The start of the year of PO
I was told this month that Capgemini is soon to announce one of the most substantial procurement outsourcing (PO) deals in the market.
My suspicion is that this deal could be with Kraft Foods, a company that has not been shy of a bit of big business this year.
The US firm has been vocal about procurement lately, marking it out as a key savings lever in the Cadbury deal and announcing its own plans to cut purchasing costs in September last year.
In December Kraft revealed it had signed a deal for an e-procurement system with IBX, which, incidentally, has recently been acquired by Capgemini.
Under the takeover, the Swedish firm’s technology will sit alongside Cap’s outsourcing expertise, in a “full procurement as a service” offering. David Poole, Capgemini’s head of BPO in the US, says the soon-to-be-announced PO deal will use exactly this offering.
Furthermore, Rachael Stormonth, vice president at NelsonHall, informs me that a US consumer products group – which has recently acquired a major UK brand – is Capgemini’s latest client. She does not name the firm though.
This is all very intriguing and could be a positive sign for the PO market. Readers may be tired of the annual predictions (and therefore headlines, admittedly many in SM) pointing to “the year of procurement outsourcing”. But with a Kraft deal on the cards and last week’s news of Pinnacle Foods Group’s PO agreement, there may be some substance to the predictions.
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Procurement outsourcing is very enticing but what we are seeing from the Toyota recalls we procurement professionals must be very careful in ensuring that the quality of our organization’s products and services is not compromised.There must be strict monitoring and greater collaboration with the suppliers so as to meet both the quality and lead time in the supply of the items and services required.
S B OKON
Managing Consultant -Nisskam & Associates
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