latest market analysis
in Procurement Outsourcing:
Next Generation Sourcing & Procurement
Jul 11, 2018 | Market Analysis by Janet Irwin
NelsonHall's market analysis of Sourcing & Procurement BPO consists of 65 pages. [...]browse all market analysesview this reportdownload abstractTable of contents:
- 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
NEAT analysis:
Sourcing & Procurement BPS
Published on: August 29, 2018 by Janet IrwinLatest Procurement Outsourcing Market Forecast
Global Procurement BPS Market Forecast: 2015 - 2019
Nov 27, 2015 | Market Forecast by Rachael Stormonth
NelsonHall's "Global Procurement BPS Market Forecast: 2015-2019" consists of 14 pages. It is a comprehensive forecast of the procurement BPS market and is complemented by NelsonHall's self-service forecasting facility which enables users to download forecasts and vendor shares tailored to their needs across any combination 40 geog [...]view this reportdownload abstract
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