Table 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