The global procurement as a service market size was valued at USD 7.38 Billion in 2022 and is expected to reach USD 14.03 Billion by 2031, expanding at a CAGR of 7.4% during, 2023-2031. The growth of the market is attributed to the rising penetration of innovative technologies along with increasing requirement for developing procurement function across various industries.
Procurement refers to an act of achieving products or services for business purposes. The procurement as a service is a type of procurement business model which uses a combination of expertise to manage the procurement function of a company with the help of technology and staff. Rising demand for procurement and outsourcing functions along with track payments and purchases are key aspect for growing adoption of digital technology across several industries.
The service is widely adopted for transactional procurement and is offering reporting portal to their consumers for ensuring the transparency in the process. One key aspect of the service is that the operational cost of using procurement can be minimal as it helps in the processes such as strategic outsourcing to become predictive and supplier management to become proactive. With the growing awareness for procurement process among businesses, numerous service providers are continuously adding efforts to approach their business offerings to the ‘as-a-service’ model.
Consumers are increasingly more aware about the improved procurement functions in their respective business and are examining suppliers that provide strong procurement service model. Tradeshift and SAP are the well-known suppliers of procurement technology, which are helping to build individual suppliers’ network and e-procurement solutions.
Hence, consumers can avail certain benefits such as reduction in time to access to market or products by implementing e-procurement solutions. One of the major developments in the procurement transformation process is the use of intelligent automation as it helps achieve effective digitalization and reinventing processes. Thus, this helps to improve the experience of consumers along with enhanced and efficiency service.
Procurement As A Service Market Trends, Drivers, Restraints, and Opportunities
- Rising demand for solutions to reduce the cost regarding procurement operations and streamline procurement processes among the enterprises are estimated to propel the market growth.
- Increasing adoption of procurement as a service to improve user experience and fulfill consumer’s expectation are projected to expand the market growth.
- Growing penetration of advanced technologies across various industry verticals to boost or enhance procurement function are key drivers for the market development.
- Factors such as supply risk, delivery risk, quality issues, high cost, and other such market risks are the major challenges that may hinder the market growth during the forecast period.
- Rapid access to Internet of Things (IoT) platforms by machine learning and incorporating artificial intelligence (AI) to identify and resolve the errors in fleet management and shipment tracking provide better analytics solution. This is expected to generate numerous opportunities for the market expansion.
Scope of Procurement As A Service Market Report
The report on the global procurement as a service market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
Procurement As A Service Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
Components (Category Management, Contract Management, Process Management, Spend Management, Strategic Sourcing, and Transaction Management), Organizations (Large Enterprises and SMEs), and Verticals (BFSI, Healthcare, IT & Telecom, Manufacturing, and Retail)
Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
Key Players Covered in the Report
Tata Consultancy Services Limited, Infosys, IBM, Aegis, Accenture, HCL Technologies Ltd., Genpact, GEP, Wipro, and WNS (Holdings) Ltd
Procurement As A Service Market Segment Insights
Components Segment Analysis
Based on components, the market is segmented into category management, contract management, process management, spend management, strategic sourcing, and transaction management. The strategic sourcing segment is anticipated to account for a large market share in the coming years owing to the rising implementation of strategic sourcing among various organizations for effective execution of their sourcing strategies and saving money. Strategic sourcing helps the businesses as it provides update information about a company’s external expenditure by using external expenditure data.
On the other hand, the category management segment is expected to account a considerable CAGR during the forecast period due to its increasing demand from several industries as it helps to deal with the direct supervision of each unit of an organization and their expenditures. It ensures compliance with managing contracts and governing procurement for each category, helping to resolve suppliers’ problems and monitor their performance.
Organizations Segment Analysis
On the basis of organizations, the procurement as a service market is bifurcated into large enterprises and SMEs. The large enterprises segment is expected to account for a large market share during the analysis years owing to the growing demand for procurement as a service to manage complex procurement contracts from large business organizations.
Large enterprises are rapidly adopting towards procurement as a service to minimize the operational costs and reduce their complexities. However, the SMEs segment is projected to exhibit a robust CAGR during the forecast period owing to the increasing awareness about the use of procurement as a service to reduce spending related to the technological installations and staff recruitments among small and medium business organizations.
Verticals Segment Analysis
Based on verticals, the market is classified into BFSI, healthcare, it & telecom, manufacturing, and retail. The manufacturing segment is anticipated to constitute a key market share during the coming years owing to the increasing demand for cost effectiveness in the supply chain of the manufacturing industries. The manufacturing vertical is one of the key adopters of procurement outsourcing across the non-core expenditure, which helps to expand the segment growth.
Meanwhile, the retail segment is projected to register a substantial growth rate during the forecast period owing to rising needs to create an effective customer-oriented atmosphere. The service is widely adopted in the retail sector since the procurement helps to deal with processes such as negotiation of contracts, established payment terms, actual purchasing of goods, and selective vendors. The adoption of procurement process in the retail sector supports streamlining of processes with maximizing return of investment.
In terms of regions, the global procurement as a service market is categorized as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to account a large market share in the coming years owing to the early adoption of advanced technology and increasingly use of procurement service as a management solution across industries in the region.
The market in Europe is projected to register substantial growth during the forecast period owing to the growing awareness about the streamlining of supply chain processes in this region. Latin America is estimated to exhibit a substantial CAGR during the analysis period owing to the rising number of enterprises which are largely adopting procurement as a service for transforming their businesses.
For instance, SAP Ariba, is one of the major B2B networks across the globe. Grupo Lala, in Mexico, is one of the major dairy enterprises in the country, which is using Ariba Network along with a range of cloud-based applications to computerize the tracking process, negotiates optimal contracts, and obtain clear visibility about spending across all units.
The global procurement as a service market has been segmented based on
- Category Management
- Contract Management
- Process Management
- Spend Management
- Strategic Sourcing
- Transaction Management
- IT & Telecom
- Asia Pacific
- North America
- Latin America
- Middle East & Africa
- Tata Consultancy Services Limited
- HCL Technologies Ltd.
- WNS (Holdings) Ltd.
Some major players competing in the global procurement as a service market include Tata Consultancy Services Limited, Infosys, IBM, Aegis, Accenture, HCL Technologies Ltd., Genpact, GEP, Wipro, and WNS (Holdings) Ltd. These prominent market players are actively involved in various market strategies to offer customized and diverse procurement solutions that can cater to the requirements of consumers.
Leading companies such as Accenture, Infosys, GEP, WNS (Holdings) Ltd., and Genpact are implementing strategies such as mergers and acquisitions consistently to expand their geographical reach as well to gain a large market share.For instance,
- In November 2018, Accenture acquired Intrigo Systems, a supplier of consultative and frameworks integration services for cloud solutions and SAP works in e-commerce, procurement, and store network. The acquisition was a key strategic action to strengthen Accenture’s portfolio in offering ventures with procurement transformation and supply network.
- In January 2019, Accenture introduced SynOps, an AI operated motor which uses innovative analytics, data, and deep learning to allow companies to achieve insightful operations across key business capabilities including procurement, accounting and finance, and marketing.