February 25, 2024

The Growing Procurement Outsourcing Market Is Driven By The Increasing Focus On Core Business Operations

Procurement outsourcing involves the process of delegating procurement activities such as supplier selection, vendor management, purchase order processing, spend analysis and contract management to a third-party service provider. This enables companies to focus on their core business competencies while leveraging expertise of outsourcing partners to enhance strategic sourcing efforts. Procurement outsourcing helps in streamlining procurement processes, optimizing costs, ensuring compliance and boosting supplier negotiation abilities of organizations. The global procurement outsourcing market offers significant benefits such as reduced procurement costs through economies of scale, access to advanced sourcing technologies, higher transaction volume discounts and on-demand talent for handling sourcing events.

The global Procurement Outsourcing Market is estimated to be valued at US$ 5 Billion in 2023 and is expected to exhibit a CAGR Of 6.5% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

 

Strategic collaboration between client firms and service providers has emerged as one of the prominent trends in the procurement outsourcing industry. Leading procurement outsourcing companies are focusing on collaborative engagement models that involve active consultation and co-creation with client procurement teams to better understand business objectives and requirements. This enables outsourcing partners to design and implement customized procurement solutions leveraging client specific industry knowledge and internal expertise. Strategic collaborations allow outsourcing firms to move beyond traditional transactional outsourcing models towards transforming procurement into a strategic function for their clients.

Porter’s Analysis

Threat of new entrants: Low. Established players have strong brand recognition and economies of scale which make market entry difficult.

Bargaining power of buyers: High. Buyers have several procurement solution providers to choose from.

Bargaining power of suppliers: Low. Procurement outsourcing providers have global networks and capabilities.

Threat of new substitutes: Low. No viable substitutes exist for specialized procurement outsourcing services.

Competitive rivalry: High. Intense competition between key players to gain client market share.

Key Takeaways

The Global Procurement Outsourcing Market Demand is expected to witness high growth. The global Procurement Outsourcing Market is estimated to be valued at US$ 5 billion in 2023 and is expected to exhibit a CAGR of 6.5% over the forecast period 2023 to 2030.

Regional analysis North America region holds the largest market share currently mainly due to strong presence of procurement outsourcing vendors. However, Asia Pacific region is anticipated to offer lucrative growth opportunities with growing adoption across countries like China and India.

Key players operating in the Procurement Outsourcing Market are Accenture, GEP, Genpact, WNS, Infosys, Capgemini. Key players focus on expanding their service offerings and global footprint through mergers and acquisitions to strengthen their market position.

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