Procurement outsourcing up 10 per cent

27 June 2013

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27 June 2013 | Adam Leach

The procurement outsourcing market increased by 10 per cent in 2012 with consumer goods and manufacturing companies continuing to search for cost efficiencies.

The Procurement Outsourcing Annual Report, published this week by Everest Group, revealed that overall market value has now reached $1.72 billion (£1.13 billion) in total value of contracts, with $220 billion (£144 billion) of spend now being managed. The spike was driven in part by increased demand from financial services and tech firms while consumer goods and manufacturing companies remain the biggest adopters.

The report also found that while the management of indirect spend is more commonly outsourced, an increasing number of companies are also looking to pass direct spend onto a third party. In terms of providers, IBM and Accenture were once again the leading players with a combined market share of more than 50 per cent.

Saurabh Gupta, vice president at Everest Group, said: “A majority of savings in procurement outsourcing is derived from procurement spend reduction and compliance. This only now is becoming efficiently enabled by indirect category expertise and access to new technologies that service providers are now beginning to invest in.”

The report also said more firms are taking out contracts covering multiple countries to complement their global expansion plans, and those considering more comprehensive outsourcing are testing the water by contracting suppliers to provide spend analytics.

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