ISG Provider Lens™ Procurement BPO and Transformation Services - Global Summary Report - March 2022
Sustainable Procurement
Most sourcing teams have struggled with supplier diversity and sustainability in the supply chain and as a result, environmental, social, and corporate governance (ESG) has become essential. Service providers are offering sustainable procurement services that incorporate sustainability considerations throughout the procurement process to achieve optimal value for money and support enterprises’ need to meet their sustainable development goals in environmental, economy-related and social aspects.
Touchless Procurement Solutions
Service providers are incorporating automation to streamline the purchase order management process with touchless PO to ensure speed-to-value through configurable value builders. They have developed master data management (MDM) systems, which leverage cognitive capabilities and deliver touchless master data cleansing and data normalization.
Evolution of Democratized Procurement
There has been increased demand for user support and buy desk models. Service providers are leveraging emerging technologies through partnerships in design thinking and user experience.
Operating Models
Enterprises are undergoing a drive toward lean operations, with the optimal utilization of internal resources, while focusing on high-risk and high-value strategic activities. Service providers are witnessing emerging demand for procurement middle office services to create a factory of standardized processes, improve compliance and drive value throughout the source-to-pay process.
Digital Transformation
Enterprise procurement organizations need to have an end-to-end view across the front, middle and back offices to synchronize all activities and put the right measures in place. Service providers are offering depth of expertise and services in their procurement practice through digital, analytics and category management. Providers are doing this by leveraging best-of-breed tools which have AI-based platforms for cognitive buying and sourcing. The goals are to induce automation, create procurement insight, increase revenue generation and reduce cost.
Upgrading Talent
Service providers are investing in building domain expertise through targeted investments and the upskilling of full-time employees by leveraging client-specific e-learning platforms for rapid ramp-up. They are forging strategic consulting partnerships with domain-knowledge experts to augment their internal knowledge banks.
Accelerated Transformation Among Clients in the APAC Market
Enterprises are purchasing most of their goods and services manually, with invoices being coded, approved and entered by the procurement function. They have low user adoption of their existing procurement systems. Leading enterprise needs in this regional market are to increase spend under management and improve on the limited understanding of the procurement capabilities, practices and systems required. Service providers are mitigating this through process standardization that is driven by reengineered processes and a unified methodology, OCR for manual invoicing, workflow management tools and end-to-end source-to-pay systems, and by integrating advanced analytics into the procurement system.
Increased Demand for Risk Management Solutions
The COVID-19 pandemic has severely disrupted global supply chains, resulting in supply shortages due to factors such as a shortage of shipping containers, transportation restrictions and unpredicted demand. Procurement managers across verticals have realized the importance of effective procurement risk management for better resiliency. Service providers are deploying a technology-led procurement model through platforms that support analytics and AI. They also use supplier risk management software for gathering and managing vendor risk data and advanced procurement analytics, including predictive, geospatial and visual mapping, to ensure efficiency and accuracy.
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