Analysis: Companies 'Testing The Waters' In Outsourcing Procurement

Research firm IDC says procurement is getting increased interest as a business function companies may look to outsource. Don't expect a short-term stampede in that direction, however. "There is a definite surge in interest in procurement BPO [business process outsourcing] in today's business climate," says Romala Ravi, IDC program manager, supply chain, product lifecycle management and BPO services. "At the same time, companies are mostly interested in 'testing the waters' and taking 'baby steps' with their procurement BPO engagements." IDC estimates that the worldwide procurement BPO market was $5.9 billion in 2002. The Framingham, Mass., firm predicts that market will increase at a five-year compound annual growth rate of 15.2%, reaching $12 billion by 2007. IDC updates its five-year forecast for this market in its study, "Worldwide and U.S. BPO Forecast and Analysis, 2002-2007." It is available for purchase from IDC.