So it was a year ago this month that Forrester Research was predicting the widespread adoption of business process outsourcing (BPO) procurement. Were they right? Absolutely, positively. At the time, though, Forrester's views on the rising trend were a bit softer, saying that procurement BPO has "natural limits of growth potential because very few companies will outsource their entire purchasing function."

But according to a new study from IDC, it looks like there's no end in sight both for companies that adopt procurement BPO and for the vendors that service them. IDC estimates that the worldwide procurement BPO market reached $627 million in 2005 and that it will expand at a five-year compound annual growth rate (CAGR) of 22.3 percent to reach $1.7 billion by 2010. And judging from this statement, taken from the IDC news release, the manufacturing community (that means you, devoted IMT reader) tops the adoption list:

From a vertical perspective, the majority of procurement BPO spending will continue to be driven by a few industries, such as manufacturing, financial services, retail, and utilities. In addition, the study reveals the potential for experimental adoption of procurement BPO in verticals such as non-profit and government.

The study finds that the Americas region currently retains the lion's share of spending in the global procurement BPO market, with the U.S. driving a majority of spending in the region. The EMEA region is the second-largest contributor of market spending, followed by Asia/Pacific.

"The ability to grow and sustain share in this market will depend on depth of procurement domain expertise, global presence and delivery capabilities, ability to successfully manage outsourcing relationships, and demonstration of the actual business impact of Procurement BPO," says Shruti Yadav, analyst for BPO Services at IDC. "Vendors should continue efforts to substantiate and quantify the business impact of procurement outsourcing to the customer as well as the broader market."

It looks like manufacturers and vendors alike are heeding the call of Yadav. The Timken Company, for one, just inked a pretty big procurement BPO deal with a pretty big technology provider. Timken is a big 'ol $5.2 billion industrial technology company that specializes in the making of highly engineered bearings and alloys. The company's procurement BPO deal moves from regional to national sourcing and taking a comprehensive approach to procurement. The end goal is for Timken to save big bucks while creating centralized purchasing capabilities to support its expanding global manufacturing operation.

Here's what Mike Hill, senior vice president of supply chain management at Timken, had to say about the deal:

While we have always had a progressive procurement organization, the continuing growth of our business and the increasing breadth of our product portfolio created a need to develop an infrastructure for managing complex supply bases and, at the same time, simplifying the procurement process. In order to fully realize the savings goals set for the company, we recognized that we would have to evolve our procurement initiative from a series of sourcing events to a more comprehensive, holistic program including implementation, transaction management and category management services as well as process and technology improvements.

Clearly, BPO procurement predictions from the analyst community are coming true simply because manufacturers and vendors are doing exactly what was foretold. Yet perhaps a more telling sign that BPO procurement is growing like a weed comes in the form of a concise news nugget, via Personnel Today, which describes Accenture's decision to open up BPO shop in Romania of all places.

BPO procurement has caught the manufacturing world by storm. Are you on board?