16 June 2010 | Andy Allen
A significant number of new providers have entered the procurement outsourcing (PO) market with many forming alliances to compete with the larger players.
That’s the finding of research by Everest which highlighted the contrasting fortunes of the PO market and the finance and accountancy outsourcing (FAO) market in two sparate reports.
In the study The Dynamic PO Supplier Landscape – Evolving from Segment Focus to End-to-end Capabilities, research director Saurabh Gupta said: “The nascent PO market is quite dynamic, characterised by new players entering the market, revised value propositions and significant alliance activity.”
Everest’s Global FAO Landscape report, meanwhile, found there was increasing competitiveness among providers in the FAO market.
Gupta said: “The mature FAO market is getting increasingly competitive with players vying to carve out unique value propositions to differentiate themselves.”
In 2009, there were several alliances and partnerships between procure-to-pay and sourcing-focused suppliers to compete against global end-to-end source-to-pay suppliers such as Accenture and IBM.
While IBM, Accenture and Genpact remained the dominant global players in the FAO market. Other providers are closing the gap, the report added.
In March 2010 Everest announced that the procurement outsourcing market had enjoyed a dynamic past year and would grow by more than 20 per cent to be worth nearly $1.3 billion (£880 million) in annual contract value by the end of 2010.