Growing the Market Pie: Expanding the Definition of Procurement BPO (Part 5)

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

In this post, we'll consider the role of P2P (eProcurement primarily, but also, to a lesser degree, e-invoicing) in the BPO world. It's worth starting by noting that the P2P BPO world is one confusing universe. And trust us -- if we don't fully get it, it's unlikely anyone else will. Part of the problem is that it's like two economists arguing over the semantics of particular definitions before even getting to the true gist of the underlying sides of the debate. What P2P BPO means for someone could be something very different to a third-party. The central piece of the challenge comes down to landscape proliferation (i.e., lots of different players, doing different things, which either directly or sort of -- depending on whom -- look like a managed service).

The SAP procurement BPO ecosystem is about as messy and confusing as it gets. On the one hand, you have folks like Hubwoo who really do deliver a shared service (hosting a shared or single instance, network enablement, catalog management as a service, etc.). And on the other, you have companies like Infosys that deliver a hosted version of SRM with essentially what amounts to a lot of customization around any particular deployment (with dedicated resources tossed at the problem). This raises another good point: any time an offshore procurement BPO tells you they have a team that has done it before, just assume, to be conservative, that you're getting a fresh resource with limited past experience.

The other element (and challenge) of defining procurement BPO is that we believe a lot of what Ariba and SciQuest do, for example, is BPO. Take supplier enablement/onboarding and catalog management as a service for P2P. This is absolutely a managed service. But it's Ariba and SciQuest delivering it in the context of a deployment. If you went with SAP, Oracle, PeopleSoft or others, you would need a third-party (perhaps an ERP partner) to do precisely what Ariba and SciQuest do to make the whole thing work. OB10, for that matter, is also a BPO for supplier enablement.

This is a topic we could expound on for pages. Yet hopefully you get the point. The P2P BPO lines are messy. Very messy. Moreover, many of the more successful best-of-breeds are delivering a managed service as part of their implementation and offering -- or at least providing services that you would need to engage a BPO partner of an ERP to deliver if you went down that route.

- Jason Busch

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