The Institute"s Global PO Supplier Landscape Report analyses a fast-changing supplier base that includes the following analyses: market snapshot and types of offerings, supplier market shares and trends, delivery capability assessment, characteristics of various supplier segments and implications for key stakeholders, including buyers and suppliers. The PO market continues to grow in bursts, with an overall 26 percent CAGR pace and supplier managed, non-core spend reaching almost US$60 billion, according to the Institute.
“As suppliers continue to work towards overcoming supply and demand constraints, changing market dynamics are forcing suppliers to change strategies to move towards offering more end-to-end services or hold their leadership positions," said Katrina Menzigian, Vice President, Everest Research Institute.
"Because few suppliers today have end-to-end S2P (source-to-pay) service capabilities, they are making concerted efforts to round out their capabilities through acquisitions partnerships and internal enhancements", he added.
According to the study, the changed supplier mix reflects three emerging PO offerings -- sourcing-focus, procure-to-pay (P2P) focus and end-to-end or source-to-pay (S2P). Supplier market share and trends include:
The PO market continues to be concentrated, but the supplier mix is changing. The Top four suppliers – Accenture, IBM, ICG Commerce and Xchanging continue to account for almost 75 percent of active annual contract value; however, several new players are emerging that are establishing notable market share. Suppliers are creating their own areas of leadership by focusing on specific geographies, industry verticals or buyer segments. Nearly 45 percent of PO contracts signed by end-to-end suppliers are greater than US$50 million in total contract value as compared to 16 percent for sourcing-focused and 25 percent for P2P-focused suppliers, respectively.
“PO suppliers are expanding their delivery footprint across onshore, in-region and offshore delivery locations," said Saurabh Gupta, Research Director, Everest Research Institute and co-author of the report. “While sourcing-focused suppliers are onshore-centric and P2P -focused suppliers tend to focus on offshore-centric models, end-to-end suppliers have developed a healthy mix of onshore, in-region and offshore FTEs. Almost all PO suppliers are beginning to optimize their location strategies as global sourcing starts to play an increasingly important role in the PO market", he added.