Introduction

This report examines the expanding market opportunity around the outsourcing of Procure-to-Pay (P2P) processes. It focuses on identifying the emerging value proposition of an end-to-end approach in addressing converging buyer requirements between the F&A and procurement processes. Based on extensive primary research, including a buyer survey and in-depth supplier interviews, the study explores perspectives on adoption trends, solution components, supplier capabilities, and the supplier landscape of the present market. The report also provides over a dozen profiles of the P2P offerings of specific suppliers, along with case studies. 

Scope

In this research study, we investigate the business value and the market state of outsourcing the P2P process. The objectives are to analyze the following:

• Value proposition for outsourcing P2P
• Solution characteristics of outsourced P2P
• Impact on supplier landscape
• Implications for buyers and suppliers

The study uses the following definition for defining the market :

• Third-party PO contracts and not shared services or captives
• Multi-process PO contracts that involve 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 a contract length of at least 3 years
• All multi-process PO contracts signed as of August 2007

Contents

The study provides insights based on Everest’s assessment of the market and its implications for buyers and suppliers. It addresses both opportunities and challenges facing the market  and discusses the following themes:

• Outsourcing P2P can create business impact beyond a direct-cost impact by addressing the pain-points in buyer’s financial supply chain
• In moving beyond labor arbitrage, process efficiency and effectiveness, and technology applications are increasingly emerging as key value creation levers
• The emerging P2P opportunity is serving as a point of entry into the PO market for FAO centric suppliers expanding solutions bottom-up from AP to P2P and offshore centric suppliers leveraging existing global sourcing capabilities to offer P2P.
• Most suppliers who offer or plan to offer P2P services are making investments in building delivery capability through acquisitions, partnerships, and internal investments