July 25, 2024

Expanding Digital Transformation Opportunities Are Anticipated To Open Up The New Avenue For Procurement Outsourcing Market

The Procurement Outsourcing Market is estimated to be valued at Us$ 5.15 Bn or Mn in 2023 and is expected to exhibit a CAGR Of 11% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

Procurement outsourcing includes outsourcing various indirect and direct procurement activities to third-party procurement service providers. This helps enterprises to focus on their core operations by outsourcing non-core procurement activities. Procurement outsourcing services include sourcing management, supplier management, procurement administration and contracts management. Industries such as manufacturing, retail, healthcare, banking & financial services widely adopt procurement outsourcing.

Market Dynamics:

The growth of the procurement outsourcing market is driven by the key factors such as cost reduction, expertise access, scalability, and risk mitigation. Procurement outsourcing helps enterprises to reduce procurement costs by leveraging expertise and economies of scale of procurement service providers. Outsourcing procurement activities enables enterprises to focus on core business operations while benefitting from procurement expertise of third-party service providers. Further, outsourcing procurement provides scalability and flexibility to enterprises without committing large investments in procurement infrastructure and resources. It also helps to mitigate procurement risks and compliance issues by transferring them to well-equipped procurement outsourcing providers.

Segment Analysis

The procurement outsourcing market is dominated by the strategic sourcing segment due to increasing focus of organizations on reducing procurement costs and managing supplier relationships effectively. Strategic sourcing helps companies make well-informed procurement decisions, optimize spending and manage risks by leveraging expertise of outsourcing partners.

PEST Analysis

Political: Favorable government initiatives promoting outsourcing in various countries are boosting market growth. For example, productivity-linked incentive schemes in India support outsourcing industry.

Economic: Growing economic activities and global trade are increasing procurement volumes, driving need for outsourcing. Developing economies offering lucrative pricing is attracting outsourcing.

Social: Changing social media usage patterns influence procurement. Digital socially-responsible procurement mandates are gaining prominence.

Technological: Advancements like AI, blockchain, analytics are enhancing outsourcing partner capabilities to manage complex supply networks and leverage big data.

Key Takeaways

The Global Procurement Outsourcing Market Demand is expected to witness high growth, exhibiting CAGR of 11. over the forecast period, due to increasing need to optimize procurement operations and reduce costs.

The Asia Pacific region is expected to be the fastest growing market for procurement outsourcing during the forecast period. This growth can be attributed to the availability of low-cost skilled labor and encouragement by governments in the region to promote outsourcing industry.

Key players operating in the procurement outsourcing market are Accenture Plc, IBM Corporation, GEP Worldwide, Infosys Limited, Capgemini SE, Genpact Ltd., WNS (Holdings) Limited, HCL Technologies Ltd., Wipro Limited, Tata Consultancy Services Limited, Xchanging Solutions Limited, Corbus, LLC, Proxima Group, Aquanima, CA Technologies (Broadcom Inc.). These players are focusing on new service offerings integrated with analytics and digital technologies to strengthen their market position.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it