According to a newly released IDC study, interest in procurement business process outsourcing (BPO) is at an all-time high as the worldwide procurement BPO market continues to grow. IDC estimates that the worldwide procurement BPO market reached $627 million in 2005, and will expand at a five year compound annual growth rate (CAGR) of 22.3 percent to reach $1.7 billion by 2010. The study reveals that growth in customer spending is accompanied by a more crowded and diverse competitive landscape, with more aggressive activity coming from newer entrants such as services procurement BPO providers and Indian offshore BPO providers.
"Procurement BPO is quickly coming into its own as one of the fastest-growing horizontal opportunities within the global BPO market, and has become accepted as a strategic business tool to help companies achieve competitive positioning and growth objectives," said Shruti Yadav, analyst for BPO Services at IDC. "IDC predicts a continuing trend of double-digit market growth and an increasingly diverse base of adopters. All the same, vendors need to be prepared for long sales cycles, an exacting buyer base, mounting expectations and ever-increasing competition."
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