It never ceases to amaze me how consistently market research firms come up short in defining and capturing what makes up the procurement outsourcing or procurement BPO market. There seems an almost arbitrary line between whether or not software providers and consultants — and consulting revenue — should be included as part of the buy-side outsourcing catchall. In my view, this is a huge mistake, as in practice, there is no grey area between having constituents outsource a function and result versus subscribing to or buying a software or service. To wit, outsourcing requires that an external partner take on the responsibility for not only providing the potential of an outcome (e.g., identifying savings, providing the potential to reduce maverick spending, etc.) but the actual delivery of the result. For this reason, I have a very difficult time understanding how the firm, Marketsandmarkets, explains the scope of procurement BPO in a recent report in the banking sector.
According to a summary of the report, Marketsandmarkets suggests, “Accenture, Ariba, and ICG Commerce dominate the emerging procurement outsourcing market.” Two players on this list, Accenture and ICG Commerce, are no doubt among the leaders in the growing procurement BPO space (I’d also add numerous others to the list including IBM, Genpact, Infosys, Xchanging, etc.) But Ariba, by its own go-to-market approach, is not even a player in the outsourcing game…
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