparency in project execution and billing.

Flexibility too has its pitfalls notes Apte. Tier two suppliers looking to please clients and grow their business can be tempted to accept work that is outside their expertise or comfort zone. In doing so they get pulled away from what they do well and can wind up building a new practice on the backs of one or two clients. The result can be substandard work and/or cost overruns.

Finding the perfect fit

The most important thing to look for in a tier two supplier, says Apte, is a unique value proposition. Choosing a technology or industry specialist, or even a service line specialist, is relatively straight forward. The most difficult specialty to evaluate is arguably the most valuable — a customer experience specialist. Firms in this category offer a responsive experience and go the extra mile to delight clients with:

• A flexible engagement model
• Client-friendly style
• Transparent pricing
• Top management involvement

This is precisely Coherent Solutions' value proposition. With a dedicated delivery management team here in the U.S., top-notch software development in Eastern Europe, and transparency throughout the project lifecycle we have created the rare organization that can deliver custom software economically, efficiently, and with complete satisfaction. But as Apte suggests in his article, it is difficult to evaluate the soft skills that make firms like Coherent Solutions unique. Click here to read about our successful relationships in our clients' own words.

¹ Why Do you Need Tier Two Providers? (And You Do Need Them!), Understanding The Specialization Value Tier Two Providers Can Offer by Sudin Apte, with Andrew Parker and Phillipp Karcher. September 8, 2009, Forrester Research, Inc.