Procurement Outsourcing Services Market Growth Forecast (2024-2032) | Drivers, Trends, and Leading Players in AI-Driven Procurement, Spend Management, and Global Supply Chain Optimization for BFSI, Healthcare, IT & Telecom, and More

180 Pages Market Research Report on Procurement Outsourcing Services is forecasted to grow from 2024 to 2032, driven by various services such as savings-focused (category management, tail-spend management, spend analysis) and operations-focused (transaction management, contract management, sourcing process management).

It is segmented by deployment mode (on-premises, cloud-based), organization size (SMEs, large enterprises), and end-use verticals including BFSI, energy & utilities, healthcare, IT & telecom, retail, and more.

Major players include GEP, IBM, Accentu, Infosys, Genpact, Capgemini, Wipro, and Tata Consultancy Services.

The market also includes insights into regional footprints, competitive index, and the partner & customer ecosystem.

The Procurement Outsourcing Services Market was valued at USD 2.81 billion in 2022 and is expected to reach USD 10.7 billion by 2032, growing at a CAGR of 14.70% from 2024 to 2032.

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Why the Demand for Procurement Outsourcing Services Has Increased in Recent Years

Cost Efficiency and Focus on Core Competencies: Organizations are increasingly adopting procurement outsourcing to reduce operational expenses and enable a sharper focus on their core business functions.

By outsourcing procurement, companies can access specialized expertise, streamline procurement processes, and achieve better financial outcomes.

This strategy helps businesses minimize overhead costs, allowing them to allocate more resources towards growth and innovation.

Globalization and Market Expansion: As businesses continue to expand across international markets, managing complex global supply chains becomes more challenging.

Procurement outsourcing allows companies to optimize sourcing strategies, ensuring compliance with international regulations and navigating diverse markets effectively.

This enables businesses to focus on scaling while outsourcing procurement tasks to specialists who possess the regional knowledge and skills to ensure operational efficiency.

Enhanced Risk Management: Outsourcing procurement provides companies with advanced risk management capabilities to address challenges such as supply chain disruptions, fluctuating market conditions, and regulatory changes.

Specialized outsourcing providers are equipped with risk mitigation strategies and tools that enhance business resilience.

This is increasingly critical in today's volatile global market, where external factors can disrupt operations at any time.

Access to Specialized Skills and Technology: The rapidly evolving field of procurement technologies, such as artificial intelligence (AI), machine learning, and blockchain, has led many companies to seek external expertise.

By outsourcing procurement functions, organizations can take advantage of the latest technological advancements without making significant investments in infrastructure or training.

This access to specialized skills and tools enhances procurement efficiency and optimizes sourcing decisions.

Strategic Sourcing and Sustainability Initiatives: Strategic sourcing has become a key focus for businesses aiming to streamline operations, reduce costs, and achieve sustainability goals.

Outsourcing partners often bring innovative solutions that align with sustainability initiatives, providing businesses with access to green procurement practices and helping them meet corporate social responsibility objectives.

This, in turn, strengthens a company's reputation and fosters long-term relationships with suppliers and stakeholders.

Why the Demand for Procurement Outsourcing Services Is Expected to Increase in the Coming Years

Increased Adoption of Digital Transformation: As businesses continue their digital transformation journey, the need for advanced procurement solutions has become more pronounced.

Procurement outsourcing providers are investing in state-of-the-art technologies, such as AI, machine learning, and automation tools, to offer more efficient, data-driven procurement services.

The adoption of these technologies helps businesses reduce costs, improve operational efficiency, and enhance decision-making, making procurement outsourcing an attractive solution for digital-first organizations.

Focus on Supply Chain Resilience: The COVID-19 pandemic and other global disruptions have highlighted the importance of resilient supply chains.

To ensure business continuity and mitigate future risks, organizations are increasingly relying on procurement outsourcing to strengthen their supply chain management.

Outsourcing providers offer innovative strategies to enhance supply chain flexibility and resilience, enabling businesses to navigate uncertainties with greater agility and efficiency.

Regulatory Compliance and Data Security The growing complexity of regulatory environments and concerns about data security are driving businesses to outsource procurement functions. Specialized outsourcing providers are well-equipped to navigate complex regulatory landscapes, ensuring compliance with global laws and industry standards.

Additionally, they offer robust data security measures to protect sensitive information, a crucial aspect for businesses operating in highly regulated sectors.

Key Developments in the Procurement Outsourcing Services Industry (2024-2025)

GEP (U.S.):

Industry Recognition: In 2024, GEP was named a Leader and Star Performer in the Everest Group Procurement Outsourcing Services PEAK Matrix® Assessment for the twelfth consecutive year.

