Introduction

The global multi-process Procurement Outsourcing (PO) market witnessed healthy growth of 10% in 2012. Inorganic growth emerged as a major driver, contributing around 60% to the increase in market size. Furthermore, buyers are drawing higher value from second and third generation PO engagements by augmenting traditional models such as increasing the depth and breadth of service coverage by new modes of scope expansion, including expansion into downstream F&A processes, and expansion into adjacent supply chain activities.

In this study we analyze the global multi-process PO market in 2012. We focus on:

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

Scope of analysis

• Third-party PO deals; it does not include shared services or Global In-House centers (GICs)
• Around 400 multi-process PO deals signed as of 2012 with a minimum of three PO processes, over US$1 million in ACV, and a minimum contract term of three years
• Coverage across 20+ PO service providers with multi-process capability including Accenture, Aegis, Aquanima, Capgemini, Corbus, DSSI, Genpact, GEP, HCL, HCMWorks, HP, IBM, Infosys, Optimum Procurement, Procurian, Proxima, TCS, Wipro, WNS, Xchanging, and Xerox
• Global survey and one-on-one executive-level buyer interviews to understand how organizations perceive their PO engagements

Content

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 2013. In this backdrop, this report provides comprehensive coverage of the global PO market including detailed analysis of market size and growth, buyer adoption trends, PO value proposition & buyer satisfaction, solution characteristics, and service provider landscape. Some of the findings in this report, among others, are:

• The PO market in 2012 grew at 10% reaching US$1.72 billion in ACV representing US$220 billion of managed procurement spend
• The average contract size continued to remain similar to the last few years
• While large buyers continue to dominate adoption, 2012 witnessed increased adoption from SMB
• The overall satisfaction level among buyers is high. However, clients seek more category expertise and better stakeholder management from their service providers
• A combination of managed service fee with some skin-in-the-game for the service provider is the most common pricing model
• IBM and Accenture continue to lead the PO market with more than 50% market share (by ACV). However, the competitive landscape is intensifying and the combined market share of the top two service providers is on a decline