The procurement-as-a-service market expected to grow from US$ 3,065.0 million in 2020 to US$ 4,741.1 million by 2027; it is estimated to grow at a CAGR of 6.4% from 2020 to 2027.
Increasing demand from enterprises to streamline the procurement processes is attributing to the growth of the procurement-as-a-service market. Procurement is one of the most important and complex business processes in the both SMEs as well as large enterprises, as this business function is responsible for various day-to-day operations of the enterprises. Procurement are of 2 types, including, direct and indirect procurement. The direct procurement is a process that is involved in acquiring various raw materials and goods for final product production. These acquisitions are conducted frequently and are very essential for key business practices, such as an automaker acquiring steel to produce vehicles. If direct procurement encounters problems or stops functioning, companies will no longer be capable to produce their products and generate revenue. Whereas, in indirect procurement process, the enterprises are involved in purchasing services or supplies that are needed to keep the day-to-day business alive. This comprises things such as acquiring services or buying office supplies, and repairing equipment. Without indirect procurement functions, businesses may not be capable to operate in an effective and efficient manner. Typically, the indirect procurement comprises somewhere from 15% to 30% of a firm’s total revenue. Owing to this, the companies across different industries are highly focusing on outsourcing their procurement operations in order to reduce their operational costs involved in procurement activities. Through outsourcing these business functions, the companies get access to manage their activities such as transaction management, sourcing, spend management, category management, and others. Additionally, enterprises are expanding their business operations globally in order to increase their client base. The procurement has a significant role to play in enhancing the supply chain transparency, delivering enterprise-wide cost reduction, and accessing supplier innovation. Thus, procurement departments of enterprises across the globe are presently focusing to explore the area of procurement outsourcing in order to achieve the business goals. The procurement as a service model not only offers cost reduction and flexibility and but also provides a subject matter expertise to the enterprises. As a result, large number of enterprises are increasingly focusing on streamlining their procurement processes with adoption of procurement as-a-service model, which in turn is driving the growth of the procurement-as-a-service market.
Impact of COVID-19 Pandemic on Procurement-as-a-Service Market
While there are diverse viewpoints on the damage, which COVID-19 may cause, the fact remains that COVID-19 is spreading worldwide. New cases are rising in locations including, the US, Canada, Europe, Africa, the Middle East, India, Australia, South Korea, and Japan, among several other countries. Though the complete impact of COVID-19 is still unidentified, the impact across the electronics value chain will probably be far-reaching—and strongly affecting parties involved with semiconductor manufacturing. COVID-19 is underlining the possible risks and vulnerability of procurement management value chain model as well as challenging the information communication and technology (ICT) industry to consider altering its global supply chain model.
Lucrative Regions in Procurement-as-a-Service Market
- Sample PDF showcases the content structure and the nature of the information with qualitative and quantitative analysis.
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Market Insights–
Procurement-as-a-Service Market
Lucrative opportunities from Emerging Economies
The fast-growing economies across the Asian and African regions are expected to witness a significant surge in demand for various procurement services, including strategic souring, transaction management, spend management, and others. Recently, the African region has attracted notable investment towards the development of its critical energy & power infrastructure along with rising investment towards its other industrial sector, such as oil & gas, power generation, and manufacturing to facilitate its growth owing to increasing demand from its fast-growing population. Moreover, various prominent industrial market players from different industry verticals also have expanded their business operations across the African region to capitalize on its fast-growing population and subsequently to set up a state-of-the-art technology enabled plants and manufacturing facilities across the African regions. Similarly, the fast-growing end-user sector of India also attracted a substantial in-flow in its foreign direct investment (FDI) directed towards its manufacturing sector through the government’s Make in India initiative to boost its manufacturing capabilities. Additionally, due to the severe impact of Covid-19 across the world, various leading manufacturing companies from different countries are focusing to shift their production plants from China to India in the near future. This in turn, presents the scenario of adoption of procurement as-a-service offerings owing to the company’s limited budget towards investment on their own procurement department, related-technology as well as industry experts. Thus, the growing end-user industry across the developing economies such as Africa and Asia, is expected to witness a significant boost in its manufacturing capabilities and is expected to drive the demand for procurement as-a-service offerings across different industry verticals.
Subsequently, the rising need for efficient procurement services and solutions to enhance procurement performance and reduce operational costs is expected to provide lucrative business opportunities for the procurement-as-a-service market players during the coming years.
Component -Based Insights
Based on component, the procurement-as-a-service market is segmented into strategic sourcing, spend management, category management, process management, contract management, transaction management. The spend management segment held the largest market share in 2019.
