Accenture “Spend Trends” report – useful economic and category specific insight (part 1)

Since Accenture acquired Procurian last October, they have moved into a clear global market-leading position in terms of end-to-end procurement outsourcing, with strong capability ranging through purchase-to-pay and technology to increasingly deep category capability. For instance, they reckon to have 30 category experts in Travel alone and 80 in Marketing - even the world’s largest firms would be unlikely to replicate that internally.

Not everyone likes the Accenture style and culture of course, but it is hard to deny that with the Procurian injection, they now have a huge wealth of category-specific knowledge to offer. And it is good to see them putting some of that into the public domain, with a very useful quarterly “Spend Trends” report, made freely available as a download from their website here.

The report covers both some general econometric analysis and data, as well as some data and really quite deep analysis around category groups – Logistics, IT, Marketing & Media, Corporate Services (Audit), Travel, Engineering, MRO, and Energy. As my friend and colleague Jason Busch says on the Spend Matters US site:

“The Q2 edition of Accenture’s “Spend Trends” is a great piece of research that stands far above the type of analyses that knowledge process outsourcing (KPO) firms would charge clients a fee to deliver. Moreover, you don’t even need to register for it”!

In the initial section, the paper covers some general economic analysis, including a look at inflation outlook, general cost pressures, investment spending, and mergers and acquisitions. It is concise but useful comment;

“In an era of uncertainty about demand, businesses have focused more on returning cash to shareholders than investing for growth. Dividends (+24 percent in 2013) and share repurchases (+23 percent in 2013) hit a record of $241B in the first quarter of 2014. But share repurchases are getting more expensive as share prices rise, and companies finally seem to be shifting more dollars to capital expenditures to drive growth”.

I found the charts on current and forecast GDP, and the graphs showing consumer and business confidence very interesting – you may be seeing them “borrowed” here in the future I suspect! Of course forecasts quickly go out of date. I suspect since some of this was written, the outlook for Europe has worsened and the 1.5 % growth mentioned in this extract may now look optimistic:

For Europe, the IMF recently lowered its full year GDP forecast to 1.1 percent from its April forecast of 1.2 percent due to slightly weaker demand, but the transition from recession to recovery continues and 2015 GDP growth is expected to be 1.5 percent. Emerging economies continue to experience volatility, but China reported 7.5 percent GDP growth for the second quarter, slightly above estimates, as recent stimulus measures begin to show some impact”.

And we’ll come back in part 2 and look at some of the specific Accenture comments on those category areas.

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