Without question the procurement BPO space is heating up--at least as you listen to providers talking about it and going after it. I've personally not seen an uptick in the percentage of deals resulting in signed agreements, but it does feel like the market may be turning from one of window shoppers to those who are serious about pulling the trigger. Earlier this week, I came across this announcement that EGS, a London-based Spend Management solutions provider, had also launched into this market by signing its first deal with NHS Brent, a UK public sector client. EGS marks yet another entrant into the Procurement BPO market that also delivers other types of procurement solutions and services (many BPO providers like IBM and Accenture have different consulting, services, and even software arms, in the case of IBM).
According to the announcement, "the contract will see EGS providing operational procurement to NHS Brent and its Community Service, acting as the first point of contact for budget holders for all procurement enquiries...EGS will have an on-site presence and be responsible for the management and maintenance for the Oracle SBS e-proc solution." Moreover, EGS will "take care of day-to-day sourcing of goods and services from suppliers, plus catalogue and content management." In other words, even though the deal is limited to a single healthcare trust, it's fairly comprehensive.
In Spend Matters' view, healthcare providers should look beyond the scope of existing GPO relationships in North America and begin to look at more strategic outsourcing relationships to handle spend, which they're not managing well today. This will free up healthcare sourcing organizations to focus on more important spend areas, including physician preference items, which offer the largest opportunities for cost reduction and even enhanced patient outcomes. Healthcare is a ripe market for analysis when it comes to procurement--and even industry--transformation. Look for significant coverage of this market, including scenarios for how healthcare provider organizations might begin to reshape themselves and take cost out of the overall healthcare supply chain.