1 Global Procurement Outsourcing Market Outlook
The global Procurement Outsourcing market is projected to exhibit substantial growth in the coming years, with a CAGR of 11.33% from 2024 to 2033, reaching a total market size of $5751.45 million USD in 2024. Procurement outsourcing is defined as the transfer of key procurement activities related to sourcing and supplier management to a third party. This practice allows companies to focus on their core competencies while leveraging external expertise to manage non-core functions efficiently. The primary goal is to enhance operational efficiency, reduce costs, and improve overall business performance. By outsourcing procurement functions, companies can benefit from specialized knowledge, economies of scale, and access to a broader range of suppliers, ultimately leading to better procurement outcomes.
Figure Global Procurement Outsourcing Market Size and Growth Rate (2024-2033)
2 Procurement Outsourcing Market Growth Drivers and Constraints
The growth of the global procurement outsourcing market is driven by several key factors. Firstly, the increasing awareness of the benefits of procurement outsourcing, such as cost savings, improved efficiency, and access to specialized expertise, has led to a higher adoption rate among businesses. Companies are recognizing the value of outsourcing non-core functions to focus on their core competencies, thereby enhancing overall business performance.
Secondly, the rapid development of technology, particularly in the areas of digital procurement and analytics, has significantly improved the efficiency and effectiveness of procurement processes. This technological advancement has made it easier for companies to outsource their procurement functions, as they can now rely on advanced tools and platforms to manage their supply chains more effectively.
However, the market also faces several limiting factors. One of the primary challenges is the uncertainty of service quality. Since procurement outsourcing involves transferring critical functions to external providers, there is a risk of inconsistent service quality, which can impact the overall performance of the business. Additionally, the potential for increased risks, such as data security breaches and vendor reliability issues, can deter some companies from fully embracing procurement outsourcing.
Another limiting factor is the high competition in the market, which can lead to price fluctuations and reduced profit margins for service providers. This intense competition can also result in a fragmented market, making it difficult for new entrants to establish a strong foothold.
3 Procurement Outsourcing Market Innovations and M&A Activities
Innovation plays a crucial role in the procurement outsourcing market. Companies are continuously investing in technology to enhance their service offerings and improve operational efficiency. For instance, the adoption of digital procurement platforms, artificial intelligence, and machine learning technologies is becoming increasingly common. These technologies enable more accurate forecasting, better supplier management, and improved cost control.
Corporate mergers and acquisitions (M&A) are also shaping the market landscape. Major players in the procurement outsourcing industry are actively engaging in M&A activities to expand their market presence, diversify their service offerings, and enhance their technological capabilities. For example, Accenture’s acquisition of various companies has allowed it to strengthen its position in the market and offer a broader range of services to its clients.
In addition to M&A, partnerships and strategic alliances are also prevalent in the industry. Companies are collaborating to combine their strengths and offer comprehensive solutions to clients. These collaborations often involve sharing technology, expertise, and resources to create a more competitive and innovative market environment.
In conclusion, the global procurement outsourcing market is poised for steady growth, driven by technological advancements and increasing demand for efficient procurement solutions. However, companies must navigate various challenges, including quality assurance and competitive pressures, to succeed in this dynamic market.
4 Global Procurement Outsourcing Market Analysis by Type
By 2024, the global procurement outsourcing market is projected to reach a total value of 5,751.45 million USD. In terms of market segmentation by type, direct procurement is expected to hold the largest share, with a value of 3,287.69 million USD, accounting for approximately 57.16% of the total market value. Indirect procurement is forecasted to be valued at 2,463.76 million USD, representing about 42.84% of the total market value.
Table Global Procurement Outsourcing Market Size and Share by Type in 2024
Type | Market Size in 2024 (M USD) | Market Share in 2024 (%) |
|---|---|---|
Direct Procurement | 3287.69 | 57.16% |
Indirect Procurement | 2463.76 | 42.84% |
5 Global Procurement Outsourcing Market Analysis by Application
By 2024, the global procurement outsourcing market is expected to reach a total value of 5,751.45 million USD. In terms of market segmentation by application, the CPG and Retail sector is projected to be valued at 1,094.44 million USD, accounting for approximately 19.03% of the total market value. The BFSI Sector is forecasted to be valued at 869.19 million USD, representing about 15.11% of the total market value. The Manufacturing sector is expected to reach 1,159.51 million USD, making up 20.16% of the total market value. The remaining segment, categorized as “Others,” is anticipated to be valued at 2,628.31 million USD, constituting 45.70% of the total market value.
