Bangalore to Buffalo: Procurement BPO industry needs to innovate to sustain and survive

“Bangalore to Buffalo”, is the new message from President Barak Obama to US Industries. This message was discussed in great deal during his presidential campaign and now he is living up to his promise. Many critics says its more of a political move then economical and if you see some of the facts around it looks more the same.

India has been the forefront of BPO revolution since 1990s. US Companies have opened there offices in Bangalore to cash in on the phenomenon and they invariably achieved the cost saving objectives by doing so. Is it possible for Barak Obama or US administration to reverse this tide and especially if you look into the supply chain and procurement prospective.

Procurement BPO industry has been growing a lot since 2000s and India has cashed in from the opportunity. India controls almost 69% of the business sphere as highlighted by a study conducted by AMR Research in 2009. This has been highlighted in his article India's back-office dominates procurement outsourcing by Phil Fersht of AMR Research.
Another study published by AMR Research (i.e. Supplier Management BPO breaks a billion) in terms of value of business handled by Supplier Management BPO sector has crossed $1 Billion mark.
Phil highlighted the key factors for this phenomenonal shift as:
· Service providers have successfully shifted their delivery resources to India.
· The onshore vs offshore mix for procurement is successfully materializing.
· Procurement BPO is being taken on by new industry sectors.

The study highlights the fact that business model of outsourcing is still strong and the overall business is growing in this field.

Can the current scenario of protectionism change the tide of Procurement and Supply Chain outsourcing? Many experts say the overall impact will be minimal. However the industry as a whole need to continuously innovate with new business model and take newer avenues of growth to survive the wave of recession and protectionism. The outsourcing has started from simple transactional works of issuance of contracts and managing data. It progressed towards handling low value spend buy and now with new procurement techniques like spend management, e sourcing the offshore concept has now become a strong part of procurement function of all major organizations.

Organizations needs to add more and more value to their products and try to innovate in order to manage not only low value spend but strategic spend also independently. This will be the next phase of evolution of Procurement and Supply Chain Outsourcing industry that will not only enable them to tide over the current scenario but will help them retain their global leadership in the field.