Disruptions Force Enterprises to Rethink Procurement

Rhea-AI Summary

ISG's latest report highlights a shift in how global enterprises approach procurement due to COVID-19 disruptions. Over half of large and midmarket companies are considering business process outsourcing (BPO) or transformation in the next 24 months. The report emphasizes that BPO can lead to higher efficiency and cost reduction. Leading providers in the sector include Accenture, Genpact, and Infosys. Additionally, companies like Corbus and WNS Denali are recognized as Rising Stars, indicating significant future potential. Customized reports are available for detailed insights.

Positive

• Over 50% of companies are considering BPO or transformation within 24 months.
• BPO can enhance efficiency and reduce costs.
• ISG identifies top providers, including Accenture and Infosys, reinforcing competitive positioning.

Negative

• Significant supply chain disruptions have complicated procurement processes.
• Midmarket clients are seeking rapid changes amid challenges, indicating potential instability.

Some firms seek rapid reinvention, while others implement BPO and plan for longer-term transformation, ISG Provider Lens™ report says

STAMFORD, Conn.--(BUSINESS WIRE)-- Enterprises worldwide are rethinking their approach to procurement as pandemic-related disruptions force them to consider immediate improvement measures, a new research report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm, finds.

The 2022 ISG Provider Lens™ Procurement BPO and Transformation Services global report finds the COVID-19 crisis has made the ability of suppliers to deliver goods and services unpredictable, intensified unauthorized spending and made tail-spend management more complex. Relocations during the pandemic have added to procurement woes.

As a result, more than half of large and midmarket enterprises around the world are considering either complete transformation or business process outsourcing (BPO) within the next 24 months, ISG says. While some want to reinvent their procurement and sourcing as soon as possible, more seem to be investing in immediate improvement through BPO followed by a long-term, sustainable improvement path.

“For many large organizations, BPO potentially is the first major step toward procurement transformation,” said Shahid Batty, director, Business Operations, at ISG. “Data we gathered from service providers suggest a ratio of 10:1 for BPO versus transformation engagements.”

However, in the midmarket, ISG research suggests at least half of all clients are more interested in making major changes now than in starting with BPO and achieving transformation over time. Many smaller firms, which have borne the brunt of supply chain disruptions, still lack any centralized controls or management for procurement.

“Most firms in this segment seek rapid reinvention and formalization of sourcing and procurement organizations and operations,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research.

The report advises enterprises to look for at least four outcomes from a BPO engagement: higher efficiency, lower costs, identification and repair of current procurement problems, and prevention of future problems. Among its other insights, the report also identifies challenges faced by service providers that could end up affecting their clients.

The 2022 ISG Provider Lens™ Procurement BPO and Transformation Services global report evaluates the capabilities of 22 providers across four quadrants: BPO Services – Large Accounts, BPO Services – Midmarket, Digital Transformation Services – Large Accounts, and Digital Transformation Services – Midmarket.

The report names Accenture, Genpact, GEP, HCL and Infosys as Leaders in all four quadrants. It names Tech Mahindra as a Leader in three quadrants and Corbus, IBM, TCS and WNS Denali as Leaders in two quadrants each. Corcentric and Wipro are named as Leaders in one quadrant each.

In addition, Corbus and WNS Denali are named as Rising Stars – companies with a “promising portfolio” and “high future potential” by ISG’s definition – in two quadrants each. Corcentric is named as a Rising Star in one quadrant.

Customized versions of the report are available from Corcentric, GEP, Tech Mahindra and WNS Denali.

The 2022 ISG Provider Lens™ Procurement BPO and Transformation Services report for Global 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., Canada, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, 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 800 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220401005327/en/

Press:

Will Thoretz, ISG

+1 203 517 3119

will.thoretz@isg-one.com

Erik Arvidson, Matter Communications for ISG

+1 617 874 5214

isg@matternow.com

Source: Information Services Group, Inc.

FAQ

What does the ISG report say about procurement transformation for companies with the stock symbol III?

The ISG report indicates that over 50% of large and midmarket enterprises are considering BPO or transformation within 24 months due to COVID-19 disruptions.

Which companies were identified as leaders in the ISG Procurement BPO report?

Accenture, Genpact, GEP, HCL, and Infosys are named as Leaders in the ISG Procurement BPO and Transformation Services report.

What are the main outcomes companies should expect from BPO engagement according to the ISG report?

The report advises looking for higher efficiency, lower costs, identification and repair of procurement problems, and prevention of future issues.

What challenges do service providers face that could affect clients according to the ISG report?

The report outlines challenges in managing authorized spending and tail-spend complexities that service providers must address.