Introduction

Procurement Outsourcing (PO) facilitates technology deployment by reducing Total Cost of Ownership (TCO) and risks as well as improving service quality. Leading PO suppliers have the technology capability to help buyers by replacing, augmenting, or retaining their existing systems. This report examines the procurement technology choices in the outsourcing context and provides insights, detailed analyses and implications for stakeholders. The research describes the evolving and competitive procurement technology market, explains how PO can help buyers better leverage their technology, and assesses the technology capability of leading PO suppliers. This report will assist both companies considering outsourcing procurement to a third-party and suppliers of PO services in decisions related to procurement technology in an outsourced environment.

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 September 2005
• Procurement systems involved in multi-process PO contracts including PO supplier deployed technology and leading procurement systems like Ariba, Emptoris, Oracle, SAP, etc.
• Suppliers with multi-process PO capability including Accenture, Ariba, IBM, and ICG Commerce
  

Contents

This report summarizes key market trends and insights to assist management in making more informed business decisions. Key insights are discussed in detail (and illustrated with supporting data and analysis) to provide the reader information in easy-to-apply, bite-size pieces. The report provides implications for buyers and suppliers of PO and discusses the following themes:

• The procurement technology market is an evolving and competitive market
• Past investments in technology have not always fulfilled their promises; PO can help buyers better leverage technology
• Leading PO suppliers have the technology capability to deliver success
• Buyers can replace, augment, or retain their existing systems landscape based on their unique business scenarios