Product Type: Market Research Report
Published by: Datamonitor
Published: October 2009
Product Code: R313-55032Description 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.
Table of Contents - 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
|
|
