25.1 Importance of Project Procurement Management

	Procurement can be defined as the act of obtaining or buying goods and services from an outside source or the contracting of portions of work to outside suppliers.
	Other terms used to fulfil the same meaning are purchasing and outsourcing.
	Within the IT context Information technology outsourcing (ITO) is defined as the use of service providers for delivering IT-enabled business process, application service and infrastructure solutions.
	Many organizations choose to outsource for the following reasons:

		Reduce its fixed and recurrent costs
		Allow the client organization to focus on its core business
		Access exceptional capabilities and skills
		Provide flexibility
		Increase accountability
		Resources are not available internally

Hence, procurement is typically viewed as a strategic decision taken to improve the organization's profitability.

25.1 Importance of Project Procurement Management

	The importance of procurement in many organizations is addressed by placing their head of procurement at an Executive Board Level.
	It has been estimated by experts that figures for the market size of IT outsourcing vary depending on how the source defines "outsourcing" and what kind of industries and services are included.

		However, according to estimation made by Forrester Research, the global business and government has spent more than 400 billion U.S. dollars in 2013 for IT outsourcing and hardware maintenance.
		And these figures are expected to grow over the next few years. For instance, the global market size of IT healthcare outsourcing has been estimated to grow from 35 billion U.S. dollar in 2013 to 50 billion U.S. dollar in 2018.

25.1 Importance of Project Procurement Management