The latest trend is for many of these same firms to rein it in a bit, focus inward and invest in building their respective platforms. Whether it's adding additional resources to their transition teams, or building stronger bench strength, or improving upon earlier initiatives and truly deliver a functional and beneficial client dashboard, each of the major providers is looking inward to deliver the CRE client what they hope to prove is a stronger, more robust platform that that of their competition. Some are building more innovation and thought leadership into their repertoire, other are focusing on improving the level and application of consulting services, and supporting clients' relationship management initiatives, but almost all are redoubling their efforts in 2006 to develop better and more targeted marketing strategies to win a greater share of business. They all want to create a new perception in the marketplace about outsourcing. The perception is of a one-stop-shop that is consultative in nature, supremely effective in execution, and like the Visa tag line--everywhere you want to be!

Is it the right thing to do? Yes, but only 50% right. Let me explain.

In my view, at the end of 2006 the industry will likely have a new and improved set of the same lineup of top players. Granted they will have all gotten better at their game over the year, but will it make a difference? After all, as I've said in this column before, all major service provider firms have difficulty communicating a unique and differentiated value to clients. I don't know the extent to which that will change. What can one say that another can't--even if they're stretching the truth?

Most providers tout their prowess in providing integrated services. But my guess is 50% of outsourcing clients want integrated services on a smaller scale than these service provider can or will deliver.

The top three or four service providers can all boast a wide geographical range for delivery of services. But, my guess is 50% of the target market clients require a presence in mostly major metro areas.

Most clients say they want an integrated technology platform but only 50% can either afford it or use it.

To fill in the other 50% of the picture, each major service provider needs to spend time in 2006 defining, communicating and delivering a message of executive level commitment to service delivery and relationship building. I know that many of the smaller, niche service providers are spending 100% of their time focused on this specific piece of the picture.

What does that mean for the majors? In my view, two things: either they will have to be happy competing with each other for their share of half the potential market or they will have to re-tool their inward investments and business strategy to focus on the mid-cap market for real estate services. The threat is that while the major service providers are wondering what to do, the rest of the competition has started doing it.

Vik Bangia (vik.bangia@cbre.com) is a managing director in CB Richard Ellis' global corporate services organization. Views expressed here are the author's solely.

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Service Providers Are 50% Right

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