1. Introduction
Definition: Sourcing & Procurement BPO
Sourcing & Procurement BPO:
Next Generation S&P BPO:
Next generation S&P services are part of the evolution of the traditional workplace to a ‘millenialized’ digital workplace
This project is focused on S&P services, with a particular emphasis on next generation sourcing strategies and ‘millenializing’ end-user tools. It covers:
2. Changing Shape of Next Generation S&P BPO
The current S&P market is still driven by the need to achieve cost savings and drive compliance….
Current S&P BPO market:
…with the future S&P market demanding a more ‘millenialized’ end-user experience and integrated market intelligence
Future S&P BPO market:
3. Customer Requirements
Organizations are looking to outsource S&P services to achieve cost savings, drive compliance and reduce risk…..
Achieve cost savings:
Drive compliance:
Reduce risk:
….while at the same time enabling partnerships with stakeholders, increasing productivity and improving the end-user experience
Enabling partnerships with stakeholder
Improve productivity:
Improved end-user experience:
Common issues with internal S&P functions are data & tools, processes and staff
Data & tools
Processes:
Staff:
Organizations are also seeking advisory and consulting skills for transition to next generation S&P services, access to ’millenialized’ tools, and innovation
Advisory and consulting capabilities:
Ability to provide requisite ’millenialized’ tools:
Innovation:
Support for future operating model design is a key client requirement alongside spend cost reduction
Clients working with vendors to adopt next generation S&P are realizing strategic sourcing & operational efficiency cost savings, increased compliance and greater spend visibility
4C Associates reduced costs for a Dutch retailer through procurement functional diagnostic, design and benchmarking
Objectives
Results
Accenture enhanced the sourcing capabilities and improved the profitability of a leading apparel solutions provider
Objectives
Results
Capgemini reduced costs for a Canadian distribution utility by taking over 530 roles including elements of procurement
Objectives
Results
Capita worked with the world's leading specialist insurance market services company to create a centralized procurement service
Objectives
Results
DXC Technology Capita drove eSourcing adoption for a global manufacturer, delivering 12% cost savings in year 1
Objectives
Results
Genpact brought in indirect category expertise for a U.S. based services company achieving ~$140m in savings
Objectives
Results
GEP worked with a global biopharma company to develop category plans and spot buying programs achieving cost savings of ~10%
Objectives
Results
HCL supported the procurement function of a U.S. based fire & security products company in achieving cost savings of 29%
Objectives
Results
Infosys assisted the procurement function of a global hospitality and hotel group in achieving ~$5m annualized cost savings
Objectives
Results
IBM increased e-invoicing to 75% for a global consumer goods company
Objectives
Results
Proactis assisted a large multinational restaurant chain in increasing the number of sourcing projects and achieving ~$0m in savings
Objectives
Results
Proxima Group embedded a procurement team within a greenfield site for a financial services company
Objectives
Results
TCS implemented a customized S2P platform for a Japanese multinational electronics corporation moving 60% of spend to catalogs
Objectives
Results
Wipro assisted North America based relocation services company in developing new procurement processes achieving 25% productivity improvement
Objectives
Results
WNS-Denali supported a specialty material manufacturer in establishing procurement & sourcing service centers achieving cost savings of $200m over 2 years
Objectives
Results
4. Market Size and Forecast
Global S&P BPO market will approach $3.6bn by 2022, with a CAGR of 7.1%
S&P BPO will continue to be broadly based across advisory & managed services, sourcing support, & procurement transactions
Growth in S&P BPO services is being driven by a few factors
Service areas:
North America and EMEA currently account for 85% of the S&P BPO market but with market growth across all regions
Financial services and life sciences & healthcare will see the highest growth in S&P BPO services, through to 2022
5. Vendor Market Shares
The global S&P BPO services market is led by Accenture, IBM and GEP, followed by Genpact, Infosys, TCS, Proxima and Wipro….
….challenged by Capita, Aquanima, Corbus, Cognizant, HCL, 4C, WNS-Denali and Capgemini
The U.S. S&P BPO market is led by Accenture and IBM followed by GEP, Genpact, TCS, Wipro, Infosys and Corbus….
….followed by Proxima, Cognizant, HCL, WNS-Denali and Aquanima
The EMEA market is led by Accenture, challenged by IBM and GEP, then Proxima, Genpact, Capita, 4C and Wipro….
….followed by Infosys, Aquanima, TCS, Cognizant, Capgemini and Corbus
The APAC market is dominated by Accenture, IBM and Infosys
S&P BPO activity in LATAM is currently small scale, led by GEP, Aquanima and TCS
6. Vendor Offerings
Next generation S&P contract pricing models are typically based on five models
…..through sourcing support services including category, contract,
Sourcing support function includes these processes:
…..to procurement transaction processing services ranging from PR processing to supplier master data management
Procurement transaction processing function includes these processes:
7. Delivery in Next Generation S&P
79% of S&P BPO delivery personnel are based offshore, predominantly in India ….
….though a few vendors with a lower transactional emphasis retain delivery largely onshore….
…. with category management & strategic sourcing services largely delivered from onshore
S&P vendors’ global delivery locations are very heavily concentrated in India…..
…..with N.Y. tri-state and Chicago as primary U.S. locations
Vendors operate a tool box of proprietary and external tools and frameworks to deliver S&P services
Vendors have well established proprietary tools for a range of S&P services
The use of RPA, AI and cognitive learning is being used today by some vendors to automate S&P services
RPA & Auto-bots are being used to:
AI is being used for:
Cognitive learning is being applied to:
8. Challenges and Success Factors
Key vendor selection criteria are the ability to transform S&P, deliver cost savings, optimize processes, and ‘millenialize’ the end-user experience…
Ability to deliver procurement transformation and sourcing consulting projects:
Ability to implement cost savings programs:
Ability to provide S&P process optimization:
Ability to achieve customer experience optimization:
…while the biggest challenges for S&P services vendors are the lack of executive buy-in for transformational projects, and maintaining clean, up-to-date spend data to support analytics
Challenges:
The main success factors for S&P service vendors are the capability to deliver cost savings while enhancing the customer experience
Appendix I
Vendors researched for analysis