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Procurement outsourcing market hits record heights in 2011

20 May 2012

The number of companies turning to procurement outsourcing as a means of unlocking business benefits is rising to record levels, according to a report.

Analysis from the Everest Group consultancy has revealed that the procurement outsourcing market experienced a second consecutive record year in terms of new contract and extension numbers.

The sector is expected to grow further by around 15 per cent in 2012, reaching an annual contract value total of $1.8 billion (£1.14 billion).

According to the analyst, the motivating factors behind this trend include the benefits it can offer in terms of spend reduction, process optimisation and compliance.

Saurabh Gupta, vice-president for Everest Group, said: "The business case is attractive, as it can address a cost base representing five to 15 percent of the company revenue, compared to 0.5 to 1.5 percent for most other business process outsourcing opportunities."

This comes after a recent report from CFO Research Services and Ariba suggested that procurement functions have become more strategically focused among business than they were in the past.

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Categories: Functional Practices, Procurement & Supply Chain


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