Traditionally, offshoring in procurement function was limited as labor arbitrage was not a key value creation lever. However, over the recent years, adoption of the offshore in-house model for delivery of procurement services has gained acceptance and this is driven by factors invoking both pull and push forces.

The Global In-house Center (GIC) market for delivery of procurement services is still nascent with a share of less than 5% in the overall GIC market (in FTEs).The market has evolved and continues to witness increasing penetration of transactional Procure-to-Pay (P2P) processes, improved collaboration with the F&A accounts payable function, and significant process ownership and management of spend across multiple, non-core spend categories.

This market has grown consistently, although there are differences in achievement of procurement process maturity across GICs of different industry verticals. Additionally, there is differentiation amongst GICs across the key operating model elements, with the leading best-in-class GICs setting examples in technology adoption and use of analytics to perform activities beyond descriptive analytics.

While GICs continue to face tough competition from service providers, they have demonstrated that, similar to other functions, they can play the role of a trusted value-adding partner in delivering procurement processes of both transactional and complex nature.

This report provides an assessment that covers the current landscape of procurement services delivery from GICs, various themes of evolution of procurement services delivery, and operating model elements along with a forward-looking view of the expected transformation of delivery.

Membership(s)

Global Sourcing