Third-party providers such as Accenture, Genpact and TCS are playing pivotal roles in reimagining supply chain operations.
As supply chain issues hamper global economies, Everest Group predicts that the market for supply chain management (SCM) business process services (BPS) will expand at a 16-18% compound annual growth rate between 2021 and 2023, after achieving a sharp post-pandemic recovery in 2021 to reach US $2.4-2.6 billion.
“In the Everest Group 2022 Key Issues Survey, enterprises identified their top two business constraints going into 2022 as, No. 1, ‘cannot find enough talent to run the business’ and, No. 2, ‘logistics are bottlenecked,’” said Shirley Hung, partner at Everest Group. “Both of these corporate issues are contributing to rapid growth in the outsourcing market for SCM business process services.”
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Although the overall market for SCM BPS is expected to grow rapidly through 2023, after-sales services will grow the fastest (16-20%) as compared with other subfunctions—namely, make/manufacture (8-12%) and deliver (10-12%)—because of its direct impact on customer satisfaction, brand-image, and the top-line revenue of the organization. After-sales services FTEs have already grown significantly (9-12% between 2019 and 2021), as buyers increased outsourcing of the management of field services, warranties, and claims. This trend is expected to continue as enterprises remain focused on improving customer experience through personalization and customized offerings.
The talent shortage will be another one of the key drivers for organizations looking to increase their SCM BPS outsourcing. According to enterprise buyers surveyed for the Everest Group 2022 Key Issues Study, 32% of buyers said they intended to move an average of 19% of their work outside of their organization to address talent shortage issues.
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“We are certainly seeing shifts in buyers’ priorities as enterprises are more open today than ever before to outsourcing strategic, judgment-intensive supply chain processes such as supply/demand planning,” said Hung. “Also, enterprises are increasingly seeking third-party providers to support the adoption of digital technology solutions such as control towers and planning platforms to enable supply chain visibility and inventory planning. Service providers are playing a pivotal role in catering to this new demand by expanding their capabilities through in-house investments in technology and talent as well as through inorganic routes.”
The Everest Group SCM BPS PEAK Matrix® Assessment 2022 lists the top service providers in the market as Accenture, Genpact and TCS. These Leaders consistently stand out as the top providers across geographies and major industries.
These findings and more are detailed in Everest Group’s recently published report, “Supply Chain Management (SCM) BPS State of the Market Report 2022 – Increasing Role of Third-party Providers in Reimagining Supply Chain Operations.” This research provides comprehensive coverage of the SCM BPS market and analyzes it across dimensions such as adoption trends, buyer objectives, provider landscape, and the evolving market situation.