With organizations of all sizes focused more than ever these past few years on driving cost out of their business, the procurement function has been utterly transformed. Instead of putting contracts out to bid to a limited number of suppliers, companies are increasingly tapping into massive online networks of global suppliers.
Looking to help companies manage that process, Accenture has moved to acquire Procurian, a provider of business process outsourcing (BPO) services focused on the procurement function.
Valued at $375 million, Mike Salvino, Accenture's group chief executive for BPO, says the acquisition of Procurian comes at a time when the procurement function is being rapidly transformed. Following the emergence of procurement networks such as SAP Ariba, Salvino says organizations began applying analytics to drive the emergence of fourth-generation procurement applications. Now Salvino says procurement is rapidly moving to a fifth generation of products and services that will be driven by new social and mobile computing services. As part of those two trends, Salvino says Accenture will integrate its BPO Navigator portal with the software that Procurian uses to manage procurement.
The end result, says Salvino, is a procurement space that is expected to grow 12 to 15 percent over the next three to five years.
With more organizations relying on business process outsourcing (BPO), Accenture is increasingly finding itself going head to head with rivals such as IBM not only for consulting opportunities, but also the management of entire business processes. While BPO is in itself nothing new, the emergence of cloud computing is making it a lot easier for organizations to shift the management of an entire business process to a third-party provider.
All this goes to show that the rise of cloud computing has implications that go well beyond the IT department. Not only are IT functions being shifted beyond the four walls of the enterprise, organizations are taking a hard look at what other business functions can be shifted to organizations that either have more skill in that particular area or can perform that function at a much lower cost. As such, for better or worse, cloud computing is really just the tip of the coming BPO iceberg.