(MENAFN – GetNews) Procurement as a service Market by Component (Strategic Sourcing, Spend Management, Category Management, Process Management, Contract Management, and Transactions Management), Vertical, Organization Size, and Region – Global Forecast to 2024
The global Procurement as a Service Market is expected to grow from USD 5.4 billion in 2019 to USD 7.8 billion by 2024, at a Compound Annual Growth Rate (CAGR) of 7.6% during the forecast period. Factors that drive the market growth are the rising demand among enterprises to streamline the procurement processes and the imminent need to handle compliance policies and contracts.
The large enterprises segment to hold a larger market size during the forecast period
The adoption of the procurement as a service in large enterprises is said to be higher as compared to SMEs. Large enterprises might have the necessary resources, but face issues when it comes to deployment, due to the variety of solutions and applications available. This complexity and sophistication of the Information Technology (IT) infrastructure may lead to the requirement of a dedicated department for IT infrastructure management. Moreover, large companies deal with complex contracts, such as military hardware, IT systems, and public infrastructure projects that take longer to deliver and require better expertise. Large enterprises are increasingly moving toward procurement as a service to eliminate their difficulties and minimize their operational costs.
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The manufacturing vertical to hold the largest market size during the forecast period
Increasing global competition and rising consumer demand to drive companies to differentiate themselves from their competitors. Manufacturing companies must deliver higher quality at lower prices, newer features, and shorter production times while maintaining market presence and managing costs effectively. As a result, manufacturing companies are progressively adopting procurement outsourcing and technology-driven solutions that enable them to streamline their manufacturing processes and achieve significant cost savings. This, in turn, enables them to focus on their competence areas, such as manufacturing skills, production, and on-time delivery. Procurement as a service in the manufacturing industry takes care of processes, such as spend analysis, sourcing and category management, supplier management, Procure-to-Pay (P2P) and Source-to-Pay (S2P) process management (while ensuring execution compliance), and planning and managing the supply chain costs.
The procurement as a service market comprises major solution providers, such as Accenture (Ireland), Infosys (India), GEP (US), Genpact (US), WNS (India), IBM (US), Capgemini (France), Proxima (UK), Wipro (India), HCL (India), TCS (India), Xchanging (UK), Aegis (India), Corbus (US), and CA Technologies (US). The study includes an in-depth competitive analysis of these key players in the procurement as a service market with their company profiles, recent developments, and key market strategies. The players in this market have embraced different strategies to expand their global presence and increase their market shares. New product launches and enhancements; and partnerships, acquisitions, and collaborations, have been the most dominating strategies adopted by the major players from 2016 to 2019, which helped them strengthen their offerings and broaden their customer base.
Infosys (India) is among the leaders in the procurement as a service market with a prominent geographic presence. It has adopted various organic and inorganic growth strategies and continues to enhance its expertise in procurement as a service through technology acquisitions, collaborations, and partnerships. For instance, in April 2019, Infosys formed a joint venture with Hitachi, Panasonic, and Pasona, for enhancing its presence in Japan. With Hitachi and Panasonics knowledge in procurement functions, Infosys brings its global expertise in procurement processes, consulting, analytics, and digital technologies to the venture. The venture provides advanced and efficient procurement capabilities to Japanese companies.
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Accenture (Ireland) has a strong foothold in the procurement as a service market with its sourcing and procurement services. The company has alliances with various technology, and sales and delivery companies to offer its customers with more enhanced and extended services. Furthermore, Accenture has expanded its business footprint by opening new offices and innovation centers in APAC. In April 2019, it established an innovation hub in Shenzhen, China, which specializes in advanced applied Research and Development (R & D) capabilities and helps Accenture’s enterprise clients in China to develop new business concepts and drive innovation.
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