infoTECH Feature

August 28, 2015

Accenture's Winner's Circle Designation in Procurement Technology is a Sign of Industry Maturation

Accenture (News - Alert) recently announced that it had received ‘Winners Circle’ recognition for its procurement-as-a-service (PaaS) solution from HfS Research. The designation is the result of input from more than 1,100 responses from industry analysts, BPO buyers, service providers and stakeholders.

Those who are familiar with the Magic Quadrant evaluations that Gartner (News - Alert) provides for various industries will see some similarity in HfS’ methodology. It consists of graph where the y-axis measures innovation and the x-axis measures execution. The best performers in both areas would be represented by points as far along a line as possible extending at a 45-degree angle from the graph’s origin.

By this definition, Accenture was deemed the best of the Winners Circle designees. Other companies in the Winners Circle include IBM, GEP, Xchanging, Capgemini and Infosys (News - Alert). HfS also recognizes a group of companies that, while strong in execution and innovation, fall short of the Winner’s Circle. Known as High Performers, these companies include DSSI, Genpact (News - Alert), Proxima, Denali and Optimum Procurement.

The PaaS industry has seen some consolidation in recent years. In 2013, Accenture acquired Procurian; both were in the HfS Winner’s Circle for PaaS that year. This came a couple of years after Infosys acquired The Portland Group. Many companies not acquiring or being acquired by other companies have chosen to form partnerships.

The PaaS market in 2015 has reached a level of maturity where the rate of growth is slowing down and only larger companies can stay in the market. The acquisitions and partnerships that have formed in recent years alone show that this is not an industry for smaller providers. HfS supports this trend with simple numbers. The industry had double-digit growth a few years ago, but that growth today is around 6 percent.

This market maturation is very similar to the process that Internet service providers (ISPs) went through years ago. In the early stages, there were many mom-and-pop ISPs, but as the market matured, these smaller companies could not compete with cable companies and telecoms (two markets that are consolidating even further today).

HfS sees other trends emerging in procurement technology like robotic process automation, the growing need for strategic sourcing and category management, and some of the aforementioned partnerships failing. It is a great time to be in the PaaS industry if you are among its giants, but not so much otherwise.   




Edited by Dominick Sorrentino
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