February 22, 2024
Procurement Outsourcing Market
Ict

Global Procurement Outsourcing Market Is Estimated To Witness High Growth Owing To Rising Demand for Cost Optimization

The Procurement Outsourcing market is estimated to be valued at US$ 5.15 billion in 2023 and is expected to exhibit a CAGR of 11.7% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

The Procurement Outsourcing market primarily involves the transfer of procurement processes to a third-party service provider who specializes in sourcing and procurement activities. This allows organizations to optimize their procurement operations, reduce costs, and focus on their core competencies. The market offers a wide range of services, including strategic sourcing, supply chain management, category management, and supplier relationship management. The increasing demand for cost optimization and the need to enhance operational efficiency are driving the adoption of procurement outsourcing services across various industries.

Market Dynamics:

The growth of the Procurement Outsourcing market can be attributed to two key drivers. Firstly, organizations are increasingly realizing the benefits of outsourcing procurement activities, including cost reduction, improved operational efficiency, and access to specialized expertise. This is driving the demand for procurement outsourcing services. Secondly, the growing focus on core competencies and the need for organizations to streamline their operations are compelling them to outsource non-core functions such as procurement. This further fuels the growth of the procurement outsourcing market.

SWOT Analysis:

  • Strength:
    • The procurement outsourcing market is expected to witness high growth, exhibiting a CAGR of 11.7% over the forecast period, driven by the increasing adoption of outsourcing services by organizations to reduce costs and improve operational efficiency.
  • Weakness:
    • One weakness of the procurement outsourcing market is the potential risk of data breaches and security concerns associated with sharing sensitive procurement information with third-party service providers.
    • Another weakness is the challenge of effectively managing and coordinating procurement processes across multiple vendor relationships, which can lead to complexities and potential inconsistencies in service delivery.
  • Opportunity:
    • An opportunity for the procurement outsourcing market lies in the growing trend of digital transformation, which presents the potential for automation and optimization of procurement processes through technologies such as artificial intelligence, machine learning, and robotic process automation.
    • The increasing focus on sustainable procurement practices and corporate social responsibility opens up opportunities for procurement outsourcing service providers to offer expertise in environmental, social, and governance (ESG) criteria integration into supply chain management.
  • Threats:
    • One threat to the procurement outsourcing market is the potential backlash and resistance from employees and trade unions who may perceive outsourcing as a threat to job security and stability.
    • Another threat is the risk of geopolitical uncertainties and trade wars, which can disrupt global supply chains and impact the demand for procurement outsourcing services.

Key Takeaways:

The Global Procurement Outsourcing Market Growth is expected to witness significant, with a CAGR of 11.7% over the forecast period. This growth is driven by the increasing adoption of outsourcing services by organizations to reduce costs and improve operational efficiency. The market also presents opportunities for innovation through digital transformation and sustainable procurement practices. In terms of regional analysis, North America is expected to be the fastest-growing and dominating region in the procurement outsourcing market, attributed to the presence of major key players and the increasing adoption of outsourcing solutions in the region. Key players operating in the procurement outsourcing market include Accenture Plc, IBM Corporation, GEP Worldwide, Infosys Limited, and Capgemini SE, among others.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it