You Don’t Get Fired for Hiring Accenture & Procurian: The Dangers of Procurement BPO Dominance [PRO]

The combination of Accenture & Procurian is a topic that we’ve explored in-depth of late on Spend Matters. Since the acquisition announcement, we’ve been aware of more than one deal in which customers gravitated to one (or both) because they were considered a “low-risk” option with significant “infrastructure” and “trusted” practices. Some of these prospects shied away from alternative BPO firms not because these providers did not offer a competitive approach, but because Accenture/Procurian presented such a compelling case for safety. If this sounds like the old days of “you don’t get fired for hiring IBM” updated for procurement BPO, you’d be right. Unfortunately, this rule-of-thumb by no means eliminates implementation risk. In the longer term, it’s not good for Accenture either. In the history of the procurement solutions market, we have never seen one player with such a dominant position in a niche or broader area from a customer vantage point. Moreover, the situation should also be a wake-up call for Xchanging, Proxima, Capgemini, Genpact, GEP, Infosys, IBM, WNS, Optimum, DHL Supply Chain and others still competing in the procurement outsourcing market today. These providers are all in a high-risk position — especially those with a platform/software vs. BPO/outsourcing identity crisis such as Infosys. Yet Accenture & Procurian have blind spots as well.

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