by Procurement outsourcing helps organizations focus on their core business operations by outsourcing procurement activities like supplier management, contract negotiation, purchase order management and many more to third party service providers. This allows organizations to leverage expertise of procurement outsourcing companies to gain cost savings, process efficiencies and ensure compliance.
The global Procurement Outsourcing Market is estimated to be valued at US$ 5.15 billion in 2023 and is expected to exhibit a CAGR of 6.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Increasing focus on core business operations is a key trend fueling growth of the procurement outsourcing market. In a highly competitive business environment, organizations are under constant pressure to optimize costs and improve operational efficiencies. This has driven many organizations to outsource non-core operations like procurement to specialized third-party service providers. These outsourcing companies have dedicated procurement teams and technologies help clients achieve 10-15% reduction in procurement costs. They also ensure adherence to compliance policies and handle supplier negotiation professionally allowing client organizations to focus on and invest more in growing their core offerings and services. This trend is expected to continue driving increased adoption of procurement outsourcing solutions over the forecast period.
SWOT Analysis
Strength: Procurement outsourcing enables companies to focus on their core competencies by outsourcing non-critical procurement functions. It helps reduce procurement costs and improve efficiency.
Weakness: Partial loss of control over procurement processes and reliance on third party for strategic sourcing. Improper vendor management can impact cost savings.
Opportunity: Growht in outsourcing industry and shift towards more strategic procurement roles within organizations. Adoption in emerging markets offers new opportunities.
Threats: Economic slowdowns can impact outsourcing spends. Regulatory changes regarding data localization and protection can limit outsourcing to certain countries.
Key Takeaways
The Global Procurement Outsourcing Market Share is expected to witness high growth. The market size was valued at US$ 5.15 billion in 2024 and is projected to reach US$ 8.30 billion by 2030, registering a CAGR of 6.5% during the forecast period.
Regional analysis comprises North America region currently dominates the procurement outsourcing market and is expected to continue its dominance over the forecast period. This is attributed to presence of major outsourcing vendors and continued focus of organizations in the region on non-core operations. The Asia Pacific region is expected to offer lucrative growth opportunities owing to growing adoption of outsourcing models by companies to reduce operational costs.
Key players operating in the procurement outsourcing market are Accenture, GEP, Genpact, HCL Technologies, IBM, Infosys, Wipro. Major players are focusing on strategic partnerships and mergers to expand their service offerings and geographic presence. They are also investing in analytics and artificial intelligence capabilities to help clients with advanced procurement solutions.
Note:
Source: Coherent Market Insights, Public sources, Desk research
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Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.
