Procurement outsourcing deals will grow by 20 per cent in 2012 and expand to other areas of the supply chain such as order fulfilment, inventory management and logistics.

This is according to analysts at research firm Everest Group. Writing in its 2012 Market Predictions report, the company said buyers will expand deals across the supply chain against a backdrop of acquisitions among procurement service providers.

The research said contract sizes will also rise, with chief financial officers increasingly driving discussions on procurement outsourcing. This will lead to more outsourcing deals that bundle finance and accounting together with purchasing.

Everest said buyers will take an end-to-end approach concentrating on source-to-contract (S2C) and procure-to-pay (P2P) processes. More acquisitions and partnerships between P2P-focused providers and S2C providers are expected in 2012 to provide complete solutions.

More direct spend categories, such as maintenance and repair, are expected to become part of procurement outsourcing deals.

Everest said the government sector around the world would see more activity in 2012, with the report singling out the UK in line with its current work on procurement optimisation.

The report said that while the procurement market is dominated by Accenture, ICG Commerce and IBM, there is strong competition on the next rung of big contenders because they are experiencing rapid growth.

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