Introduction

The global multi-process Procurement Outsourcing (PO) market witnessed robust growth of 12% in 2013. Both inorganic and organic factors contributed equally to the growth with a record number of new deal signings. The PO service provider landscape is evolving, as players continually enhance their capabilities to grab new opportunities. They are focussing on various innovative strategies to create differentiation in an increasingly competitive market. Numerous themes have emerged against this backdrop, such as, focus on Mergers and Acquisitions (M&A) to gain competitive edge, pursuit of opportunities in HRO+PO overlap, and technological advancements in cloud and mobility.

In this research, we analyze the PO service provider landscape across various dimensions:

• PO service provider landscape overview
• 2014 PO PEAK Matrix and Star Performers
• Service provider delivery capability assessment
• Emerging service provider trends

Scope of analysis

• Third-party PO deals; it does not include shared services or Global In-house Centers (GICs)
• Over 900 multi-process PO deals signed as of 2013, with a minimum of three procurement processes over US$1 million in ACV and a minimum contract term of three years. Typically, managed spend is greater than US$50 million
• Coverage across 19 PO service providers with multi-process capability, including Accenture, Aegis, Aquanima, Capgemini, Corbus, Genpact, GEP, HCL, HCMWorks, HP, IBM, Infosys, Optimum Procurement, Proxima, TCS, Tech Mahindra, Wipro, WNS, and Xchanging
• Global survey and one-on-one executive-level buyer interviews to understand how organizations perceive their PO engagements

Content

This report examines the global PO service provider landscape and its impact on the PO market. It focuses on service provider position and growth in the PO market, changing market dynamics & emerging service provider trends, and assessment of service provider delivery capabilities.

• PO Service Provider Landscape overview
• The service provider landscape of PO is top-heavy, with 80% share dominated by the top six providers
• Accenture and IBM alone account for over 50% of the market. After acquiring Procurian, Accenture has the highest share in the market
• GEP, Xchanging, and Infosys trail the global majors and provide stiff competition. Their combined share increased from 14% in 2011 to 20% in 2013
• 2014 PO PEAK Matrix and Star Performers
• Everest Group classifies 19 PO service providers on the Everest Group’s proprietary PEAK Matrix framework into:
• Leaders: Accenture, GEP, IBM, Infosys, and Xchanging
• Major Contenders: Aegis, Aquanima, Capgemini, Corbus, Genpact, HCMWorks, HP, Proxima, TCS, Tech Mahindra, Wipro, and WNS
• Emerging Players: HCL and Optimum Procurement
• Based on YoY movement of different service providers on the PEAK Matrix, Everest Group identified five service providers as the “2014 PO Market Star Performers” – Accenture, GEP, HCMWorks, Infosys, and Xchanging
• Service provider delivery capability assessment
• We assessed the overall PO capability of service providers by evaluating them along six dimensions – market success, scale, scope, technology, delivery footprint, and buyer satisfaction levels
• Leaders outperform other players across nearly all the metrics assessed. They are further consolidating their position in the PO space
• Major Contenders, who also happen to be competing with Leaders at a certain level, are also bearing the brunt of the heightened competition. They are steadily ramping up their capabilities or improvising strategies to remain competitive in the arena
• Emerging service provider trends
• Evolving market strategies, focus on M&A/partnerships, pursuing PO+HRO opportunities, advancements in cloud and mobility, and focused technological investments are some of the emerging service provider trends

Everest Group has a complimentary four-page PEAK Matrix preview document for this service provider landscape report.