BPO in Supply Chain Management (SCM) has grown from a nascent practice to an emerging one in a very short span of time. This practice grew at over 25 percent compound annual growth rate from 2010 to 2014, and the market size currently stands at US$1.0-1.2 billion.
In terms of adoption trends for SCM BPO, the following buyer categories are the primary drivers:
- Adoption is led by North American organizations (65 percent)with Asia Pacific being the region with the highest growth;
- Large-sized organizations (revenue exceeding US$5 billion) represent 69 percent of buyers; and
- The manufacturing vertical leads in adoption (40 percent market share).
Currently, core SCM BPO processes focusing on delivery are the most frequently included in SCM BPO agreements. In the future, control tower based solutions are likely to continue to gain traction. Also, as supply chain analytics become more complex, big data analytics is likely to impact the market significantly.
These results and other findings are explored in a recently published Everest Group report: “Supply Chain Management (SCM) BPO—Annual Report 2015: SCM BPO: An Idea Whose Time Has Come.”
The full report analyzes the global SCM BPO market, focusing on:
- Market overview and contractual activity
- Global growth and adoption trends
- Solution characteristics and emerging trends
- Service provider landscape
“In the past, organizations tended to compartmentalize procurement, logistics and inventory management, but now companies are seeking third-party providers who offer comprehensive SCM BPO offerings,” said Swapnil Bhatnagar, Everest Group practice director. “The potential is huge, so service providers are responding quickly, developing offerings that blend technology augmentation, reporting/compliance capabilities and analytics to transform the supply chain operations of their clients.”
About Everest Group
Everest Group, an advisor to business leaders on the next generation of global services, has a worldwide reputation for helping Global 1000 firms improve performance by optimizing back- and middle-office business services. Through practical consulting, original research and industry resource services, Everest Group helps clients maximize value from delivery strategies, talent and sourcing models, technologies and management approaches. Visit http://www.everestgrp.com and research.everestgrp.com.