Procurement as a Service Market

Global Procurement as a Service Market Size & Growth (2023-2028)

The global procurement as a service market will expand from $ 5.4 billion in 2022 to $ 7.8 billion in 2028, at a compound annual growth rate (CAGR) of 7.6% over the foreseen period.

Traditionally, the acquisition has been considered behind the scenes, but its professionals have gradually been recognized in recent years. Although the acquisition integrates platforms, for example a platform as a service and software as a service, the acquisition as a service platform is currently in its initial phase. The services provided during purchase as a service include KPO, outsourcing of business procedures (BPO), audit and quality control and supplier management.

Procurement as a Service is an outsourced procurement business model that combines personnel, technology and experience to manage a part or complement the purchasing functions of the user organization. Technology is helping service providers to examine where their customers are spending money and where they are likely to realize potential savings. Purchase-as-a-service offers help end users select categories for procurement and assign category experts to manage purchases for those categories. These services are technology-based for procurement and sourcing, track payments and purchases, and manage tripartite correspondence to ensure that users only pay for what they get. Several suppliers as a service make the whole process visible to the companies they work with, usually via reporting portals.

Recent Developments:

• In January 2019, Accenture launched SynOps, a human-powered engine that leverages data, advanced analytics and artificial intelligence (AI) to help organizations execute smart operations in key business functions. These functions include finance and accounting, marketing and acquisitions.
• In November 2018, Accenture acquired Intrigo Systems, a framework integration and consulting service provider for cloud and SAP solutions, working in e-commerce, the store network and purchasing. The acquisition strengthens Accenture's ability to provide businesses with a purchasing transformation and inventory network.
• In July 2017, Genpact launched an artificial intelligence-based platform, Genpact Cora, which integrates analysis, automation and artificial intelligence engines, in a single, unified platform. The company uses the platform to offer acquisition and inventory network solutions to its customers.
• In January 2017, WNS succeeded Denali Sourcing Services, a provider of business process management (BPM) solutions for strategic purchasing. The acquisition provided strategic category management and procurement capacity following WNS solutions. In addition to current P2P capabilities the acquisition also enables WNS to offer total start to finish S2P solutions for its clients.

Market Growth and Trends:

Strategic sourcing is an essential part of any business, regardless of industry. Strategic sourcing includes analyzing what an organization buys, from whom, at what price, and at what volume. Strategic sourcing involves several activities, including identifying external business expenses, completing the Request for Proposal (RFP) / Request for Quotation (RFQ) process, negotiating prices with suppliers, and implementing contract placements. Strategic sourcing involves finding the balance between the quality of goods and services and their price. Strategic sourcing service providers are experienced in a variety of sourcing activities and offer sourcing as a business services marketplace to streamline your sourcing operations.

Increased global competition and increased consumer demand to induce companies to differentiate themselves from their competitors. Manufacturing companies must offer higher quality at lower prices, newer features, and shorter production times, maintaining a market presence and managing costs effectively. As a result, manufacturing companies are gradually adopting outsourcing of supplies and technology solutions that enable them to streamline their manufacturing processes and realize significant savings. This, in turn, allows them to focus on their areas of competence, such as manufacturing, production and on-time delivery skills. Procurement as a service in manufacturing supports processes such as expense analysis, procurement and category management, supplier management, Procure-to-Pay (P2P) process management, and Source-to-Pay (S2P), as well as supply chain planning and cost management.

Impact of Covid-19 on the Procurement as a Service Market

The COVID-19 epidemic began in Wuhan, China has since spread around the world at a rapid pace. China, Italy, Iran, Spain, the Republic of Korea, France, Germany and the United States are among the countries most affected by this pandemic, in terms of confirmed cases and deaths reported in March 2020. COVID-19 pandemic has affected the economies and industries of many countries due to closings, travel bans and business closings. The overall distribution of purchases as a service market due to COVID-19 also has an impact on the growth of purchases as a service market due to plant closings, disruptions in the supply chain and economic slowdown. The impact of Covid-19 on the electronic value chain is likely to be far-reaching and will strongly affect the parties involved in the manufacturing of semiconductors. COVID-19 highlights potential risks and vulnerability of the current electronics and semiconductor value chain model, and challenges the semiconductor industry to consider modifying its chain model global supply.

Market Drivers and Restraints:

The global procurement-as-a-service market is expected to experience impressive growth during the forecast period. The growing demand from companies to streamline procurement processes and the positive impact of BPO's evolution on outsourcing are the main drivers of the global procurement-as-a-service market. In addition, major technology development initiatives by several major companies are also expected to stimulate demand during the outlook period. However, concerns about data security may slow growth. Despite this limitation, the lucrative opportunities of emerging economies should offer many growth opportunities to actors operating in the procurement-as-a-service market during the foreseen period.

PROCUREMENT AS A SERVICE MARKET REPORT COVERAGE:

Procurement as a Service Market segmentation:

Procurement as a Service Market By Component:

Depending on the components, the procurement as a service market has been segmented into strategic sourcing, expense management, category management, process management, contract management, and transaction management. By component, the strategic supply segment will have the largest market size during the expected period

Procurement as a Service Market By Organization Size:

Depending on the size of the company, the procurement as a service market is segmented into SMEs and large companies.

Procurement as a Service Market By Vertical:

Depending on the vertical, the market is segmented into IT and telecommunications, consumer goods and retail, manufacturing, energy and public services, healthcare, hotels and tourism, etc. Of these, manufacturing is expected to maintain the largest market size during the evaluation period

Regional Analysis:

North America had the largest share of the global procurement as a service market in 2019. It contributed more than 30% to total revenue in 2019. Asia Pacific and Europe ranked second and third respectively in the global procurement as a service market in 2019. The Asia Pacific market is foreseen to expand with a CAGR of 7.6% between 2020 and 2027.

Key players in the market:

Product development is a common strategy for companies to expand their product portfolio. Accenture, Infosys Ltd., CAPGEMINI SE and IBM Corporation are among the market players implementing this strategy to expand the customer base and gain significant market share on a global scale, allowing them to maintain their brand in the market.

The key players which are operating in the global procurement as a service merchant includes Proxima (UK), Genpact (US), WNS (India), Capgemini (France), IBM (US), HCL Technologies (India), Infosys (India), Accenture (Ireland), GEP (US),  Wipro (India), TCS (India), Aegis (India), Xchanging (UK), Corbus (India), CA Technologies (US), and so forth.