Tag: PO

Accenture + Procurian = a Hard to Beat Procurement Outsourcing Capability | Sherpas in Blue Shirts

When Accenture completes its acquisition of Procurian, (announced October 3, 2013, and expected to close by end of 2013), the firm will hold a formidable one-third of the procurement outsourcing (PO) outsourcing marketplace.

For non-regular followers of the PO space, Procurian was incepted in 2000 per its own acquisition of Accenture’s ePValue e-procurement venture. The somewhat latent PO market finally found its footing, with a US$1.7 billion and a five-year CAGR of 13 percent in 2013.

While the PO marketplace has become increasingly competitive in the past several years, as evidenced by numerous acquisitions by Xchanging, IBM, Infosys, and GEP, Accenture’s acquisition of Procurian represents a game changer in the PO space, and has far-reaching implications for providers and buyers alike.

The new dynamics in PO?

• IBM and Genpact will be impacted, as IBM will no longer be the number one provider of PO providers, and Genpact will lose footing in its strategic partnerships via Procurian relationships with clients such as Zurich, Hertz, and Kimberly Clarke
• The PO market will become more concentrated with the two top players – Accenture + Procurian and IBM – accounting for nearly 60 percent of the PO market.

Bottom line, given the combined capabilities of Accenture and its come-back-home compatriot Procurian, this new PO powerhouse should make other global service providers step back and think about their PO service capabilities.

For more details on the Accenture/Procurian acquisition, and Everest Group’s insights on it, please go to: Accenture + Procurian = One-Third of the Procurement Outsourcing Market viewpoint.