Global Sourcing in PO

The value proposition of Procurement Outsourcing (PO) is centered around spend-related savings and not labor arbitrage. Consequently, the degree of offshoring in PO contracts is only around 25% - less than half of the typical offshore component in other outsourcing markets like Finance & Accounting Outsourcing (FAO). However, more recently we are witnessing increasing levels of offshoring in PO contracts, as global sourcing has the potential to become a significant enabler for outsourcing procurement by providing additional levers for managing the operational costs. This report examines the key trends emerging in the offshore PO market.

Section I: Summary of key messages

Section II: Offshore adoption in PO

Summary

PO market size and growth

Offshore adoption across PO and FAO

Value creation levers for BPO

Offshore adoption in PO over time

Offshore adoption in PO by industry and geography

Drivers for offshore growth

Section III: Role of global sourcing in PO

Summary

Five-step roadmap to realize savings in PO

Procurement cost baselines

Managing the PO roadmap for savings across the outsourcing life cycle

Offshorability of procurement processes

Degree of offshoring by process scope

Emerging delivery model

Challenges in offshore adoption

Section IV: Offshore supplier landscape

Summary

PO supplier landscape

PO supplier market share

Offshore leverage by leading PO suppliers

Offshore location landscape

Section V: Implications for key stakeholders

Implications for buyers

Implications for suppliers

Appendix

Everest PO definition

Glossary of terms

References