The global procurement-as-a-service market is expected to grow at a CAGR of around 9.6% from 2021 to 2028 and is expected to reach the market value of around US$ 8.9 Bn by 2028.
The service provider in the procurement-as-a-service landscape manages the interconnected elements of service, people, technology, and architecture-all unified as a service. The service layer, technology layer, intelligence and analytics, and compliance and risk management are the key components of the procurement-as-a-service (PAAS) model.
Streamlining organizational operations bolster the growth of global Procurement-as-a-service (PAAS) market
New advancements in procurement-as-a-service, in particular, is a modern way of managing an organization's purchasing as a service, whether direct, indirect, or both. Rising global market competition and maintaining competitiveness necessitate budgeting for cost savings in all aspects of business operations that heavily rely on sourcing. Because sourcing accounts for a significant portion of revenue, it is estimated that focusing on the effective implementation of procurement is worth up to 75% of the time. With sourcing digitizing at such a rapid pace, advanced digital tools that accelerate the entire procurement process are required. As a result, procurement as a service is a cost-effective way for an organization to manage its purchasing. This procedure has been refined and proven to be effective in practice.
Technological advancement bolsters the growth of global procurement as a service market
Digital technology advancements are reshaping business operations involving the supply chain, resulting in the transformation of procurement functions that add value to the organization. It is driving the overall procurement process through the integration of such disruptive technologies. Apart from that, strategic sourcing has gained significant market attention as a proactive solution by becoming more predictive and transactional through automation and supplier relationship management. Furthermore, digital procurement as a service solution enables more complex analysis and better supplier strategies, allowing for more efficient operations. In fact, digital procurement solutions are enabling more complex analysis, more effective supply strategies, and more efficient operations. For example, through visualization technology, the adoption of an advanced analytics model that uses a large volume of manufacturing and procurement data to generate costs can be improved.
Impact of COVID-19 on global procurement-as-a-service market
Since the beginning of the COVID-19 pandemic, there has been a health crisis, and business leaders around the world have been consistently developing crisis management models to keep customers, clients, and their enterprises safe. Almost half (46%) of procurement organizations reported lowering their cost-cutting targets as a result of the pandemic, while only 28% reported raising targets. The use of advanced technologies is the solution to such a crisis. Companies with advanced procurement functions understand that supplier collaboration provides lucrative opportunities for bringing new innovations to market through collaboration with suppliers and can result in earnings growth (up to 10%). Furthermore, 69% of procurement leaders responded positively by viewing digital analytics as a solution with significant potential for accelerating procurement as service effectiveness. Adoption of such advanced analytics as a new tool aids in the identification of new opportunities increases supply chain transparency and improves resilience by enabling more collaborative remote working models.
The global procurement-as-a-service market is segmented as a component, organization, and vertical. Based on components, the market is segmented as strategic sourcing; spend management, process management, category management, contract management, and transaction management. By organization, the market is bifurcated into SMEs and large enterprises. By vertical, the market is segregated as BFSI, manufacturing, retail, IT & Telecom, healthcare, and others.
Strategic sourcing is expected to hold the dominant share of the procurement-as-a-service market during the forecast period. Strategic sourcing has gained prominence in the global market as a result of digital transformation, which has triggered procurement and supply chain processes. Furthermore, by implementing strategic sourcing, the organization can reduce total costs while increasing productivity (65%) and saving (61%). These factors serve as a primary motivator for the organization to pursue strategic sourcing, which in turn supports the growth of the global procurement-as-a-service market.
Large enterprises accounted for the majority of the market share in the past and are expected to continue this trend throughout the forecast period. Procurement-as-a-service is widely used around the world because it provides revenue opportunities for large enterprises. With the incorporation of procurement transformation, opt for a more robust procurement platform that is full of technology solutions to ensure the organization's long-term success. Such factors fuel segmental growth, which in turn fuels the growth of the global procurement-as-a-service market.
According to vertical, the manufacturing sector had the highest market share in 2020 and is expected to maintain this trend throughout the forecast period. Procurement-as-a-service adds significant value to clients through innovative solutions, expertise, domain expertise, and the use of cutting-edge digital technologies like AI, ML, and RPA. The incorporation of procurement-as-a-service changed the market scene, highlighting the importance of staying on top of the latest procurement and manufacturing trends. This, in turn, fuels segmental growth, which drives the global procurement-as-a-service market.
North America holds the dominant share for the procurement-as-a-service market
North America has held the lion's share of the market in the past and is expected to do so again during the forecast period. This is due to the presence of a leading and rapidly growing US-based technology company in this region. These companies invest heavily in order to compete and grow rapidly in emerging markets. In addition, North America has expanded and leveraged its expertise by sourcing expertise for service delivery models in order to find the best solution. Such factors have a positive impact on regional market growth, ultimately contributing to the expansion of the global procurement-as-a-service market.
Europe, on the other hand, dominated the procurement-as-a-service market in 2020, with the highest revenue share. This is primarily estimated by the widespread use of digital technologies. Because digital procurement is inextricably linked with e-Government, it is one of the most influential factors in public administration activities, which serves as a cornerstone of the EU's digital single market strategy. Such factors will drive the growth of the procurement-as-a-service market in the European market in the coming years.
The prominent players of the global procurement-as-a-service market involve Accenture, HCL Technologies Ltd, Aegis Limited, GEP, International Business Machines Corporation (IBM), Infosys Limited, Genpact, Wipro Limited, WNS Limited, Tata Consultancy Services Limited (TCS), and among others
Market By Component
Market By Organization
Market By Vertical
IT & Telecom
Market By Geography
• Rest of Europe
• South Korea
• Rest of Asia-Pacific
• Rest of Latin America
Middle East & Africa
• South Africa
• Rest of Middle East & Africa
Procurement-as-a-service market is expected to reach a market value of around US$ 8.9 Bn by 2028.
The procurement-as-a-service market is expected to grow at a CAGR of around 9.6% from 2021 to 2028.
Based on component, strategic sourcing segment is the leading segment in the overall market.
Rising adoption of digitization is one of the prominent factors that drive the demand for procurement-as-a-service market.
Accenture, HCL Technologies Ltd, Aegis Limited, GEP, International Business Machines Corporation (IBM), Infosys Limited, Genpact, Wipro Limited, WNS Limited, Tata Consultancy Services Limited (TCS), and among others.
North America is anticipated to grab the highest market share in the regional market
Asia Pacific is expected to be the fastest growing market in the forthcoming years