Systems integrator awarded multi-year indirect procurement BPO contract by US food giant

Systems integrator awarded multi-year indirect procurement BPO contract by US food giant

Capgemini has been awarded a multi-year indirect procurement business process outsourcing (BPO) contract by food and beverage giant, Kraft Foods in North America.

Services to be provided by Capgemini include strategic sourcing and spend management of a wide range of categories, including IT hardware and software, maintenance, repair and overhaul (MRO), contingent labour, office supplies and some types of packaging, alongside requirements.

Sourcing and category management services will be provided out of Chicago, while activities such as support for spot buys, spend analytics, supplier compliance checking and transaction processing will be delivered from Chennai.

Acquisition provides market entry

Rachael Stormonth, senior vice president at market research firm, NelsonHall commented: “For Capgemini, this is its first standalone procurement BPO deal where it will be working alongside IBX, the procurement SaaS [software-as-a-service] vendor it acquired in February. Kraft initially signed a contract with IBX last fall to move to its hosted e-procurement platform from Ariba, and then five months later agreed the BPO deal with Capgemini.

“Unsurprisingly, Kraft is looking to reduce its indirect supplier base,” Stormonth continued.

Kraft (which outsourced its human resources to IBM from January 2009 following internal initiatives with its shared service centres) is a major coup for Capgemini in a sector, CPG [consumer packaged goods], which has shown itself attracted to outsourcing indirect procurement.”

She added: “While procurement BPO has been growing in recent years, the rate of growth has been constrained to an extent by lack of extensive choice of BPO service providers able to deliver a multi-national service: Capgemini's entry into the arena of major league players is thus a welcome move.”