Record year for procurement outsourcing

8 April 2011

8 April 2011 | Lindsay Clark

Procurement outsourcing had a record year in 2010, a report from the Everest Group has found.

The research firm’s survey of the procurement outsourcing market found new contract signings and extensions reached an unprecedented level last year.

Meanwhile, annual contract values grew 13 per cent to reach $1.3 billion (£792 million) in 2010. And cumulative total contract value (TCV) for existing and new engagements hit $9 billion (£5.48 billion) - an increase of 15 per cent from 2009.

Everest vice president Saurabh Gupta, said: “We continue to see an increase in sourcing-focused contracts, driven by the need to generate quick savings, and we expect to see these contracts expand into transactional services to ensure compliance and sustainability of savings.”

Everest forecast that annual contract values for procurement outsourcing would grow to $1.5 billion (£914 million) in 2011, up 15-20 per cent on 2010. Consumer goods firms, retailers and manufacturing companies are expected to continue to lead the outsourcing trend, while financial services, hi-tech industries and telecoms are expected to see significant increases too.

The report highlights a number of prominent procurement outsourcing deals including:

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