Introduction

The Procurement Outsourcing (PO) market has the potential to become the "game-changer" in BPO. It has started to gain traction, although it has yet to emerge with full momentum. This report examines the global 2005 PO market and provides insights, detailed analyses and implications for stakeholders. The research segments and analyzes the PO market from multiple dimensions, including market size, buyer adoption and influence factors, transaction mechanics, supplier capabilities and market position, and comparison with other BPOs. This report will assist both companies considering outsourcing procurement to a third-party and suppliers of PO services to understand in detail the market dynamics and value proposition for PO.

Scope

• Third-party PO contracts and does not include shared services or captives
• Multi-process PO contracts that involves outsourcing of three or more activities from the Source-to-Pay (S2P) process with at least one activity each from Sourcing and Procure-to-Pay (P2P), addresses at least US$150 million of managed spend, and has a contract length of at least three years
• All multi-process PO contracts across all industries and geographies signed as of September 2005
• Suppliers with multi-process PO capability including Accenture, Ariba, Capgemini, Corbus, EDS, HP, IBM, ICG Commerce, Vertex, and Xchanging
  

Contents

This report summarizes key market trends and insights to assist management in making more informed business decisions. Key Insights are divided into four categories: Market overview and trends; buyers, influence factors and transaction mechanics; supplier capability and market position; and PO in comparison with other BPOs. Each category contains 3-5 key trends, which are discussed in detail (and illustrated with supporting data and analysis) to provide the reader information in easy-to-apply, bite-size pieces. For example, market overview and trends is sub-divided into the following:

• Market evolution including level of market maturity, overall size and growth and value proposition
• Transaction characteristics including contract size and buyer segments
• Technology evolution and market shares of technology vendors