Procurement Outsourcing Services Market Size, Share, Growth, and Industry Analysis, By Type (Category Management, Source Management, Procurement Management, and Supplier Management), By Application (BFSI (Banking, Financial Services, and Insurance), Energy and Utilities, Healthcare, IT and Telecom, and Other) and Regional Forecast to 2032

Updated On: 29 April 2024

PROCUREMENT OUTSOURCING SERVICES MARKET REPORT OVERVIEW

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global procurement outsourcing services market size was USD 2872240 million in 2019 and market is projected to touch USD 7928815.3 Million by 2032, exhibiting a CAGR of 8.1% during the forecast period.

The Procurement Outsourcing Services market has witnessed significant growth in recent years, driven by the increasing complexity of global supply chains and the growing emphasis on cost optimization and operational efficiency among businesses. Organizations across various industries are turning to procurement outsourcing providers to streamline sourcing processes, manage supplier relationships, and mitigate supply chain risks. One emerging trend in the procurement outsourcing landscape is the integration of advanced technologies such as artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA) to enhance procurement operations. These technologies enable predictive analytics for demand forecasting, automate repetitive tasks, and provide actionable insights for strategic decision-making. Additionally, the shift towards cloud-based procurement solutions offers scalability, flexibility, and accessibility, enabling organizations to adapt to changing market dynamics and drive digital transformation initiatives.

Another key driver of the market is the increasing focus on sustainability and corporate social responsibility (CSR) among businesses. As environmental concerns and ethical considerations gain prominence, companies are seeking procurement partners with expertise in sustainable sourcing practices, supplier diversity, and ethical supply chain management. Procurement outsourcing providers play a crucial role in helping organizations identify environmentally friendly suppliers, adhere to regulatory requirements, and implement responsible procurement policies. Moreover, the integration of sustainability criteria into procurement processes not only reduces environmental impact but also enhances brand reputation and fosters long-term stakeholder relationships. As businesses strive to achieve sustainability goals and address societal expectations, the demand for procurement outsourcing services that align with ethical and environmental standards is expected to drive further growth in the market.

COVID-19 Impact: Market Growth Hindered by Pandemic due to Disruptions across The Supply Chain

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to market’s growth and demand returning to pre-pandemic levels.

The COVID-19 pandemic has had a significant impact on the procurement outsourcing services market share. With businesses grappling with economic uncertainties and disruptions in supply chains, the demand for procurement outsourcing services fluctuated. Initially, the widespread lockdowns and travel restrictions led to a slowdown in procurement activities across industries. Companies faced challenges in sourcing materials and managing supplier relationships, affecting the need for outsourcing procurement functions.

LATEST TRENDS

"Integration of Artificial Intelligence (AI) and Machine Learning (ML) in Procurement to Drive Market Growth"

A notable trend in the market is the increasing integration of Artificial Intelligence (AI) and Machine Learning (ML) technologies. Companies are leveraging AI-powered platforms and ML algorithms to enhance spend analysis, supplier identification, and contract management processes. These technologies enable predictive analytics, allowing organizations to optimize procurement strategies, identify cost-saving opportunities, and mitigate supply chain risks proactively. Moreover, AI and ML facilitate automation of repetitive tasks, improving operational efficiency and freeing up procurement professionals to focus on strategic initiatives. The trend towards AI and ML integration reflects the industry's pursuit of data-driven insights and digital transformation to drive competitive advantage in the procurement landscape.

PROCUREMENT OUTSOURCING SERVICES MARKET SEGMENTATION

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• By Type

Based on type the global market can be categorized into with Category Management, Source Management, Procurement Management, and Supplier Management.

Category Management involves the strategic management of product categories to optimize procurement processes and drive cost savings. Source Management focuses on identifying and selecting suppliers/vendors to fulfill organizational requirements, negotiating contracts, and managing supplier relationships. Procurement Management encompasses the end-to-end procurement process, including requisition, purchase order management, and invoice processing, aimed at streamlining purchasing activities and ensuring compliance with procurement policies. Supplier Management involves the evaluation, performance monitoring, and development of supplier/vendor partnerships to enhance supply chain resilience and mitigate risks. Each segment offers distinct services tailored to meet the specific procurement needs and objectives of clients across various industries.

• By Application

Based on application the global market can be categorized into BFSI, Energy and Utilities, Healthcare, IT and Telecom, and Other.

