everest group peak matrix for po service providers€¦ · ... opportunity assessment and sourcing...

Copyright © 2014 Everest Global, Inc.

This document has been licensed for exclusive use and distribution by Infosys

Everest Group PEAK Matrix for PO Service Providers

Focus on Infosys

October 2014

EGR-2014-1-E-1262

2Copyright © 2014, Everest Global, Inc.

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Introduction and scope

Everest Group recently released its report titled “Procurement Outsourcing (PO) – Service Provider Landscape

with PEAK Matrix™ Assessment 2014”. This report analyzes the changing dynamics of the PO landscape and

assesses service providers across several key dimensions.

As a part of this report, Everest Group updated its classification of 19+ service providers on the Everest Group

Performance | Experience | Ability | Knowledge (PEAK) Matrix for PO into Leaders, Major Contenders, and

Emerging Players. The PEAK Matrix is a framework that provides an objective, data-driven, and comparative

assessment of PO service providers based on their absolute market success and delivery capability. Everest

Group also identified five service providers as the “2014 PO Market Star Performers” based on the strongest

forward movement demonstrated on the PEAK Matrix year-on-year.

Based on the analysis, Infosys emerged both as a Leader and a Star Performer. This document focuses on

Infosys’ PO experience and capabilities and includes:

Infosys’ position on the PO PEAK Matrix

Infosys’ year-on-year movement on the PO PEAK Matrix

Detailed PO profile of Infosys

Buyers can use the PEAK Matrix to identify and evaluate different service providers. It helps them understand

the service providers’ relative strengths and gaps. However, it is also important to note that while the PEAK

Matrix is a useful starting point, the results from the assessment may not be directly prescriptive for each

buyer. Buyers will have to consider their unique situation and requirements, and match them against service

provider capability for an ideal fit.

https://research.everestgrp.com/Product/EGR-2014-1-R-1215/Procurement-Outsourcing-PO-Service-Provider-Landscape-with-PEA


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Procurement pyramid (non-core spend)

Everest Group distinguishes between the Source-to-

Contract (S2C) and Procure-to-Pay (P2P) processes

S2P

strategy

4. Requisition to PO

6. Accounts payable and T&E

5. Invoice processing

7. Procurement systems

1. Spend data management

2. Strategic sourcing

3. Vendor management

Strategy

Judgment-intensive

Transaction-intensive

8. Performance management

Everest Group’s analyses include multi-process PO contracts with a minimum of three procurement processes, over

US$1 million in Annualized Contract Value (ACV), and a minimum contract term of three years. Typically, the managed spend

is greater than US$50 million

Everest Group’s analyses include all multi-process PO contracts signed as of 2013


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Everest Group PEAK Matrix – 2014 PO market standing

Performance | Experience | Ability | Knowledge

Note: For a detailed service provider profile, refer to PO Service Provider Profile Compendium 2014, to be released in October 2014

Source: Everest Group (2014)

Leaders

Major Contenders

Emerging Players

Star Performers

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix for PO

Major Contenders

Emerging Players

Leaders

Ma

rke

t su

ccess

PO delivery capability1

(Scale, scope, technology, delivery footprint, and buyer satisfaction)

25

thp

erc

en

tile

High

Low

25th percentile

75th percentile

Low High

75

thp

erc

en

tile

Accenture

IBM

Infosys

GEPXchanging

Genpact

TCS

Capgemini

Wipro

Proxima

Corbus

HP

Aegis

WNS

Aquanima

Tech Mahindra

HCMWorks

HCL

Optimum Procurement


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Infosys is a PO Star Performer, based on strong

forward and upward movement over time, on the

Everest Group PEAK Matrix

Market success in 2013

Infosys registered an ACV growth of 25% in 2013. Cumulatively, during 2010 to 2013, it grew at a CAGR of over 40%, which

is the highest amongst the Leaders

Signed seven new multi-process contracts worth nearly US$140 million in Total Contract Value (TCV)

ProcureEdge, Infosys’ proprietary S2P platform, gained significant traction and was a major factor in its market success

during 2013

Asia Pacific, particularly Australia, was the key growth market for Infosys. At an industry level, financial services and CPG &

retail were the main drivers of growth

Increased FTEs engaged in strategic sourcing by 22% and overall headcount by 15% in 2013

Augmented sourcing and category management expertise in Latin America and Asia Pacific

Extended its delivery footprint by opening new centers in Utrecht, Costa Rica, and Johannesburg

Enhanced its technology capabilities through in-house investments (ProcureEdge) and partnerships

Capability enhancements in 2013


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Infosys (page 1 of 5)

PO service capabilities

Key PO-related developments (2012-2013)

