Outsourcing of procurement functions is on a "see-saw" growth path fueled by an enhanced value proposition and strong movement towards global sourcing and offshoring, according to an Everest Research Institute study of the procurement outsourcing (PO) market.
Companies signed fewer procurement outsourcing deals in 2007, a number slightly below the landmark 2006 figures; however, market growth was evident as managed, non-core PO spend crossed $50 billion (US) last year, according to the Institute's study, Procurement Outsourcing (PO) Annual Report. The study explores and defines three key factors that are enhancing the value proposition for PO and driving market growth: expansion of existing engagements, a shifting adoption pattern away from "big bang" contracts towards more "phased-approach" engagements, and an increased focus on the operational components of procurement that appeals to a broader set of potential PO buyers.
