Enterprises Look to Procurement BPO Providers to Weather Pandemic
Enterprise procurement professionals, faced with growing supply chain and other risks associated with the COVID-19 pandemic, are turning to business process outsourcing providers to help them improve the value they deliver to their organizations, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The 2021 ISG Provider Lens™ Procurement BPO and Transformation Services Global Report finds enterprises looking to become more agile in their procurement processes through digital innovations. Many are using business process outsourcing providers to deal with the complexity of the procurement process, including challenges created during the COVID-19 pandemic.
“The challenge of procurement is that the more strategic it becomes to an enterprise, the more complex it becomes,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “As a result, procurement needs to be transformed into both an efficient and streamlined function and, more broadly, into a function that enables a more adaptable, agile enterprise overall.”
The pandemic has caused supply chains to break and cash flow to be disrupted, with access to resources becoming more limited and unpredictable, the report notes. At the same time, incompatibilities within and between procurement systems, operations and organizations have become painfully visible. Procurement BPO goals of efficiency, cost reduction and risk mitigation became even more challenging to enable and achieve.
A growing number of enterprises are seeking to transform their procurement functions, operations and systems in response to problems that surfaced or were made worse during the pandemic, the report says. When executed effectively, this transformation creates business agility and adaptability that can support and protect enterprises through future market disruptions.
Most providers of BPO services also provide procurement transformation services, the report says. The report assesses relevant platforms used by enterprises and service providers to help establish a solid software foundation for procurement transformation, agility and maturity.
The report also notes top BPO providers are investing heavily in software development, using robotic process automation, artificial intelligence and machine learning tools to achieve procurement goals. Many providers also focus on industry vertical expertise to deliver specialized services to customers.
Another BPO service offered by some providers focuses on transitioning customers from in-house to outsourced procurement systems. This transition requires substantial provider expertise, frameworks and resources, the report says.
Providers of transformation services offer expertise to help customers make operational, organizational and technological transitions, the report adds. One goal of transformation is to enable uniformity of experience, technologies, operations and outputs across all aspects of procurement. This requires a unification of organizations and systems that, in many cases, developed and grew in silos.
The report also notes many transformation providers are moving toward outcome-based pricing and payment options as customers look to preserve working capital during the pandemic. The irony is that customers need to spend more to transform procurement so that they can spend less in the future, the report says.
The 2021 ISG Provider Lens™ Procurement BPO and Transformation Services Global Report evaluates the capabilities of 21 providers across two quadrants: Procurement BPO Services and Procurement Digital Transformation Services.
The report names Accenture, Genpact, GEP, IBM, Infosys, TCS, Wipro and WNS Denali as leaders in both quadrants. Capgemini is named a leader in the BPO services quadrant.
In addition, HCL was named a Rising Star—a company with a “promising portfolio” and “high future potential” by ISG’s definition—in both quadrants.
Customized versions of the report are available from GEP and WNS Denali.
The 2021 ISG Provider Lens™ Procurement BPO and Transformation Services Global Report is available to subscribers or for one-time purchase on this webpage.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Germany, Switzerland, the U.K., France, the Nordics, Brazil and Australia/New Zealand, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
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