Year 2013: New delivery centers in Utrecht, Costa Rica, and Johannesburg

Year 2013: Invested in its proprietary S2P platform – ProcureEdge

Year 2013: Deployment of S2P platforms for three clients and co-development with

another client

Year 2013: Built sourcing capabilities in Singapore and Brazil with experts and teams

set up at client locations

Year 2013: Developed a tail-end spend solution, which is offered through ProcureEdge

Year 2013: Partnered with IASTA to provide a tail-end spend, consolidator-based

service

Key PO leaders

Binny Mathews, Vice President & Strategic Business Practice Head,

Sourcing & Procurement

Rajiv Gupta, Senior Practice Engagement Manager, Sourcing &

Procurement (the Americas)

Kris Koneru, Associate Vice President & Senior Practice Engagement

Manager, Sourcing & Procurement (Europe)

Bruce Stevenson, CEO, Infosys Portland (Asia Pacific)

PO service suite

Consulting: Procurement consulting and diagnostics

Strategic sourcing: Spend and demand analysis, should-cost modelling,

benchmarking, opportunity assessment and sourcing wave plan, category

management and sourcing strategy, RFx management, contract

management, vendor performance management, savings validation, price

check discrepancy, and tail-end spend management

Transactional procurement: Requisition review, spot/tactical sourcing, PR-

PO processing, PO acknowledgement and vendor expediting, PO change

management, and catalog management

Analytics: Spend analytics, master-data management, telecom expense

management, contract compliance, CPO dashboard (performance

management), and software asset management

Compliance management: Contract compliance, service provider

scorecard, and invoice audits

Solutions for e-sourcing, e-Procurement, ERP implementation, and

technology selection and hosting

Spend managed for external clients

More than US$50 billion

Category expertise

Infosys manages all indirect-spend categories for a typical enterprise utilizing

Global Commodity Councils (GCCs). It also manages MRO and other

consumables end-to-end, and low-dollar direct spend categories for some of

its clients

Scale of operations

Number of PO FTEs over time

1,000+

1,500+1,750+

2011 2012 2013


Source-to-contract (S2C) Procure-to-Pay (P2P)

>500 FTEs 100-500 FTEs <100 FTEs

FTE mix by process scope


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PO client portfolio

Time of signing Client Contract details

December 2013 Dutch multinational banking and financial services corporations Sourcing, transactional procurement, category management, and S2P

platform

December 2013 Australian State Government Diagnostics, sourcing, and category management

October 2013 German chemical manufacturing company Diagnostics, sourcing, and category management

November 2013 Multinational food and beverage corporation Diagnostics and sourcing

July 2013 Global investment & banking diversified financial services group Sourcing, transactional procurement, category management, and S2P

platform

Aug 2013 Australian bank and financial services provider Sourcing, transactional procurement, category management, and S2P

platform

Note: Based on contractual information as of 2013


Recently announced major multi-process PO engagements

Major PO clients

Large U.S.-based broadband & telecom company, global oil & gas major, global mining giant, leading mining & construction equipment manufacturer, global electronics

major, an American multinational consumer goods company, a leading UK-based pharma major, a leading American financial institution, a leading multinational bank &

financial services company, and Australia’s leading bank

PO revenue industry mix (2013) PO revenue buyer size mix (2013)PO revenue geography mix (2013)

90-95%

35-40%

25-30%

20-25%

5-10%~5%

35-40%

15-20%

15-20%

10-15%

5-10%

Financial

services

Large buyersNorth America

Asia

PacificContinental

Europe

Energy &

utilities

Hi-tech and

telecom

MEA (~5%)

UK

Latin

AmericaOthers (0-5%)

CPG and retail

Manufacturing

Mid-market (0-5%)SMB (5-10%)


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PO delivery locations

Lodz

Hangzhou

Bangalore Chennai

Gurgaon

PuneMonterrey

Belo Horizonte

Manila

London

U.S.

Perth

Singapore

San Jose


Brisbane

Sydney

Melbourne

Utrecht

Johannesburg


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S2P platform is powered by SAP technology

Bundles Infosys’ proprietary technology solutions such as IMAP and OEMS


PO technology solutions

Infosys Source-to-Pay platform

Solution

description

Addresses the entire S2P process with an integrated approach

Managed-services model; delivery by sourcing and procurement specialists

Facilitates technology-led process transformation

End-to-end responsibility for technology, process, and BPO

Focuses on large and SMB buyers

Process

scope

Entire S2P process, which includes consulting, diagnostics, category management, sourcing, spend

analysis, contract management, purchase-order execution, service provider management, and accounts

payable

Technology

leveraged

Delivery

model and

pricing

Multi-tenant model

Shared ecosystem for infrastructure, application, and specialized services

CAPEX-to-OPEX cost structure

Outcome-based (based on spend) pricing model


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Everest Group assessment

1 Based on contractual and operational information as of 2013

2 Buyer satisfaction score and overall PEAK Matrix positioning adversely impacted for those service providers who provided inadequate number of buyer

