Procurement outsourcing involves outsourcing the purchase of indirect goods and services to an external partner. It allows organizations to focus on core operations while leveraging the expertise and economies of scale offered by procurement service providers. Key services offered in procurement outsourcing include sourcing optimization, spend analysis, contract management, supplier management, and procurement support & administration. Outsourcing non-core procurement functions to experts enables businesses to achieve cost optimization, enhance visibility across the supply chain, and access advanced technologies. Particularly for healthcare providers, procurement outsourcing is promising to significantly reduce costs amid pricing pressures.
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 Dynamics
The growth of the procurement outsourcing market is primarily driven by the cost reduction pressure on healthcare providers. Healthcare costs have been rising significantly across major countries, burdening both public and private healthcare budgets. Procurement accounts for a substantial portion of overall healthcare expenditure. Outsourcing non-core procurement functions allows healthcare facilities to leverage the scale and expertise of procurement service providers, automate processes, and achieve significant savings through renegotiated contracts. Another major driver is the need for procurement expertise and technology access. Managing compliance, risk, and performance across a complex supply chain requires domain-specific experience and data-driven solutions. Procurement outsourcing partners bring advanced procurement tools and analytics that help optimize processes and gain end-to-end visibility. This addresses the lack of resources and capabilities that stall procurement modernization in-house.
Segment Analysis
The procurement outsourcing market can be segmented on type, process, industry, and geography. Based on type, the market has been divided into direct procurement and indirect procurement. The direct procurement segment dominates the market as organizations are increasingly outsourcing direct sourcing solutions like inventory management of direct materials. In terms of process, the market is classified into transactional procurement, contract management, supplier relationship management, and others. Transactional procurement accounts for the highest market share as most organizations outsource operational transactional procurement tasks to reduce costs. Based on industry, the segments include manufacturing, energy & utilities, healthcare, telecom, and others. The manufacturing industry has the largest share in the market as direct and indirect procurement needs are highly outsourced in this sector.
PEST Analysis
Political: Regulations around data privacy and security are pushing organizations to outsource procurement to trusted partners ensuring compliance. Economic: Global economic uncertainties are propelling companies to outsource non-core procurement activities for focused operations and reducing costs. Social: Skilled talent shortage is a key driver for procurement outsourcing to access specialized domain capabilities. Technological: Emergence of technologies like artificial intelligence, machine learning, and blockchain are helping organizations gain better visibility and control over outsourced procurement processes.
Key Takeaways
The Global Procurement Outsourcing Market Demand is expected to witness high growth given the cost and operational advantages offered.
Regional analysis comprises North America dominates the market currently due to early technology adoption. However, Asia Pacific is expected to grow at the fastest rate during the forecast period led by countries like India, China, and Japan increasingly outsourcing procurement functions.
Key players operating in the procurement outsourcing market are 3M, Cardinal Health, Smith+Nephew, Genadyne, DeRoyal Industries, Inc., Medela AG, Convatec Inc., Mölnlycke Health Care AB, PAUL HARTMANN AG, ATMOS MedizinTechnik GmbH & Co. KG, Talley Group Ltd, Cork Medical, LLC, and Devon Medical Products. Companies are investing in technologies to integrate procurement outsourcing offerings and gain competitiveness.
For more details on the report, Read- https://www.trendingwebwire.com/procurement-outsourcing-market-demand-share-analysis/
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