The procurement as a service market utilizes sourcing event management, spend management and procurement processing functions as services delivered through cloud-based models. Procurement as a service model helps businesses focus on core activities by outsourcing non-core procurement functions. It enables optimizing procurement processes and reducing costs for businesses.
The Global Procurement as a Service Market is estimated to be valued at US$ 15.12 Bn in 2024 and is expected to exhibit a CAGR of 11% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the procurement as a service market are Accenture plc, Aegis One Consults Ltd, CA Technologies, Capgemini, Corbus India LLP, F-code, GEP, Genpact, HCL Technologies Limited, IBM Corporation, Infosys Limited, Proxima Group, Simfoni Limited, Tata Consultancy Services (TCS), Wipro. Key players are focusing on strategic partnerships and acquisitions to expand their market presence.
The market provides several opportunities such as need for strategic sourcing and procurement across industries, cost reduction capabilities and improved efficiencies. Growth in adoption of sourcing event management and procurement processing as a service are providing impetus to the market.
Globally, the Asia Pacific procurement as a service market is expected to grow at the highest CAGR during the forecast period owing to rapid digitalization and adoption of cloud technologies across industries in emerging economies of the region.
Market Drivers
One of the key drivers for the procurement as a service market is cost reduction. Procurement as a service helps businesses optimize costs by leveraging the best procurement practices, economies of scale and expert resources of service providers at competitive pay-as-you-go pricing models. Outsourcing procurement functions helps minimizing additional personnel and infrastructure costs. This drives the adoption of procurement as a service significantly among businesses.
PEST Analysis
Political: Tech companies offering procurement services must comply with all government regulations relating to data privacy and security. They also need to ensure their solutions promote transparency for all parties involved in procurement processes.
Economic: Volatility in global trade policies and economic growth could impact demand for procurement-as-a-service solutions from different industries. However, cost reduction benefits are driving more companies to adopt cloud-based procurement platforms.
Social: Greater workforce mobility and virtual collaboration are promoting the use of centralized digital platforms for sourcing suppliers and managing procurement processes remotely. Cloud services also provide flexibility and accessibility from any location.
Technological: Advancements in AI, blockchain, analytics and cloud computing are enabling the development of advanced procurement platforms capable of automating tasks, managing complex supply chains and gaining insights from large datasets. Integrations with other business tools are also improving.
Geographic Concentration
While procurement services are utilized globally, some key regional markets where adoption and spend is currently concentrated include North America, Western Europe and parts of Asia Pacific like China, Japan and Australia. This is due to high digitization across major industry verticals and presence of large enterprises with complex sourcing needs in these developed markets.
Fastest Growing Region
Some emerging markets in Asia Pacific and Latin America are expected to see the fastest growth in procurement-as-a-service adoption over the coming years driven by expanding digital transformation budgets. Countries like India, Indonesia, Brazil and Mexico are prioritizing cloud migration and are witnessing rising outsourcing of non-core functions by global firms looking to cut costs, driving increased demand for external procurement solutions.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)