references


2011 2012 2013

Delivery capability assessment1

Assessment

dimension Rating Remarks

Scale Large PO practice with over 1,700 FTEs and manages more

than US$50 billion in spend annually

Scope Strong S2P execution capabilities; expertise across various

categories, industries, and geographies

Technology

capability

Robust technology capabilities; proprietary S2P platform

Delivery

footprint

Large delivery footprint with presence in major geographies

Buyer

satisfaction2

Strong satisfaction in process and relationship management,

low in implementation and goal realization

Market success assessment

Global multi-process PO market share over time1

Percentage share by ACV

Number of

contracts

ACV TCV

5-10% 10-15%5-10%

Global multi-process PO market share1

Percentage

MS

0-5%

0-5%

Overall remarks

Infosys witnessed strong ACV growth upwards of 40% CAGR during 2010 to 2013.

It also expanded its footprint with multiple new delivery centers in 2013

Although it started out as a P2P-focused player, the acquisition of Portland Group

brought significant S2C capabilities on-board

It has started to reap the benefits of its investments in technology. BPaaS offering

through its proprietary S2P platform, ProcureEdge, is witnessing good traction

Infosys has demonstrated limited flexibility in risk taking or exploring innovative

pricing models due to an extreme focus on margins

Infosys is a Leader and Star Performer on the Everest Group PEAK Matrix

for POHighMedium-highLow Medium

5-10%0-5%

Major Contenders

Emerging

Players

Leaders

Ma

rke

t s

uc

ce

ss

PO delivery capability


25

thp

erc

en

tile

High

Low25th percentile

75th percentile

Low High

75

thp

erc

en

tile

Infosys


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Appendix


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Traditionally, PO has been limited primarily to a

function-focused definition

Procurement pyramid (non-core spend)

S2P

strategy

4. Requisition to PO

6. Accounts payable and travel & expense (T&E)

5. Invoice processing

7. Procurement systems

1. Spend data management

2. Strategic sourcing

3. Vendor management

8. Performance management

Strategy (implemented

in-house)

Mission strategy / corporate

strategy

Business strategy

Geographic strategy

Technology strategy

Strategy

Judgment-intensive

Transaction-intensive

Strategic sourcing

Sourcing strategy

Vendor selection

Contracting

Sourcing implementation

Category management

Spend data management

Baseline analysis

Data “cube” construct

Opportunities’ definition

Requisition to PO

Approval workflow

Material requisition

Purchase order

Expediting/

troubleshooting

1

24

Vendor management

Vendor relationship

management

Contract administration

Service level/standards

monitoring

3

Procurement systems

E-auctions

Catalog management

Solution hosting

7

Accounts payable and T&E

Master data maintenance

Process payment request

T&E claims processing

EDI / P-card1 administration

Month-end closing

Vendor inquiries

Reporting

6

Invoice processing

Material/invoice receipt

Invoice payment

5

Performance management

Financial performance

Compliance management

Policies and procedures

Performance and results

reporting

8

1 Refer to appendix


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Direct

spend

Indirect

spend

Core

spend

Non-core

direct

spend

Non-core

spend

Goods and services that are key ingredients to

manufacture/deliver the final product/service

They are proprietary or specific to the

organization

For example: Iron-ore for a steel manufacturer

and rubber for a tyre manufacturer

Source-to-Contract

(S2C)

Procure-to-Pay

(P2P)

Source-to-Pay (S2P) cycle

Goods and services that are commonly required

to manufacture/deliver the final product/service

They are commodities in that industry

For example: Lubricants, packaging, and

Maintenance, Repair, & Overhaul (MRO)

Non-production goods and services that are not

required to manufacture/deliver the final

product/service but are required to operate the

organization

For example: Spend categories such as facilities,

office supplies, travel & logistics, marketing /

sales-related spend, and IT/telecom

High prevalence of third-party outsourcing

Low prevalence of third-party outsourcing

Beyond the process dimension, PO contracts also have

“procurement-spend category” dimension


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2nd or 3rd quartile

performance across market

success and capability

High

Low

25

thp

erc

en

tile

75

thp

erc

en

tile

75th percentile

Ma

rke

t s

uc

ce

ss

Everest Group Performance | Experience | Ability | Knowledge (PEAK) Matrix

Emerging Players

Leaders

Major Contenders

PO delivery capability1


Low High25th percentile

Everest Group classifies the PO service provider

landscape into Leaders, Major Contenders, and Emerging

Players on the Everest Group PEAK Matrix

1 Service providers scored using Everest Group’s proprietary scoring methodology described on the following page


Top quartile performance

across market success

and capability

4th quartile performance

across market success

and capability


EGR-2014-1-E-1262

Measures the breadth and

depth of scope of services

provided across:

