Definition of Procurement Outsourcing

Procurement outsourcing is a technique of managing and acquiring raw materials which are important for manufacturing of a product or supplying a specific service such as such as sourcing, category management, transaction management, or a combination of some or all of them. Procurement outsourcing helps in passing the important information to third party vendors. In addition, the information includes the actual order and payment of services and products. Moreover, it provides major benefits in the form of skilled experts with lower cost for the business operations.

Global Procurement Outsourcing Market: Key Insights

Global Procurement Outsourcing Market Highlights Over 2023 - 2035

The global procurement outsourcing market is estimated to garner a revenue of USD 14 Billion by the end of 2035 by growing at a CAGR of ~14% over the forecast period, i.e., 2023 – 2035. Further, the market generated a revenue of USD 3 Billion in the year 2023. The growth of the market can be attributed to the rising number of outsourcing business process companies. For instance, more than 33,000 business process outsourcing companies are present in Australia in the year 2022.

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Procurement outsourcing is the transfer of specific procurement activities to a procurement BPO provider, such as sourcing, category management, transaction management, or a combination of some or all of them. As a result, a company that does so can expect to increase its focus on core spend and competencies, lower overall costs, and realize bottom-line savings. Moreover, it provides major benefits in the form of skilled experts with lower cost for the business operations. Hence, rising demand for procurement outsourcing services is expected to boost the growth of the global procurement outsourcing market. More than 50 per cent of the organizations globally has reported IT talent shortage in the year 2022

Global Procurement Outsourcing Market: Growth Drivers and Challenges

Growth Drivers

• Increasing Need to Automate the Business Operations– In order to reduce operational costs and improve efficiency, businesses are automating their business processes to focus on core competencies. Hence, it is anticipated to surge the growth of the global procurement outsourcing market. More than 30 per cent of the companies worldwide have full automated at least one function in the year 2020.

• Rising Investment in Technology Development– There are more than 1 Billion tech startups across the globe in the year 2022.

• Surging Adoption of Artificial Intelligence– The adoption rate of artificial intelligence has been raised to nearly 34 per cent in the year 2022.

• Increasing Urbanization- As per the World Bank, the percentage of the urban population has increased from 54 per cent in 2015 to 57 per cent in 2021.

Challenges

• High Fluctuation of Procuring Outsourced Services

• Lack of Awareness Related to Procurement

• Threat to Data Privacy- Issues related to data privacy and integrity is expected to challenge the market’s growth.

The global procurement outsourcing market is segmented and analyzed for demand and supply by organization size into large, and small & medium organization. Among these, the small & medium organization segment is anticipated to hold the largest share over the forecast period owing to improve the efficiency of the operations as they do not possess the resources to develop a team from scratch. For instance, nearly 25 of the small businesses outsourced their IT and accounting services in order to improve their efficiency.

Global Procurement Outsourcing Market Regional Synopsis

Regionally, the global procurement outsourcing market is studied into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region. Amongst these markets, the market in the North America region is projected to hold the largest market share by the end of 2031 on the back of rapid adoption of procurement outsourcing activities.

Moreover, the market in the Asia Pacific region is anticipated to witness the fastest growth over the forecast period owing to the presence of major adoption of procurement outsourcing in the manufacturing sector. For instance, China’s makes up for more than 25 per cent of the total global output for manufacturing owing to the low cost.

Market Segmentation

Our in-depth analysis of the global procurement outsourcing market includes the following segments:

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Key Companies Dominating the Global Market

Our report has covered detailed company profiling comprising company overview, business strategies, key product offerings, financial performance, key performance indicators, risk analysis, recent developments, regional presence, and SWOT analysis among other notable indicators for competitive positioning. Some of the prominent industry leaders in the global procurement outsourcing market that are included in our report are Capgemini Services SAS, Tata Consultancy Services Limited, Genpact, DXC Technology Company, International Business Machine Corporation, Wipro Limited, WNS (Holdings) Ltd, Accenture PLC, Infosys Limited, IBM Corporation, and others.

Global Procurement Outsourcing Market: Latest Developments

• July, 2022: Infosys announced an agreement to acquire BASE life science in Europe in order to realize the global life sciences companies’ business value from speed-up clinical trials, and scale drug development, cloud-first digital platforms and data, and achieving better health outcomes.

• September, 2022: Accenture PLC announced the acquisition of Sentia’s businesses in Belgium, Bulgaria, and Netherlands that is bolstering the company capabilities to provide end-to-end cloud infrastructure services across private, public and sovereign clouds.

Geography Analysis:

The report further discusses the market opportunity, compound annual growth rate (CAGR) growth rate, competition, new technology innovations, market players analysis, government guidelines, export and import (EXIM) analysis, historical revenues, future forecasts etc. in the following regions and/or countries:

• North America (U.S. & Canada) Market Size, Y-O-Y Growth, Market Players Analysis & Opportunity Outlook
• Latin America (Brazil, Mexico, Argentina, Rest of Latin America) Market Size, Y-O-Y Growth & Market Players Analysis & Opportunity Outlook
• Europe (U.K., Germany, France, Italy, Spain, Hungary, Belgium, Netherlands & Luxembourg, NORDIC(Finland, Sweden, Norway, Denmark), Ireland, Switzerland, Austria, Poland, Turkey, Russia, Rest of Europe), Poland, Turkey, Russia, Rest of Europe) Market Size, Y-O-Y Growth Market Players Analys  & Opportunity Outlook
• Asia-Pacific (China, India, Japan, South Korea, Singapore, Indonesia, Malaysia, Australia, New Zealand, Rest of Asia-Pacific) Market Size, Y-O-Y Growth & Market Players Analysis & Opportunity Outlook
• Middle East and Africa  (Israel, GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman), North Africa, South Africa, Rest of Middle East and Africa) Market Size, Y-O-Y Growth Market Players Analysis & Opportunity Outlook

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