In the BFSI sector, outsourcing services are sought to optimize procurement processes, manage vendor relationships, and ensure compliance with regulatory requirements. Energy and Utilities companies rely on outsourcing partners to streamline procurement operations, source materials, and equipment for infrastructure projects, and minimize procurement costs. Healthcare organizations leverage procurement outsourcing to streamline medical supplies sourcing, manage inventory, and enhance cost efficiencies while maintaining quality standards. Similarly, the IT and Telecom sector outsources procurement functions to drive innovation, optimize IT spending, and enhance supply chain agility. Other industries, including manufacturing, retail, and hospitality, also benefit from outsourcing services to address procurement challenges, improve operational efficiency, and focus on core business activities. Each application segment represents unique opportunities and challenges for procurement outsourcing providers to deliver value-added solutions and support the strategic objectives of their clients.

DRIVING FACTORS

"Cost Optimization and Operational Efficiency to Boost the Market"

One of the primary driving factors for the market is the increasing focus on cost optimization and operational efficiency. Businesses across sectors are under pressure to reduce procurement costs while enhancing process efficiency and agility. Outsourcing procurement functions to specialized service providers offers cost-saving benefits through economies of scale, access to expertise, and streamlined processes. Additionally, outsourcing enables organizations to leverage technology-driven solutions for improved spend visibility, supplier collaboration, and risk management, driving operational excellence in procurement operations.

"Globalization and Supply Chain Complexity to Expand the Market"

The globalization of markets and supply chain complexity serve as significant drivers for the market. As businesses expand globally and engage with an extensive network of suppliers and vendors, managing procurement processes becomes increasingly complex. Outsourcing procurement functions helps companies navigate the intricacies of global supply chains, mitigate geopolitical risks, and ensure compliance with regulatory requirements. Moreover, outsourcing providers offer localized expertise and market insights, enabling organizations to optimize sourcing strategies, minimize lead times, and capitalize on emerging market opportunities.

RESTRAINING FACTORS

"Data Security and Privacy Concerns to Potentially Impede Market Growth"

Despite the growing demand, the market faces a restraining factor in the form of data security and privacy concerns. Outsourcing critical procurement functions involves sharing sensitive business information and supplier data with third-party service providers. Ensuring the confidentiality, integrity, and availability of data poses challenges in a landscape plagued by cybersecurity threats and regulatory compliance requirements such as GDPR and CCPA. Organizations must establish robust data governance frameworks, implement encryption and access controls, and conduct regular audits to address security vulnerabilities and safeguard sensitive procurement information.

PROCUREMENT OUTSOURCING SERVICES MARKET REGIONAL INSIGHTS

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The market is primarily segregated into Europe, Latin America, Asia Pacific, North America, and Middle East and Africa.

"Asia Pacific Region Dominating the Market due Increasing Adoption of Digital Technologies in the Region"

Asia Pacific is expected to be the highest procurement outsourcing services market growth. The rapid economic growth, burgeoning manufacturing sector, and increasing adoption of digital technologies in countries such as China, India, and Southeast Asia are driving the demand for outsourcing procurement functions. Businesses in APAC are embracing outsourcing as a strategic imperative to optimize costs, access global talent pools, and capitalize on emerging market opportunities. Moreover, the region's diverse supply chain ecosystem and dynamic business environment create fertile ground for procurement outsourcing services to thrive and innovate.

KEY INDUSTRY PLAYERS

"Key Industry Players Shaping the Market through Innovation and Market Expansion"

The Procurement outsourcing services market is significantly influenced by key industry players that play a pivotal role in driving market dynamics and shaping consumer preferences. These key players possess extensive retail networks and online platforms, providing consumers with easy access to a wide variety of wardrobe options. Their strong global presence and brand recognition have contributed to increased consumer trust and loyalty, driving product adoption. Moreover, these industry giants continually invest in research and development, introducing innovative designs, materials, and smart features in cloth wardrobes, catering to evolving consumer needs and preferences. The collective efforts of these major players significantly impact the competitive landscape and future trajectory of the market.

List of Market Players Profiled

• Accenture (Ireland)
• GEP (U.S)
• Genpact (U.S)
• Aquanima (Spain)
• Optimum Procurement (UK)
• Corbus (U.S)
• Wipro (India)
• Infosys (India)
• HCL Technologies (India)

INDUSTRIAL DEVELOPMENT

June 2021: The latest industrial development in the market is the emergence of Blockchain-enabled procurement platforms. These platforms leverage distributed ledger technology to enhance transparency, traceability, and trust in procurement processes. Blockchain enables secure and immutable recording of transactions, contracts, and supplier data, reducing the risk of fraud, errors, and disputes in procurement operations. Moreover, blockchain-based procurement platforms facilitate decentralized supplier networks, smart contracts, and real-time visibility into supply chain activities, fostering collaboration and efficiency across the procurement ecosystem. The launch of blockchain-enabled procurement platforms represents a paradigm shift in procurement outsourcing, offering unprecedented levels of security, efficiency, and integrity in procurement transactions and supplier relationships.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated timeframe. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.