Processes

Industries

Geographies

Categories

Measures the capability and

investment in tools and

technologies through:

Technology model adopted

Investments in PO technology

Measures the delivery

footprint across regions and

the global sourcing mix

Measures success achieved in

the market. Captured through

active ACV and number of clients

as of December 2013

Measures ability to deliver services successfully. Captured

through five subdimensions

Measures the scale of

operations through:

Overall company revenue

Number of FTEs

Managed spend

Scale Scope Technology Delivery footprint

Emerging Players

Leaders

Major Contenders

Mark

et

su

ccess

Delivery capability

Service providers are positioned on the PEAK Matrix

based on evaluation across two key dimensions

1 Measured through responses from two/three referenced buyers for each service provider


Measures the satisfaction

levels1 of buyers across:

Goal realization

Process delivery

Implementation

Relationship management

Contract terminations were

also assessed to gauge

satisfaction levels

Buyer satisfaction


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Year 1

Year 0

Service

provider

Mark

et

su

ccess

Capability

Methodology

Everest Group selects Market Star Performers based on the relative YoY movement of each service provider

on the PEAK Matrix

In order to assess advancements on market

success, we evaluate the performance of each of

the service providers on the PEAK Matrix across a

number of parameters including:

Yearly ACV growth

Number of new contract signings

Number of contract extensions

Value of new contract signings

In order to assess advancements on

capability, we evaluate the performance of

each service provider on the PEAK Matrix

across a number of parameters including:

Annual growth in scale

Increase in scope of services

Expansion of delivery footprint

Technology- / domain-specific investments

The top-quartile performers on each of the

identified parameters are selected and the

“Star Performer” rating is awarded to the service

providers with:

The maximum number of top-quartile

performances across all of the above parameters

At least one area of top-quartile performance in

both market success and capability advancement

The “Star Performers” title relates to YoY performance for a given service provider and does not reflect

the overall market leadership positions. Those identified as Star Performers may include “Leaders”,

“Major Contenders”, or “Emerging Players”

Everest Group confers the “Star Performers” title to

providers that demonstrate the strongest forward

movement over time on the PEAK Matrix

2014 PO Star Performers


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FAQs (page 1 of 2)

Does the PEAK Matrix assessment incorporate any subjective criteria?

Everest Group’s PEAK Matrix assessment adopts an objective and fact-based approach (leveraging service

provider RFIs and Everest Group’s proprietary databases containing providers’ deals and operational capability

information). In addition, these results are validated / fine-tuned based on our market experience, buyer interaction,

and provider briefings

Is being a “Major Contender” or “Emerging Player” on the PEAK Matrix, an unfavorable outcome?

No. PEAK Matrix highlights and positions only the best-in-class service providers in a particular functional/vertical

services area. There are a number of providers from the broader universe that are assessed and do not make it to

the PEAK Matrix at all. Therefore, being represented on the PEAK Matrix is itself a favorable recognition

What other aspects of PEAK Matrix assessment are relevant to buyers and providers besides the “PEAK

Matrix position”?

PEAK Matrix position is only one aspect of Everest Group’s overall assessment. In addition to assigning a “Leader”,

“Major Contender” or “Emerging Player” title, Everest Group highlights the distinctive capabilities and unique

attributes of all the PEAK Matrix providers assessed in its report. The detailed metric level assessment and

associated commentary is helpful for buyers in selecting particular providers for their specific requirements. It also

helps providers showcase their strengths in specific areas

What are the incentives for buyers and providers to participate/provide input to PEAK Matrix research?

Participation incentives for buyers include a summary of key findings from the PEAK Matrix assessment

Participation incentives for providers include adequate representation and recognition of their capabilities/success in

the market place, and a copy of their own “profile” that is published by Everest Group as part of the “compendium of

PEAK Matrix providers” profiles


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FAQs (page 2 of 2)

What is the process for a service provider to leverage their PEAK Matrix positioning status ?

Providers can use their PEAK positioning rating in multiple ways including:

– Issue a press release declaring their positioning/rating

– Customized PEAK profile for circulation (with clients, prospects, etc.)

– Quotes from Everest Group analysts could be disseminated to the media

– Leverage PEAK branding across communications (e-mail signatures, marketing brochures, credential packs,

client presentations, etc.)

The provider must obtain the requisite licensing and distribution rights for the above activities through an

agreement with the designated POC at Everest Group

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At a glance

With a fact-based approach driving outcomes, Everest Group counsels

organizations with complex challenges related to the use and delivery of the

next generation of global services

Through its practical consulting, original research, and industry resource

services, Everest Group helps clients maximize value from delivery strategies,

talent and sourcing models, technologies, and management approaches

Established in 1991, Everest Group serves users of global services, providers

of services, country organizations, and private equity firms in six continents

across all industry categories

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