This recognition highlights GEP's robust capabilities and strategic expertise in delivering end-to-end procurement solutions across industries.

Strategic Partnerships: In July 2021, Lenovo selected GEP's AI-driven procurement software, GEP SMART™, to optimize its global sourcing for direct spend. This strategic partnership is aimed at transforming Lenovo's procurement operations through advanced sourcing, project management, and supplier performance evaluation.

Product Innovation: In May 2024, GEP launched the AI-driven Total Orchestration Solution designed to revolutionize enterprise procurement and supply chain operations. The solution automates and simplifies procurement processes, enhancing collaboration, visibility, and decision-making across enterprises.

Industry Leadership: GEP was recognized as a Leader in the ISG Provider Lens™ - Procurement Software Platforms Global report for the fourth consecutive year in April 2024.

This recognition reflects GEP's continued innovation in AI, low-code/no-code platforms, and sustainability tools that enhance procurement processes.

IBM (U.S.):

Strategic Partnerships: IBM has formed a strategic alliance with SAP to drive digital transformation in procurement. This collaboration aims to provide clients with enhanced analytics and AI-powered procurement solutions, improving efficiency and supporting informed decision-making in procurement operations.

Product Innovation: IBM introduced the IBM Procurement Insights platform, which leverages AI and machine learning to provide actionable insights into procurement data. This platform helps organizations optimize supplier relationships, streamline procurement processes, and achieve significant cost savings.

Industry Leadership: IBM was recognized as a Leader in the 2024 Gartner Magic Quadrant for Procure-to-Pay Suites. This acknowledgment reflects IBM's strong suite of procurement solutions, underpinned by its focus on innovation and ability to support clients in digital procurement transformations.

Broadcom (U.S.):

Strategic Partnerships: Broadcom has entered into a partnership with Accentu to deliver advanced procurement solutions. This collaboration combines Broadcom's technology expertise with Accent's consulting services, aiming to enhance procurement efficiency and effectiveness across industries.

Product Innovation: Broadcom launched the Broadcom Procurement Cloud, a comprehensive platform that integrates AI and automation to streamline procurement operations. The platform enhances the entire procurement cycle, from sourcing to payment, providing clients with an efficient and innovative solution to procurement challenges.

Industry Leadership: Broadcom was named a Leader in the Forrester Wave™: Procurement BPO Providers, Q1 2024.

This recognition highlights Broadcom's strong performance in delivering procurement outsourcing services, as well as its commitment to driving client success and fostering innovation within the procurement space.

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FAQs on Procurement Outsourcing Services

What are Procurement Outsourcing Services?

Procurement outsourcing involves the delegation of procurement activities, such as sourcing, category management, and transaction management, to external service providers. By outsourcing these tasks, companies can focus on their core operations while benefiting from the specialized expertise of external partners to enhance procurement efficiency and effectiveness.

What are the Types of Procurement Outsourcing?

Procurement outsourcing can be classified into several models, each designed to address different business requirements:

Tactical Procurement Outsourcing: This model focuses on administrative tasks such as invoice management and purchase order processing, relieving internal teams of day-to-day procurement responsibilities.

Strategic Procurement Outsourcing: This type involves collaborating with external experts to handle high-level functions like market research, supplier selection, and contract management, all aimed at optimizing procurement strategies.

Category-Specific Procurement Outsourcing: This model focuses on specific categories of goods or services, such as IT or marketing, where specialized knowledge and support add substantial value.

End-to-End Procurement Outsourcing: In this model, the entire procurement process, from sourcing to payment, is managed by an external provider, offering a comprehensive approach to procurement management.

Why Did Many Companies Start to Outsource Their Procurement?

Companies have increasingly chosen to outsource procurement to achieve various strategic benefits:

Cost Reduction: Outsourcing allows companies to lower operational costs by reducing labor expenses and avoiding the need for an in-house procurement team.

Access to Expertise: By partnering with external providers, organizations gain access to procurement professionals who bring specialized knowledge, helping businesses secure the best suppliers and negotiate optimal terms.

Operational Efficiency: Outsourcing procurement tasks enables companies to focus on their core business activities, thereby enhancing overall productivity and operational efficiency.

What is the Function of Procurement?

Procurement is the process of acquiring goods, services, or works from external sources to meet the needs of a business. Its key functions include:

Sourcing: Identifying and selecting suppliers who provide the best value in terms of cost, quality, and reliability.

Negotiation: Engaging suppliers to negotiate favorable terms, conditions, and pricing that benefit the company.

Contract Management: Overseeing the drafting, execution, and compliance of contracts to ensure that both parties meet the agreed-upon terms.

Supplier Relationship Management: Developing and maintaining strong relationships with suppliers to ensure a mutually beneficial and collaborative partnership.

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