Movin\u2019 On Up In Procurement Outsourcing<\/strong><\/span><\/p>\nIn June of 2015, we published our HfS Blueprint on Procurement As-a-Service which the continued evolution of this market around end to end and modular solutions enabled by cloud technologies and supported by ever deeper category management expertise.\u00a0\u00a0 At that time, we placed Genpact as one of our \u201cHigh Performers\u201d with strengths in transactional procurement, process automation, geographic reach and a focus on continuous improvement. But we also felt that by comparison to the market leader Accenture, Genpact still had to further develop capabilities in category management, market intelligence and transformational procurement consulting to challenge for a leading position across the entire market.<\/p>\n
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We thought that Genpact would likely combine an inorganic acquisition strategy with organic activities such as the aggressive recruitment of category managers and rolling out new technology investment to make a push to move into our Procurement \u201cWinner\u2019s Circle\u201d in 2016. And while we saw signs of the organic activities from Genpact in the 2H of 2015 as some of the other service providers stayed put, we kept waiting to see a coordinated inorganic play as well as 2015 came to a close.<\/p>\n
So, now it’s here, the announcement that Genpact has pulled off a combined inorganic and organic play with the announcement of the integration of the transformational procurement consultancy of Strategic Sourcing Excellence (SSE) led by former Astra Zeneca CPO, Jon Kirby. \u00a0Jon will be joining as the new lead for source to pay services within the CFO Services and Consulting Groups led by Shantanu Ghosh.<\/p>\n
The Bottom Line: This may not be a \u201cbet the farm\u201d deal monetarily, but it does show Genpact\u2019s determination to deliver transformational procurement and compete in the HfS \u201cWinner\u2019s Circle\u201d in a market, where access to experienced talent is critical<\/strong><\/span><\/p>\nAs we have noted for the last several years, it\u2019s a continuing struggle for all of the major procurement service providers to attract and retain sourcing and category management experts. It\u2019s a \u201cseller\u2019s market for procurement buyers\u201d if you will. Since consulting skills and category management talent are what is key to driving benefits for enterprise clients in procurement outsourcing, they have to be sourced.\u00a0\u00a0 Hiring individual talent is a time consuming and risk strategy but it\u2019s also easy to over-pay for talent in an acquisition who might not be properly incented to stick around after the deal is done. So there\u2019s an inherent logic to buying just enough talent and leadership to then accelerate the effectiveness of the organic investments as well, which is what we believe Genpact has decided to do.<\/p>\n
Genpact can make it into the HfS Winner\u2019s Circle for Procurement As-a-Service in 2016 if Shantanu and Jon use this investment to enhance Genpact\u2019s existing procurement capabilities in the following ways:<\/p>\n
\nDrive the further adoption of As-a-Service solutions and commercial models and to move Genpact away from its historic focus in transactional procurement deals that were build around FTE or transaction based pricing alone.<\/li>\n Respond to the demand from clients for greater depth in category management (on-shore and off-shore) both in broad indirect categories of spend and in niche areas where the long tail of spend in a client creates cost and operating challenges today.<\/li>\n Retain the recent category talent and create momentum for new talent to pick Genpact (rather than other service providers) as a first choice for procurement career development<\/li>\n Reinforce the existing investments in spend analytics and operating insights with a greater business results orientation rather than performance management analytics alone.<\/li>\n Expand the investment in process automation and cognitive tools to replace human agent involvement in procurement processing as well as in sourcing and category management tasks.<\/li>\n Maintain the incumbent relationships for transformational consulting skills with third parties such as AT Kearney to supplement the still growing reach of the source to pay team inside Genpact.<\/li>\n Develop both end to end transformational consulting based solutions for enterprise clients in key verticals while also allowing clients to source more modular, technology and expertise based offerings as required.<\/li>\n<\/ul>\nThe procurement outsourcing market is already one of the most \u201cas-a-service\u201d of markets today but it continues to evolve rapidly and in that time of change there is a real opportunity for change in the structure of the market leaders.\u00a0\u00a0 The time is now in the adapted words of \u201870s TV character George Jefferson to be \u201c…movin\u2019 on up \u2026 to a deluxe position in the Winner\u2019s Circle.. we finally got a piece of the pie\u201d,<\/p>\n","protected":false},"excerpt":{"rendered":"
Charles Sutherland is Chief Research Officer for HfS. (click for bio) Amidst all the feverish talk of acquisitions and divestitures…<\/p>\n","protected":false},"author":3,"featured_media":938,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[48,836,97,98],"tags":[209],"ppma_author":[19],"yoast_head":"\n
Genpact makes a stealthy move up the procurement-as-a-service value chain with integration of SSE - Horses for Sources | No Boundaries<\/title>\n \n \n \n \n \n \n \n \n \n \n\t \n\t \n\t \n \n \n \n \n\t \n\t \n\t \n