The Growing Demand for Reduced Costs and Improved Efficiencies is driving the Procurement Outsourcing Market
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Procurement Outsourcing Market |
Procurement
outsourcing involves contracting external procurement specialists to handle an
organization's procurement activities and responsibilities. It allows companies
to focus on their core competencies while leveraging procurement experts to
negotiate better terms, reduce costs, drive efficiencies, and manage suppliers.
Procurement outsourcing ensures access to specialized skills, advanced
technologies, and greater buying power. Areas such as material management,
purchase-to-pay processes, supply chain management and strategic sourcing are
increasingly being outsourced.
The global Procurement Outsourcing Market is estimated to be valued at US$ 5.94
billion in 2024 and is expected to exhibit a CAGR of 6.5% over the forecast
period 2024 to 2030, as highlighted in a new report published by Coherent
Market Insights.
Market key trends:
One of the key trends in the procurement outsourcing market is the increased
adoption of cloud-based procurement solutions. Cloud deployment allows
procurement functions to be managed remotely and facilitates collaboration
between organizations and outsourcing partners. It provides scalability,
flexibility and optimizes costs for procurement departments. Procurement
service providers are investing in cloud-based platforms to manage direct and
indirect category sourcing, eProcurement, spend analysis, contract management
and supplier information. The transition to cloud is expected to accelerate due
to benefits like pay-as-you-go pricing and no upfront infrastructure costs.
This growing shift towards cloud-based procurement solutions will support the
market growth over the forecast period.
Porter's
Analysis
Threat of new entrants: The procurement outsourcing market requires substantial
investment in resources, technology and employee training which poses a
moderate threat of new entrants.
Bargaining power of buyers: Large enterprises have high bargaining power as
buyers due to their ability to choose from a wide range of vendors providing
procurement outsourcing services.
Bargaining power of suppliers: The presence of numerous procurement outsourcing
service providers limits the bargaining power of individual suppliers in this
market.
Threat of new substitutes: Currently there are limited substitute options for
procurement outsourcing services. However, in-house procurement teams continue
to remain a competitive alternative.
Competitive rivalry: The global procurement outsourcing market comprises large
and small players competing on the basis of service offerings, innovation and
pricing. This results in high competitive rivalry.
Key Takeaways
The Global
Procurement Outsourcing Market Demand is expected to witness high
growth over the forecast period supported by the numerous benefits of
outsourcing such as reduced procurement costs and focus on core competencies.
Regional
analysis: North America dominated the global procurement outsourcing market in
2020 accounting for the largest market share. This can be attributed to growing
healthcare spending and presence of major market players in the region. Asia
Pacific is expected to witness the fastest growth during the forecast period
supported by rising medical tourism industry in countries such as India, China
and Singapore.
Key players: Key players operating in the procurement outsourcing market
include 3M, Cardinal Health, Smith+Nephew, Genadyne, DeRoyal Industries, Inc.,
Medela AG. These companies are focusing on new product launches and
partnerships to strengthen their market position. For instance, in 2021,
Cardinal Health collaborated with Novant Health to improve the organization's
procurement processes through outsourcing strategies.
For more details on the report, Read- https://www.rapidwebwire.com/procurement-outsourcing-market-trends-size-and-share-analysis/
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