Procurement Outsourcing - The Next Major BPO Growth Area? (Strategic Focus)

Date: October 1, 2009
Pages: 31
Price:
US$ 3,395.00
Publisher: Datamonitor
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: P3D7C50ABCEEN
Leaflet:

Download PDF Leaflet

Procurement Outsourcing - The Next Major BPO Growth Area? (Strategic Focus)
Introduction

Procurement outsourcing is the smallest of the horizontal business process outsourcing (BPO) functions, but many industry experts believe 2009 will mark the start of a significant period of expansion in the market. This report analyzes the evidence used to support these claims and attempts to separate the hype from the reality.

Scope

*This report looks at the prospects for future growth in the procurement outsourcing market.

*It defines the procurement outsourcing market, with particular focus on key functions such as sourcing, purchasing and payments.

*The report provides in-depth analysis of the market's competitive landscape, from global outsourcing giants to specialist providers.

*It also offers recommendations to vendors looking to take advantage of the growth potential of procurement outsourcing.

Highlights

At various points over the last 10 years, BPO industry experts have predicted an explosion of procurement outsourcing activity, but the expected boom has yet to happen. That has not deterred market-watchers from forecasting that 2009 will be the beginning of a period of rapid expansion in the procurement outsourcing market.

Procurement outsourcing does not rely on labor arbitrage to deliver cost savings. As procurement is not a labor-intensive process, vendors have to use other methods to deliver savings, including improving both internal processes and the management of supplier relationships and innovating around technology and processes.

The procurement outsourcing market has a unique competitive landscape. It is dominated by four market-leading vendors, including two outsourcing giants (IBM and Accenture) and two procurement specialists (ICG Commerce and Ariba).

Reasons to Purchase

*Provides a detailed analysis of the current state of the procurement outsourcing market.

*Gives a detailed overview of the market's unique competitive landscape.

*Offers recommendations to vendors looking to grow their presence in the procurement outsourcing market.

OVERVIEW

Catalyst
Summary
Key Messages
Growth expectations for the procurement outsourcing market are high
Procurement outsourcing does not rely on labor arbitrage to deliver cost savings
The procurement function is made up of three key processes
The procurement outsourcing market is dominated by four vendors
Most vendors aim to offer clients an end-to-end service
Table of Contents
Table of figures
Table of tables
Market Opportunity
Growth expectations for the procurement outsourcing market are high
Is the procurement outsourcing market expanding?
Defining procurement outsourcing
The differences between direct and indirect spending
Why is indirect spending more commonly outsourced than direct spending?
Procurement outsourcers operate across vertical markets
Most procurement outsourcing vendors target large organizations
The US is by far the largest geographic market for procurement outsourcing
Customer Impact
Procurement outsourcing does not rely on labor arbitrage to deliver cost savings
The procurement function is made up of three key processes
Sourcing
Purchasing
Payment
Clients are wary of committing to end-to-end procurement outsourcing
Many clients are currently focused on short-term objectives
Competitive Landscape
The procurement outsourcing market is dominated by four vendors
The market leaders
IBM Procurement Services
Accenture Procurement BPO Services
ICG Commerce
Ariba
The other vendors in the market can be divided into two broad categories
Vendors with a sourcing background
Vendors with a transactional process background
Global IT services providers
Offshore outsourcers
Indian BPO vendors
Go to Market
Most vendors aim to offer clients an end-to-end service
It will be difficult for new vendors to establish themselves in the market
Significant barriers to entry exist
New technology continues to change how procurement services are delivered
Recommendations
Focus on core competencies
Explore the opportunities available for partnerships
Develop a multi-shore delivery model
Maintain the focus on large enterprises

APPENDIX

Methodology
Further reading
Ask the analyst
Datamonitor consulting
Disclaimer

LIST OF TABLES

Table 1: Details of 10 large procurement outsourcing end-users
Table 2: Examples of recent partnerships in the procurement outsourcing market

LIST OF FIGURES

Figure 1: Market sizes of BPO functions, 2008 ($ billion)
Figure 2: If you are engaged in BPO contracts, which functions do they cover?
Figure 3: Number of procurement outsourcing contracts announced, 2004 - August 31 2009
Figure 4: Total number of BPO contracts announced, 2004 - August 31 2009
Figure 5: Breakdown of procurement outsourcing contracts by signing region
Figure 6: Rate the importance of the following factors in your decision to enter into a BPO contract (1 - Least Important; 4 - Most Important)
Figure 7: Vendor share of the procurement market by total contract value and number of contracts signed

Ask Your Question

Procurement Outsourcing - The Next Major BPO Growth Area? (Strategic Focus)
Company name*:
Contact person*:
Phone/fax*:
Email*:
Request invoice
Your enquiry: