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Procurement Outsourcing (PO) – Service Provider Landscape with PEAK Matrix™ Assessment 2013
The global multi-process Procurement Outsourcing (PO) market witnessed healthy growth of 11% in 2012. Organic growth emerged as a major driver, contributing around 60% to the increase in market size. With rise in maturity, the competitive intensity is also increasing. Beyond new book of business, service providers are focusing on expanding the existing client relationships and providing value-added services around Low Cost Country Sourcing (LCCS), direct spend management, and tail-end spend management. BPaaS and analytics are playing a more invasive role in PO services than ever before. The definition and scope of PO services is also expanding into downstream F&A and adjacent supply chain activities.
In this research, we analyze the global PO service provider landscape in 2012. We focus on:
- Relative position of 20+ service providers on Everest Group PEAK Matrix for PO
- 2013 PO Star Performers
- Service provider delivery capability assessment
- Emerging service provider investment themes
- Implication for buyers and service providers
Scope and methodology
- Third-party PO deals; it does not include shared services or Global In-house Centers (GICs)
- Over 390 multi-process PO deals signed as of 2012, with a minimum of three procurement processes over US$1 million in ACV and a minimum contract term of three years. Typically, managed spend is greater than US$50 million
- Coverage across 20+ PO service providers with multi-process capability, including Accenture, Aegis, Aquanima, Capgemini, Corbus, DSSI, Genpact, GEP, HCL, HCMWorks, HP, IBM, Infosys, Optimum Procurement, Procurian, Proxima, TCS, Wipro, WNS, Xchanging, and Xerox
This report examines the dynamics of the global PO service provider landscape and its impact on the PO market. In this report, based on comprehensive Everest Group PEAK Matrix, each of the 20+ PO service providers are categorized into Leaders, Major Contenders, and Emerging Players. In addition, 2013 PO Star Performers are selected based on their top-quartile performance in market success and delivery capability enhancement. This report also provides detailed analysis on market success and PO delivery capability (across scale, scope, technology, delivery footprint, and buyer satisfaction dimensions) for service provider categories. Additionally, it provides details of the various areas in which service providers are investing to stand out in the crowded PO market.
Some of the findings of this report are:
- Based on Everest Group’s comprehensive evaluation framework, PEAK Matrix, the 20+ established PO service providers evaluated are segmented into three categories – Leaders, Major Contenders, and Emerging Players
- We assessed the overall PO capability of service providers by evaluating them along six dimensions – 2012 market success and wins, scale, scope, technology, delivery footprint, and buyer satisfaction levels
- Leaders continue to maintain lead over other service providers across each dimension
- Everest Group identified six service providers as the “2013 PO Market Star Performers” based on the relative year-on-year movement of each service provider on the PEAK Matrix
- The 2013 PO Market Star Performers accounted for over 80% of the TCV signed in 2012 and over 60% of the contracts renewed/extended in 2012