Top spots up for grabs in BPO procurement market

3 November 2005
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03 November 2005 | Anusha Bradley

The next 12 months will offer huge opportunities for organisations looking to develop in the procurement business process outsourcing market, according to researchers at IDC.

Shruti Yadav, author of the report Procurement BPO Competitive Landscape, said firms such as ICG Commerce and Ariba are well-positioned in a market overshadowed by multinational IT services companies.

Yadav told SM the global market had a "double-digit growth rate" with vendors targeting large manufacturing and services firms under pressure to cut costs. She said: "The next 12 to 18 months will reveal which firms will win the top places in the BPO market. At this point any of them could reach the top three."

Meanwhile, a number of global IT and BPO outsourcing deals up for renewal in 2006 could change the shape of the market, according to sourcing consultancy TPI. About 128 commercial outsourcing contracts originally valued at $32 billion (£21.6 billion) awarded in the past seven to 10 years are due for renewal in 2006.

TPI estimates at least 25 per cent will be re-tendered because the current market is more competitive than 10 years ago, and this could have implications for the market position of suppliers.

The IDC report analysed IT firms with procurement expertise including IBM, Accenture, Hewlett Packard, Capgemini, and EDS. It also evaluated specialist procurement firms Ariba, ICG Commerce, DSSI and Prosero together with category specialists NewlineNoosh, Cirqit and ThreeCore.















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