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

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1 Brochure More information from Procurement Outsourcing - The Next Major BPO Growth Area? (Strategic Focus) Description: 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 of this title 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 marketleading vendors, including two outsourcing giants (IBM and Accenture) and two procurement specialists (ICG Commerce and Ariba). Key reasons to purchase this title - 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. 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

2 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 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, August

3 Figure 4: Total number of BPO contracts announced, August 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 Ordering: Order Online - Order by Fax - using the form below Order by Post - print the order form below and send to Research and Markets, Guinness Centre, Taylors Lane, Dublin 8,

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