Burlingame, Aug. 14, 2023 (GLOBE NEWSWIRE) -- Procurement Outsourcing Market, By Service Type (Category Management, Supplier Management, Strategic Sourcing, Transactional Procurement, Contract Management, Vendor Management, Others), By Industry Vertical (Manufacturing, Retail and Consumer Goods, Healthcare, IT and Telecom, BFSI (Banking, Financial Services, and Insurance), Energy and Utilities, Transportation and Logistics, Others), By Organization Size (Small and Medium-sized Enterprises (SMEs), Large Enterprises, ), By Service Model (Onshore Outsourcing, Offshore Outsourcing, Nearshore Outsourcing), By End-User (Manufacturing Companies, Retailers, Healthcare Providers, IT and Telecom Companies, Financial Institutions, Others), - Size, Share, Outlook, and Opportunity Analysis, 2023 – 2030,” According to the report, the global procurement outsourcing market is estimated to be valued at US$ 5.15 billion in 2022 and is expected to exhibit a CAGR of 11.7% during the forecast period (2023-2030).
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Analysts’ Views on Global Procurement Outsourcing Market
Procurement outsourcing, also known as procurement business process outsourcing (BPO), is the practice of delegating various aspects of the procurement process to third-party service providers. Procurement outsourcing is a third-party service used to take care all the businesses' needs during a procurement process, from identifying suitable suppliers to integrated supply chain management. Procurement outsourcing, or procurement BPO, is a strategic approach that allows companies to focus on their core competencies while benefiting from the specialized expertise and resources of external partners. Procurement outsourcing helps businesses to quickly ramp up (and/or down) the procurement teams to match rapidly changing market needs.
Key Trends and Analysis of the Global Procurement Outsourcing Market:
Increased adoption of novel/advanced technologies is one of the key trends expected to propel the growth of the global procurement outsourcing market. For instance, organizations across the globe are adopting advanced technologies, such as Artificial Intelligence (AI), Machine Learning (ML), blockchain, cloud-based platforms/solutions, and robotic process automation (RPA) to streamline or automate procurement processes. Third-party service providers are adopting these technologies to improve their flexibility, scalability, and reduce overall cost of the business operation. They are also incorporating these technologies to deliver more value to their clients. This trend is expected to continue over the forecast period, driving the market growth.
Global Procurement Outsourcing Market – Drivers
Increasing focus on strategic procurement to drive market growth
Strategic procurement is a long-term, enterprise-wide process that aims to ensure necessary goods or services, of the right quality and the right price, are procured on time to meet demand. Strategic procurement helps reduce supply risk and emphasizes on an enterprise's long-term development. In September 2022, GEP, a procurement and supply chain service company, expanded its presence with the launch of a New Office in Abu Dhabi, working with several Middle Eastern clients in the fields of aviation, consumer packaged goods, energy, financial services, and oil and gas sectors for procurement software services. This in turn is expected to propel the market growth.
Procurement Outsourcing Market Report Coverage
| Report Coverage | Details | |||
| Base Year: | 2022 | Market Size in 2023: | US$ 5.15 Bn | |
| Historical Data for: | 2017 to 2021 | Forecast Period: | 2023 - 2030 | |
| Forecast Period 2023 to 2030 CAGR: | 11.7% | 2030 Value Projection: | US$ 11.17 Bn | |
| Geographies covered: |
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| Segments covered: |
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| Companies covered: | 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.) | |||
| Growth Drivers: |
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| Restraints & Challenges: |
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Growing need for cost savings to augment the market growth
Outsourcing procurement helps in improving the efficiency of procurement processes. Companies can free up internal resources and focus on core business activities, improving overall efficiency and reducing costs. Outsourcing BPO also help lower overhead costs. The outsourced procurement can mean cost reduction, improved efficiency, improved compliance, and enhanced performance. In July 2021, Wipro Limited launched FieldX, a cloud-based end-to-end digital service lifecycle automation solution built on ServiceNow’s Now Platform. Manufacturing organizations can now enhance and scale-up their after-sales customer service operations while reducing costs.
Global Procurement Outsourcing Market – Restrain
Data security and privacy concerns to hinder market growth
One of the key factors expected to hamper growth of the global procurement outsourcing market is the data security and privacy concerns. Procurement outsourcing help companies reduce costs, improve overall efficiency, and focus on their core capabilities. However, it also comes with some challenges and risks, such as data security and privacy, as outsourcing involves sharing data with third-party service providers. Organizations may have concerns about data security, privacy, and/ compliance with regulations, especially during the outsourcing. Thus, data privacy regulations are necessary to mitigate these concerns.
