WNS Acquires Denali: Acquisition Summary and Market Analysis [PRO]

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Earlier today, WNS announced it had acquired Denali Sourcing Services, a procurement solutions provider. Denali was one of the pioneers in procurement managed services. But more recently, the firm has expanded its broader practice in such areas as spend analytics, market intelligence and training. Not all of these capabilities will transition over to WNS — some will remain with the original Denali group, which will be rebranded in the coming months.

Denali brings a number of capabilities to WNS, including a center of excellence (COE)-driven managed services capability for spend analytics, strategic sourcing, category management and supplier management. In short: It adds many “baited hooks” to chum the waters for the broader business process outsourcing (BPO) and outsourcing nets WNS is casting in the market.

But perhaps most important from a market perspective, the transaction will put pressure on other offshore BPO firms, including Genpact, Infosys, HCL and Tech Mahindra, looking to accelerate penetration in North America and Europe through the addition of onshore expertise and capability. For this reason — among others — Spend Matters believes this deal is likely a harbinger of more acquisition activity to come in 2017. In the near term, however, Spend Matters believes the acquisition will do little to blunt the leadership positions of Accenture and GEP for procurement BPO and managed services.

This Spend Matters PRO First Take Analysis provides an overview of the capabilities Denali brings to WNS, key takeaways, an overview of procurement managed services and insight into select additional acquisition candidates that could contribute to further consolidation in this market.

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