Procurement outsourcing market experiences positive 2015 so far | DMA

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Procurement outsourcing market experiences positive 2015 so far


It has been revealed recently on the Supply Management website that the global procurement outsourcing market has grown significantly so far this year, and could grow up to 12% by year-end. This is obviously music to our ears, so thought we’d look a bit closer at the research conducted by Everest Group, the firm that collated the data.

According to the Procurement Outsourcing (PO) Annual Report, The Dawn of a Transformational Era, the market reached a value of £1.4 billion last year thanks to its increase of 12%, and the same growth figure could be repeated this year, too. The increase is being attributed to buyers changing what they look for from their contracts – namely more value and flexibility.

In fact, the report details how contracts are moving toward a “cost plus value” model, with operational excellence, market intelligence and supplier relationship management all becoming important aspects when it comes to signing contracts.

Because of this shift in focus, the average cost of deals decreased as businesses looked for more, lower-value contracts as opposed to single large-value ones.

It was also discovered that there were five key businesses that held the majority (75%) of the market share; however, as the sector continues to expand so too does competition, with more and more businesses beginning to make their mark.

Technology is also playing a much larger role in the industry, with ‘as-a-service’ models gaining in popularity along with analytics, mobile tech and process automation.

What do you make of the changes occurring in the procurement outsourcing market? Do you think 2015 will see more growth than the 12% experienced in 2014?

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