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Global Procurement Outsourcing Market – Opportunities
High demand for procurement outsourcing services or ERP solutions is expected to offer lucrative growth opportunities for players in the global procurement outsourcing market. Companies across the world are outsourcing their business processes to the third-party service providers to focus on core capabilities. For instance, in May 2023, Sourceability announced Sourcengine Order API, an update to Sourcengine's Application Program Interface (API). An innovative tool allows enterprise resource and material requirement planning (ERP/MRP) functions to streamline the procurement process and reach thousands of suppliers globally.
Global Procurement Outsourcing Market - Key Developments
In June 2021, IBM announced IBM z/OS V2.5 the next-generation operating system (OS) for IBM Z designed to accelerate client adoption of hybrid cloud and Artificial Intelligence (AI) and drive application modernization projects.
Key Market Takeaways:
Global procurement outsourcing market is expected to exhibit a CAGR of 11.7% during the forecast period. The global procurement outsourcing market is growing rapidly in response to the increasing adoption of procurement outsourcing by small and medium-sized enterprises.
On the basis of Service Type: Strategic Sourcing Segment is expected to dominate the market over the forecast period and this is attributed to the increasing focus on strategic procurement.
On the basis of Industry Vertical: Manufacturing Segment is expected to dominate the market over the forecast period and this is attributed to the rapid growth of the manufacturing industry or increasing number of manufacturing activities.
On the basis of Organization Size: Small and Medium-sized Enterprises (SMEs) Segment is expected to dominate the market over the forecast period and this is attributed to the increasing adoption of procurement outsourcing by SMEs.
On the basis of Service Model: Onshore Outsourcing Segment is expected to dominate the market during the forecast period and this is attributed to the growing trend of outsourcing.
On the basis of End-User: Manufacturing Companies Segment is expected to dominate the market during the forecast period and this is attributed to the rapid growth of the Manufacturing Industry and increasing adoption of procurement outsourcing in manufacturing.
On the basis of Geography, North America is expected to hold a dominant position over the forecast period owing to increasing adoption of novel or advanced technologies, growing need for cost savings, and increasing adoption of procurement outsourcing in the region.
Competitive Landscape:
Key players operating in the global procurement outsourcing market include Accenture Plc, IBM Corporation, GEP Worldwide, Infosys Limited, Capgemini SE, Wipro Limited, Genpact Ltd., WNS (Holdings) Limited, HCL Technologies Ltd., Tata Consultancy Services Limited, Xchanging Solutions Limited, Corbus, LLC, Proxima Group, Aquanima, CA Technologies (Broadcom Inc.), among others.
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Detailed Segmentation:
- Global Procurement Outsourcing Market, By Service Type:
- Category Management
- Supplier Management
- Strategic Sourcing
- Transactional Procurement
- Contract Management
- Vendor Management
- Others
- Global Procurement Outsourcing Market, By Industry Vertical:
- Manufacturing
- Retail and Consumer Goods
- Healthcare
- IT and Telecom
- BFSI (Banking, Financial Services, and Insurance)
- Energy and Utilities
- Transportation and Logistics
- Others
- Global Procurement Outsourcing Market, By Organization Size:
- Small and Medium-sized Enterprises (SMEs)
- Large Enterprises
- Global Procurement Outsourcing Market, By Service Model:
- Onshore Outsourcing
- Offshore Outsourcing
- Nearshore Outsourcing
- Global Procurement Outsourcing Market, By End User:
- Manufacturing Companies
- Retailers
- Healthcare Providers
- IT and Telecom Companies
- Financial Institutions
- Others
- Global Procurement Outsourcing Market, By Region:
- North America
- By Country:
- U.S.
- Canada
- By Country:
- Latin America
- By Country:
- Brazil
- Mexico
- Argentina
- Rest of Latin America
- By Country:
- Europe
- By Country:
- Germany
- U.K.
- France
- Italy
- Spain
- Russia
- Rest of Europe
- By Country:
- Asia Pacific
- By Country:
- China
- India
- Japan
- Australia
- South Korea
- ASEAN
- Rest of Asia Pacific
- By Country:
- Middle East & Africa
- By Region:
- Middle East
- Africa
- By Region:
- North America
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