Procurement outsourcing stats

Outsourcing lands in procurement – 3/16/2006 – Purchasing – CA6315354

According to research from the Everest Group in Dallas, which publishes an annual study on procurement outsourcing, the procurement outsourcing sector grew 30% in 2005 to reach $297 million. It is expected to exceed $380 million in 2006. Given that the current “spend base” is estimated to be about $25 billion (translating into a current market penetration of under 1%), there is a huge potential for growth in procurement outsourcing. According to Everest, “Procurement outsourcing has the potential to become the biggest ‘game changer’ in business process outsourcing.”

…

Interestingly, the manpower savings associated with procurement outsourcing really only scratches the surface of benefits. The real savings come from the specialized procurement expertise and the volume-generated leverage that procurement outsourcing providers can bring to the table, which lead to lower procurement costs. In fact, according to Everest Research Institute, one reason for the growing popularity of procurement outsourcing is that the strategy can achieve five times the savings multiples of other business process outsourcing domains, delivering a potential bottom-line savings of up to 2% of sales.

…

A shortlist of procurement outsourcing providers:

• Accenture
• Ariba
• IBM
• ICG Commerce
• Capgemini
• Prosero

Technorati Tags: vendor management, contract management, procurement, outsourcing