Number and scope of deals, geographic footprint, FTE – all on the rise in PO industry
DALLAS, JUNE 26, 2014 — The global multi-process Procurement Outsourcing (PO) market registered strong growth of 12 percent in 2013 with record number of new deal signings. End-to-end procurement process outsourcing tripled in share in the last three years, and PO is strengthening its foothold in the emerging markets of Asia Pacific, Middle East and Africa, and Latin America.
While the value proposition of PO remains primarily driven by cost and spend reductions, new themes such as category expertise, access to technology, and integrated governance are emerging and positively shaping the market. Collaboration between procurement and other enterprise functions is also driving growth. For example, nearly 75 percent of procurement contracts had human resource-related categories in 2013, compared to 67 percent previously.
These findings and more are discussed in a new Everest Group report, Procurement Outsourcing – Annual Report 2014: Expanding New Horizons.
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“The lion’s share of trends we see in the Procurement Outsourcing market are strongly positive,” said Abhishek Menon, practice director at Everest Group. “The industry’s compounded annual growth rate is about 18 percent from 2006 to 2013, and the number of new deals signed each year has more than doubled in that same timeframe. Contract extensions and renewals are running at a strong clip, and we’re seeing exploding populations in PO delivery centers, with FTE increases in some regions of 75 to 95 percent. Procurement outsourcing makes an attractive business case for both buyers and service providers who have remained disciplined, vigilant and progressive.”
Download Publication-Quality Graphics High-resolution graphics illustrating the report’s key takeaways can be included in news coverage, with attribution to Everest Group. Graphics include:
- Procurement Outsourcing’s growth path
- Procurement Outsourcing: good news/bad news
- Population explosion: Global PO delivery center FTE count grows 35 percent in one year
- Accenture and IBM continue to dominate the PO market.