Growing the Market Pie: Expanding the Definition of Procurement BPO (Part 6)

Please click here for Part 1, Part 2, Part 3, Part 4, and Part 5 of this series.

Today we'll turn our attention to where the focus is likely to go in the future and the key questions that providers are starting to grapple with as they define how their offerings will look in the future. On the most fundamental level, the big sourcing-focused question is where will expert category management stop and end in procurement BPO or procurement managed services in the future? Will BPOs focused on delivering a truly outsourced sourcing, contract implementation, spend/supplier analytics (category specific), supplier development, supplier compliance, supplier audit service in the future or will they opt to target a handful of areas? It's a big question. Most companies looking at a category specific BPO do a poor job at three or more of the areas I just listed. Is this a BPO opportunity?

We talked about the next area we see coming down the pike earlier in this series: supplier management as a service, including supplier enablement, supply risk management, supplier performance management, supplier diversity, auditing, supplier MDM and other areas. We expect the traditional BPOs to join the action here, yet we believe the specialty knowledge of folks like Achilles (general supplier management BPO) and Deloitte (vendor management back-office and management) are likely to confer a lasting competitive differentiation when those shopping for services really dig below the surface.

Another major area of growth we hinted is merging spend and P2P analytics as a BPO service. Here, there is a likely intersection of spend analysis, category specific spend analysis, contract/invoice auditing, audit recovery and supplier/vendor file management as a service (which we think is likely to take off). This is the quintessential "big data" BPO direction for procurement where the power of expertise, analytics and benchmarks will come together to ideally result in companies getting a check every month for the continuous savings identified from their BPO partner (either in the form of compliance identification opportunities, credits or ultimately from broader/deeper opportunity identification that goes beyond the spend analysis basics).

Stay tuned as we conclude this series in the final post exploring the future of procurement BPO offerings.

- Jason Busch

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