Procurement outsourcing on the increase

22 October 2008
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23 October 2008 | Andy Allen

The market for transactional procurement outsourcing (PO) is predicted to grow entering next year.

Findings from the Everest Research Institute found the PO field will be worth $1 billion in contract value by 2009. The company said it anticipates 30 per cent year-on-year growth.

It believes while North America will continue to dominate the PO market, Europe and Asia Pacific will increasingly catch up. Cost pressures will prove to be the key driver behind the growth of the market, according to Saurabh Gupta, Everest research director.

Everest predicts new suppliers will continue to enter the market despite the top four firms accounting for more than 70 per cent of contract value. It also believes newer suppliers will win much of the mid-market business as larger providers stick to the higher end of the market.

Gupta predicts customers will increasingly adopt a "phased approach", where outsourcing is gradually adopted, rather a "big bang" approach, where multiple functions are outsourced together.



SMoct2008

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