After a pandemic-related boom, enterprises
are still adopting procurement BPO while exploring deeper
transformations, ISG Provider Lens™ report says
Enterprises have scaled back investments in procurement BPO
services since late 2022 but are still modernizing their
procurement functions to better compete under still-challenging
business conditions, according to a new research report published
today by Information Services Group (ISG) (Nasdaq: III), a leading
global technology research and advisory firm.
The 2023 ISG Provider Lens™ global Procurement BPO and
Transformation Services report finds spending growth on procurement
outsourcing has slowed from about 30 percent year-over-year in the
immediate wake of COVID-19 lockdowns to about 15-20 percent today.
While the dramatic supply-chain disruptions and price shocks of the
pandemic have eased, companies are still facing global instability,
economic uncertainty and the need to deeply transform procurement,
ISG says.
“When the pandemic hit, companies suddenly saw the cracks in
their procurement practices,” said Scott Furlong, partner and
leader of ISG Global Business Operations. “Emergency measures
helped, but now they are looking at structural changes that will
help them adapt to future requirements, so we expect investment to
accelerate again.”
BPO, especially procurement outsourcing, has become a widely
accepted practice over the past few years, the report says. While
most initial outsourcing projects have been aimed at cutting
expenses in the short run and avoiding cost increases in the
future, many enterprises are now working with digital
transformation providers to create links and consistency across
procurement, finance and supply-chain functions.
Manufacturing firms remain the most common users of procurement
outsourcing, accounting for nearly 30 percent of procurement BPO
and transformation engagements worldwide, followed by health care
and pharmaceutical companies, ISG says.
Automation of procurement continues to grow, evolving beyond
robotic process automation to more intelligent systems utilizing AI
and machine learning, ISG says. A number of service providers
assessed by ISG say they expect to automate a significant
percentage of their clients’ procurement operations within three
years. A related trend is the rising importance of master data
management, as enterprises and providers recognize the importance
of clean, uniform and easily available data for effective analytics
to improve procurement processes.
Many enterprises are also outsourcing processes for complying
with environmental, social and governance (ESG) standards in
procurement, the report says. All service providers offer ESG
compliance management as a service, while some 80 percent of
enterprises have at least a moderate commitment to sustainable
procurement.
“Procurement is a major focus area for ESG goals and
regulations,” said Jan Erik Aase, partner and global leader, ISG
Provider Lens Research. “By including ESG management in their
standard portfolios, service providers make it easier for clients
to enforce and streamline their own policies while meeting current
and future regulations.”
The report also explores several other procurement outsourcing
trends, including the continuing importance of procurement software
platforms and the progression of procurement BPO engagements into
transformations.
For more insights into the procurement challenges enterprises
face, along with advice on how to overcome them amid ongoing
business and economic changes, see the ISG Provider Lens™ Focal
Points briefing here.
The 2023 ISG Provider Lens™ global Procurement BPO and
Transformation Services report evaluates the capabilities of 25
providers across four quadrants: BPO Services — Large Accounts, BPO
Services — Midmarket, Transformation Consulting Services — Large
Accounts and Transformation Consulting Services — Midmarket.
The report names Accenture, Genpact, GEP, IBM and Infosys as
Leaders in all four quadrants. It names HCLTech as a Leader in
three quadrants. Capgemini, Corbus, Corcentric, Deloitte, TCS, Tech
Mahindra, Wipro and WNS Denali are named as Leaders in two
quadrants each.
In addition, Tech Mahindra is named as a Rising Star — a company
with a “promising portfolio” and “high future potential” by ISG’s
definition — in two quadrants. HCLTech and WNS Denali are named as
Rising Stars in one quadrant each.
Customized versions of the report are available from Capgemini,
Corcentric, GEP, Nexdigm and WNS Denali.
The 2023 ISG Provider Lens™ global Procurement BPO and
Transformation Services report is available to subscribers or for
one-time purchase on this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only
service provider evaluation of its kind to combine empirical,
data-driven research and market analysis with the real-world
experience and observations of ISG's global advisory team.
Enterprises will find a wealth of detailed data and market analysis
to help guide their selection of appropriate sourcing partners,
while ISG advisors use the reports to validate their own market
knowledge and make recommendations to ISG's enterprise clients. The
research currently covers providers offering their services
globally, across Europe, as well as in the U.S., Canada, Brazil,
the U.K., France, Benelux, Germany, Switzerland, the Nordics,
Australia and Singapore/Malaysia, with additional markets to be
added in the future. For more information about ISG Provider Lens
research, please visit this webpage.
A companion research series, the ISG Provider Lens Archetype
reports, offer a first-of-its-kind evaluation of providers from the
perspective of specific buyer types.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading
global technology research and advisory firm. A trusted business
partner to more than 900 clients, including more than 75 of the
world’s top 100 enterprises, ISG is committed to helping
corporations, public sector organizations, and service and
technology providers achieve operational excellence and faster
growth. The firm specializes in digital transformation services,
including automation, cloud and data analytics; sourcing advisory;
managed governance and risk services; network carrier services;
strategy and operations design; change management; market
intelligence and technology research and analysis. Founded in 2006,
and based in Stamford, Conn., ISG employs more than 1,600
digital-ready professionals operating in more than 20 countries—a
global team known for its innovative thinking, market influence,
deep industry and technology expertise, and world-class research
and analytical capabilities based on the industry’s most
comprehensive marketplace data. For more information, visit
www.isg-one.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230417005585/en/
Press Contacts: Will Thoretz, ISG +1 203 517 3119
will.thoretz@isg-one.com Julianna Sheridan, Matter Communications
for ISG +1 978-518-4520 isg@matternow.com
Information Services (NASDAQ:III)
Historical Stock Chart
From Mar 2024 to Apr 2024
Information Services (NASDAQ:III)
Historical Stock Chart
From Apr 2023 to Apr 2024