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Procurement as-a-Service Market: Strategic Insights
Market Size Value in US$ 3,065.0 million in 2020 Market Size Value by US$ 4,741.1 million by 2027 Growth rate CAGR of 6.4% from 2020 to 2027 Forecast Period 2020-2027 Base Year 2020
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Procurement as-a-Service Market: Strategic Insights
| Market Size Value in | US$ 3,065.0 million in 2020 |
| Market Size Value by | US$ 4,741.1 million by 2027 |
| Growth rate | CAGR of 6.4% from 2020 to 2027 |
| Forecast Period | 2020-2027 |
| Base Year | 2020 |
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Players operating in the procurement-as-a-service market are mainly focused on the development of advanced and efficient products.
- In 2020, WNS-Denali collaborated with the Chartered Institute of Procurement & Supply to identify attributes of high-performance procurement.
- In 2019, Corbus, LLC announced an increased focus on Process Consulting & Digital Transformation. This will integrate technologies into all aspects of business and is expected to positively impact how value is delivered to customers.
The procurement-as-a-service market has been segmented as follows:
Procurement-as-a-Service Market – by Component
- Strategic Sourcing
- Spend Management
- Category Management
- Process Management
- Contract Management
- Transaction Management
Procurement-as-a-Service Market – by
Enterprise Size
- SMEs
- Large Enterprises
Procurement-as-a-Service Market – by End User
- IT and Telecom
- Consumer Goods and Retail
- Manufacturing
- Energy and Utility
- Healthcare
- Hospitality and Tourism
- Others
Procurement-as-a-Service Market – by Geography
North America
- US
- Canada
- Mexico
Europe
- France
- Germany
- Italy
- Russia
- U.K
- Rest of Europe
Asia Pacific (APAC)
- Japan
- China
- Australia
- India
- South Korea
- Rest of APAC
Middle East and Africa (MEA)
- Saudi Arabia
- UAE
- South Africa
- Rest of MEA
South America (SAM)
- Brazil
- Argentina
- Rest of SAM
Procurement-as-a-Service Market – Company Profiles
- Accenture
- CAPGEMINI SE
- Corbus, LLC
- Genpact Ltd.
- GEP
- HCL Technologies
- IBM Corporation
- Infosys Ltd.
- Wipro Limited
- WNS (Holdings) Limited
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Component; Enterprise Size; End-User Industry
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Russian Federation, Saudi Arabia, South Africa, South Korea, United Arab Emirates, United Kingdom, United States
Frequently Asked Questions
The North America region constitutes developed economies including, US Canada, and Mexico. Across North America, technological advancements have led to a highly competitive market. North America region attracts several technological developments, which consist of economically robust countries. The region has a leverage of continuous technological developments. Growth in technologies assist in stimulating the business of other industries.
Procurement solutions include intelligent automation, augmented intelligence, industrial internet of things (IIoT), order management, and supply chain management. In the region, several businesses are working with Artificial intelligence (AI) and sophisticated machine learning algorithms technologies. The potential of such cognitive technologies to make an impact in a business to business (B2B) environment has not fully realized. AI is a major enabler technology; it simulates human decision making by examining data, creating hypotheses, and assessing evidence to make an informed decision. Procurement service providers can look into using these technologies in order to enhance business operations and achieve cost savings through better process efficiency; it helps to identify tail spend suppliers.
Procurement is one of the most important and complex business processes in the both SMEs as well as large enterprises, as this business function is responsible for various day-to-day operations of the enterprises. Procurement are of 2 types, including, direct and indirect procurement. The direct procurement is a process that is involved in acquiring various raw materials and goods for final product production. These acquisitions are conducted frequently and are very essential for key business practices, such as an automaker acquiring steel to produce vehicles. If direct procurement encounters problems or stops functioning, companies will no longer be capable to produce their products and generate revenue. Whereas, in indirect procurement process, the enterprises are involved in purchasing services or supplies that are needed to keep the day-to-day business alive.
Spend comprises analyzing companies spending patterns, spend data management, spend classification/spend categorization, and spend performance management. An effective spend management supports a company to guarantee that the supplier data is kept up to date so that procurement executives are provided with the right information. Further, the supplier databases are integrated throughout the company in order to avoid duplication of the suppliers. The spend management service also includes recognizing the existing procurement inefficiencies and thereby correcting these inefficiencies. Key activities within spend management include spend planning and disbursement, spend monitoring and analysis, and buyer management. For instance, GEP SMART is a combined, procurement software platform that provides complete spend management capabilities, including contract management, spend analysis, supplier management, category management, savings tracking, sourcing, and procure-to-pay. GEP SMART features advanced spend analysis functionality, delivering real-time spend transparency along with historical data for supporting the companies to establish spend trends and conduct opportunity analysis for recognizing cost saving opportunities. Also, this solution turns potential savings opportunities into the structured savings projects, with clearly defined milestones and performance metrics.
The List of companies - Procurement as-a-Service Market
- Accenture
- CAPGEMINI SE
- Corbus, LLC
- Genpact Ltd
- GEP
- HCL Technologies
- IBM Corporation
- Infosys Ltd.
- Wipro Limited
- WNS (Holdings) Limited
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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