Market grows for outsourced buying

24 July 2008
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25 July 2008

The market for transactional procurement outsourcing (PO) is growing, but the most successful suppliers remain those that offer a full end-to-end service.

Findings from the Everest Research Institute found many suppliers are building capability on transactional procurement in areas such as purchase to pay and accounts payable. But the market continues to be dominated by those companies that can offer both transactional and strategic procurement. Everest said 55 per cent of the market is controlled by just two firms, Accenture and IBM.

"End-to-end suppliers have a significantly higher capability," said Saurabh Gupta, research director at Everest. "They have internal centres of excellence that increase their expertise above the market average."

The research also found that the market is being held back, as 65 per cent of buyers wanted to farm out other functions, such as HR and IT, before outsourcing purchasing.



SMjul2008

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