Table Global Procurement Outsourcing Market Size and Share by Application in 2024
Application | Market Size in 2024 (M USD) | Market Share in 2024 (%) |
|---|---|---|
CPG and Retail | 1094.44 | 19.03% |
BFSI Sector | 869.19 | 15.11% |
Manufacturing | 1159.51 | 20.16% |
Others | 2628.31 | 45.70% |
6 Global Procurement Outsourcing Market Analysis by Region
By 2024, the global procurement outsourcing market is projected to reach a total value of 5,751.45 million USD. In terms of regional distribution, North America is expected to have the largest market share with a value of 1,707.93 million USD, accounting for 29.78% of the total market value. Europe follows with an estimated value of 1,196.55 million USD, representing 20.79% of the total. China is anticipated to have a market value of 1,100.89 million USD, making up 19.13% of the global market. Japan is forecasted to reach 384.24 million USD, contributing 6.90% to the total market value. The Middle East and Africa are expected to have a combined market value of 93.52 million USD, representing 1.63% of the total. India is projected to be valued at 711.89 million USD, accounting for 12.05%. South America is expected to reach 139.88 million USD, making up 2.43% of the total market value.
Figure Global Procurement Outsourcing Market Share by Region in 2024
7 Top 3 Companies of Global Procurement Outsourcing Market
7.1 Accenture
Company Introduction and Business Overview:
Accenture is a global professional services company that provides a wide range of services and solutions in strategy consulting, digital, technology, and operations. Founded in 1989 and headquartered in Dublin, Ireland, Accenture operates in over 50 countries and employs more than 500,000 people. The company’s primary focus is on helping clients transform their businesses through digital innovation, operational excellence, and strategic consulting.
Products Offered:
Accenture offers a comprehensive suite of procurement outsourcing services, including:
Consulting Services: Accenture provides strategic consulting services to help clients optimize their procurement processes, reduce costs, and enhance supply chain efficiency.
Digital Transformation: The company specializes in leveraging digital technologies to transform procurement functions, including the use of analytics, automation, and AI-driven solutions.
Business Process Outsourcing (BPO): Accenture offers end-to-end procurement BPO services, covering everything from sourcing and supplier management to procurement operations and analytics.
Sustainability Solutions: Accenture helps clients integrate sustainability into their procurement strategies, ensuring compliance with environmental and social standards.
Sales Revenue in the Latest Year:
Accenture’s procurement outsourcing segment generated a revenue of 585 million USD, accounting for 17.47% of the global market share. The company’s strong market position and continuous innovation have contributed to its steady growth in the procurement outsourcing market.
7.2 GEP
Company Introduction and Business Overview:
GEP is a leading provider of procurement and supply chain management solutions, offering a comprehensive suite of software and services designed to help enterprises optimize their procurement processes. Founded in 1999 and headquartered in Clark, New Jersey, GEP serves clients across various industries, including healthcare, chemicals, financial services, and manufacturing.
Products Offered:
GEP offers a range of procurement outsourcing services, including:
Procurement Software: GEP’s SMART platform is a market-leading solution for direct materials procurement, providing a unified source-to-pay platform that streamlines and optimizes procurement operations.
Consulting Services: GEP provides strategic consulting services to help clients build robust procurement teams and enhance their sourcing capabilities.
Business Process Outsourcing (BPO): GEP offers end-to-end procurement BPO services, covering strategic sourcing, category management, spend analytics, and procurement operations.
Spend Management: GEP’s solutions help clients manage and optimize their spend across direct and indirect categories, driving cost savings and operational efficiency.
Sales Revenue in the Latest Year:
GEP’s procurement outsourcing segment generated a revenue of 458.87 million USD, accounting for 13.71% of the global market share. GEP’s focus on innovation and client satisfaction has helped it maintain a strong market presence and drive growth in the procurement outsourcing industry.
7.3 IBM
Company Introduction and Business Overview:
IBM is a multinational technology and consulting corporation that provides a wide range of services, including cognitive solutions, cloud computing, and business process outsourcing. Founded in 1911 and headquartered in Armonk, New York, IBM operates in over 170 countries and is known for its innovative technologies and solutions. IBM’s Global Business Services segment offers procurement outsourcing services, leveraging its extensive experience and technological expertise to help clients optimize their procurement processes.
Products Offered:
IBM offers a comprehensive suite of procurement outsourcing services, including:
Cognitive Solutions: IBM provides AI-driven solutions for procurement, such as analytics and data management platforms, to enhance decision-making and operational efficiency.
Business Process Outsourcing (BPO): IBM offers end-to-end procurement BPO services, covering finance, procurement, talent management, and industry-specific business process outsourcing.
Technology Services: IBM provides project management, application development, and infrastructure management services to support clients’ procurement operations.
Consulting Services: IBM’s consulting services help clients develop strategic procurement plans, implement new technologies, and optimize their supply chains.
Sales Revenue in the Latest Year:
IBM’s procurement outsourcing segment generated a revenue of 291.63 million USD, accounting for 8.71% of the global market share. IBM’s strong technological capabilities and extensive industry experience have enabled it to maintain a significant market presence and drive innovation in the procurement outsourcing market.