Infosys: On and Offshore, Long-Time Procurement BPO Contender Ups the Spend Management Game (Part 1)

In recent years, many Indian-based procurement BPO providers have made significant strides in building a global value proposition that extends beyond labor cost arbitrage. Some firms have been more successful than others, even though offshore labor nearly always plays a key part in the staffing/talent equation in these types of engagements for Indian-based providers. Infosys, which continues to expand its procurement BPO presence, is a solid example of a BPO that has gone global (and local) with a value proposition that extends beyond shuttling bodies to lower cost labor markets and filling modern campuses in developing economies with smart grads looking to hop from opportunity to opportunity. In a series of posts looking at Infosys' procurement BPO capabilities, we'll consider how the firm has developed their self-described sourcing and procurement (S&P) practice and also how it has grown through increased global capabilities and expansions. Later in this series, we'll tackle Infosys points of differentiation in the market, and finally, we'll look at the customer experience and perspective in working with Infosys.

In recent years, Infosys' S&P engagements with companies like BP, Rio Tinto and Caterpillar have helped solidify its position as an important vendor to shortlist in any significant procurement BPO evaluation, especially in industrial markets where they've addressed both direct and indirect material buying components of the overall procurement equation. In total, Infosys has some 19 accounts (not counting A/P outsourcing clients) in the procurement BPO arena and continues to add to its client list, including a recent large deal (not yet announced, but well-known in BPO circles) that is leveraging a global delivery model.

In terms of broadening out its delivery capabilities, Infosys continues to expand in Mexico, where it is serving a number of multinational procurement accounts, as well as Brazil. Non-onsite US capacity is handled through its delivery center in Atlanta. In total, Infosys has 13 global delivery centers and 25% of its procurement BPO practice (in the sourcing/procurement area, not counting A/P) is located outside of India. The team's leverage spans some 900 different resources with capabilities -- which we'll get to in the next post in the series -- that factor into account a range of skills and areas of expertise (e.g., process knowledge, category focus and technology). Although certainly, like all Indian-based providers, extensive training and education for those new to procurement also factors into the staffing equation.

Spend Matters believes that Infosys' technology capabilities, platforms and relationships help differentiate it from many of its competitors. The only other BPO provider with similar partnership and platform relationships delivered via in-house solutions is IBX, which is now part of the Capgemini outsourcing organization. Increasingly, especially in downstream P2P activities, it is becoming critical for BPO providers to delve deeper into underlying systems that can reduce overall expenditures, thwart maverick purchases, improve working capital flexibility (and potential returns) and drive organizational compliance.

Through its relationship with SAP and a variety of home grown capabilities, Infosys brings experience in a range of technology-enabled indirect purchasing areas including catalog-based procurement, catalog management, supplier enablement and invoicing/payment/working capital. How do these and related capability and technology offerings fit into the broader Infosys S&P suite of capabilities? Stay tuned for Part 2 of this post, when we will examine Infosys' procurement BPO offerings in more detail.

Jason Busch

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