Procurement Outsourcing (PO) – Annual Report 2014: Expanding New Horizons

13 Jun 2014



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The global multi-process Procurement Outsourcing (PO) market registered strong growth of 12% in 2013. Both organic and inorganic factors made near-equal contribution to the overall growth. The market is currently in a state of flux, with record new deal signings and record number of terminations, simultaneously. Such volatility, attributed to switching of service providers, is an indication of reducing stickiness. While the value proposition of PO remains primarily driven by cost and spend reduction, new themes, such as category expertise, access to technology, and integrated view/governance, are also emerging. Furthermore, PO is moving beyond its traditional borders, as seen by its continuous merger with finance and accounting, greater penetration into supply chain processes, and higher collaboration with human resources.

In this study, we analyze the global multi-process PO market in 2013. We focus on:

  • Market size and buyer adoption
  • Value proposition and solution characteristics across process & category scope, global sourcing, pricing structures, technology model, and performance metrics
  • PO service provider landscape, covering service providers’ market share and areas of investments

Market Share

Scope of analysis

  • Third-party PO deals; it does not include shared services or Global In-house Centers (GICs)
  • Around 550 multi-process PO deals signed as of 2013, with a minimum of three PO processes, over US$1 million in ACV, and a minimum contract term of three years
  • 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

Market Growth


This report will assist key stakeholders (buyers, service providers, and technology providers) understand the changing dynamics of the PO market and help them identify the trends and outlook for 2014. In this backdrop, the report provides comprehensive coverage of the global PO market, including detailed analysis of market size and growth, buyer adoption trends, PO value proposition, solution characteristics, and service provider landscape. Some of the findings of this report are:

  • The PO market witnessed strong growth of 12% in 2013
  • Deal metrics remained broadly in line with the past trends, however, the average deal size and term rose marginally
  • Adoption by financial services and travel & logistics increased significantly in 2013
  • Spend reduction for S2C-focused contracts and cost reduction for P2P-focused contracts are the main drivers for PO
  • Collaboration between HR and procurement is on the rise. Nearly 75% of the contracts had HR-related categories in 2013, compared to 67% previously
  • Tail end spend management is becoming more mainstream as buyers look to maximize savings
  • Robotics is emerging as a disruptive force in P2P automation
  • With the acquisition of Procurian, Accenture has emerged as a leader, commanding nearly one-third of the PO market. The PO market is highly consolidated with the top five players commanding more than 70% of the share

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