Procurement as a Service Market witnessed for USD 5,271 million in 2019, growing at a robust CAGR of 8.8% during forecast period. GMI Research has done a comprehensive analysis of the market and encounters exponential growth due to the growing awareness among organizations about adopting the procurement as a service model, which alleviates the procurement cost and streamlines the process.
Introduction of the Procurement as a Service Market
Procurement as a service is also called PAAS, an outsourced procurement form that colludes staff, expertise, and technology to manage a portion of the company’s procurement function. The PAAS model affects the bottom line, alleviates risks, and helps to concentrate on what matters the most. The service provider does the process evident to organizations they work with the help of a reporting portal.
Key Players of the Market
Key Drivers and Emerging Trends
Global procurement as a service market is expected to gain high demand in the next six years. Therefore, enterprises increasingly adopting PAAS to mitigate the cost for procurement operations and streamline procurement processes is a crucial driver contributing to the market growth. Furthermore, the growing penetration of advanced technologies like IoT, artificial intelligence, and other technologies further stimulates the Procurement as a Service Market Size. In addition, as per the Procurement as a Service Market Research Report, with the increasing competition at the global level, the supply chains are selecting revived processes to assure productivity and enhance business operations. There has been an evolution of customized offerings, which has encouraged the service providers to move their business towards the “as-a-service” model.
The procurement technology vendors, including Tradeshift and SAP SE, are making individual suppliers’ networks, e-procurement solutions, and procure-to-pay to take the largest share in the market. Hence, the customers are inclined towards e-procurement solutions to minimize their cost and time for marketing the product offerings. Extensive labor is required within the company to manage the indirect spending, as it is complex. It comprises sourcing complex goods and services like marketing, professional services, IT services, and facilities management.
It helps customers shift their preference towards accepting the PAAS model to manage business operations, payments effectively and track purchases. According to the procurement as a service market research, the growing use of automation is leading progress in the procurement transformation process. It has supported digitalizing and reinventing processes to reach new levels. For example, Radix, the cloud-based source-to-pay platform, offered several advantages to the client through Accenture’s procurement as a service model. Thus, automation-enabled analytics is critical in enhancing the workflow’s speed, effectiveness, and accuracy for better results.
Restraint in the Procurement as a Service Market
On the other end, as per the Procurement as a Service Market Size Report, the growing concerns related to data safety and privacy amongst several organizations are the significant factor that is likely to hinder the Procurement as a Service Market size.
Component – Segment Analysis
Based on the component, the strategic sourcing segment is forecasted to witness a higher CAGR during the forecast period. Strategic sourcing comprises many activities, including testimonials of organizations’ external spending, operating the Request for Quotation (RFQ)/Request for Proposal (RFP) process, negotiating costs with suppliers, and fixing up the contracts. Thereby, the capacity of strategic sourcing to administer numerous operations is bringing individuals towards the segment. Hence, strategic sourcing also acts as a significant part of every business.
Vertical – Segment Analysis
Based on the vertical, the manufacturing segment is projected to rule the market during the forecast period. The extreme competition in the global market, coupled with the dynamic demand of the consumers, has motivated the manufacturing companies to deliver high quality with excellent features at a discounted price range. Thus, the manufacturing firms have started to choose technology-driven solutions and procurement outsourcing to integrate their manufacturing processes and boost their revenue. The employment of the PAAS model has enabled the organizations to highlight their proficiency areas, such as manufacturing skills, on-time delivery, and other perspectives.
Organization Size – Segment Analysis
Based on the organization size, the small and medium-sized enterprises segment envisages growing at a tremendous CAGR during the forecast period. It is attributed to the growing knowledge towards the utilization of procurement as a service model to lower expenses related to technology arrangements ad staff contracting. Moreover, the surging need to maintain complicated procurement contracts is further boosting the segment growth.
Based on the region, Europe speculates its dominance of the global procurement as a service market during the forecast period. The increasing awareness linked with the streamlining of supply chain processes is one of the remarkable factors anticipated to fuel market growth in the region. This model has supported businesses to move towards sustainability. Besides, the rest of the world region is estimated to grow at a faster CAGR during the forecast period. The number of enterprises that preferred the PAAS model to reconstruct their businesses has increased in Latin America, a vital factor bolstering the market growth.
Procurement as a Service Market Segmentation
Market Segmentation by Component
Market Segmentation by Organization Size
Market Segmentation by Industry Vertical
Market Segmentation by Region
About GMI Research
GMI Research is a growing marketing research firm that offers a consummate analysis of profiles of organizations. We execute exceptional research-based solutions for businesses and support our clients in making practical investment judgments and raising revenue. We provide accurate research-based reports and consulting services based on insight facts to ensure our clients attain success by succeeding in the competition.