Introduction

The Procurement Outsourcing (PO) market is at the cusp of entering the "rapid-growth" phase of market maturity. It is starting to gain significant momentum; 2006 was the landmark year with maximum contract signings. This report examines the global 2006 PO market and provides insights, detailed analyses and implications for stakeholders. The research segments and analyzes the PO market from multiple dimensions, including by market size, buyer adoption, transaction characteristics, supplier landscape, and value proposition. This report will assist both companies considering outsourcing procurement to a third-party and suppliers of PO services to understand in detail how the market dynamics and value proposition for PO are evolving.

Scope

• Third-party PO contracts and does not include shared services or captives
• Multi-process PO contracts that involves outsourcing of three or more activities from the Source-to-Pay (S2P) process with at least one activity each from Sourcing and Procure-to-Pay (P2P), addresses at least US$150 million of managed spend, and has a contract length of at least three years
• All multi-process PO contracts across all industries and geographies signed as of August 2006
• Suppliers with multi-process PO capability including Accenture, Ariba, Capgemini, EDS, HP, IBM, ICG Commerce, and Xchanging
  

Contents

This report summarizes key market trends and insights to assist management in making more informed business decisions. Key Insights are divided into three categories: Market size and buyer adoption, transaction characteristics and value proposition, and Supplier landscape. Each category contains 4-6 key trends, which are discussed in detail (and illustrated with supporting data and analysis) to provide the reader information in easy-to-apply, bite-size pieces. For example, Market size and buyer adoption is sub-divided into the following:

• Market size and growth: PO starting to gain traction; represents managed indirect spend of US$40 billion
• Geographic trends: North America has the biggest market share; Europe is emerging
• Industry trends: Manufacturing, consumer products, and financial services are leading the charge
• Buyer segments: Dominated by large buyers; activity in the less than US$5 billion segment is emerging