Procurement as a Service Market size was over USD 6.4 Billion in 2023 and is anticipated to exceed USD 30 Billion by the end of 2036, witnessing over 10.2% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of procurement as a service is assessed at USD 8 Billion.
During the COVID-19 pandemic, the need for remote working policies contributed to the growth of the global remote access solution and automated solutions industry, including procurement services and solutions. This in turn fuelled the demand for the procurement as a service market. According to the U.S. Census Bureau, 5.7% of US workers were working from home in 2019, prior to the COVID-19 pandemic. In two years, however, this figure increased to 17.9% on the back of nearly 19 million new jobs.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
10.2% |
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Base Year Market Size (2023) |
USD 6.4 billion |
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Forecast Year Market Size (2036) |
USD 30 Billion |
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Regional Scope |
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Component (Strategic Sourcing, Spend Management, Process Management, Category Management, Contract Management, Category Management)
Based on the component segment, the strategic sourcing segment in the procurement as a service market is predicted to hold the largest share of USD 2 billion in the year 2022. Technological progress has made it more efficient for businesses to source and manage their supply chain, allowing them to lower costs and increase profits. The growing demand for the development of procurement functions within enterprises using technology will lead to procurement as a service market growth over the coming years. For example, TATA Consultancy Services Limited entered into a partnership with the Financial Ombudsman Service of the United Kingdom in April 2022.
In addition, the Ombudsman and TATA Consultancy Services have worked together to improve and develop TCS's digital services in a way that would make them more effective at eliminating complaints and discrimination as well as better serving and supporting clients. In order to ensure that the Ombudsman's technology capabilities are futureproofed, TCS will develop a new digital experience platform that is designed to improve the user experience of complainants and their responses.
Enterprises Size (SMEs, Large Enterprises)
Large enterprises segment is set to account for procurement as a service market share of more than 70% by the end of 2036. In order to manage complex contractual agreements and bag agreements, large companies will continue to use these services, taking a significant part of the overall revenue. These services are preferred by large companies, as they reduce operating costs and remove the complexity of doing business. Service providers are chosen by large enterprises because they reduce operating costs and simplify their operations.
Vertical Outlook (BFSI, Manufacturing, Retail, IT & Telecom, Healthcare)
In procurement as a service market, manufacturing segment is likely to showcase over 5% growth rate till 2036. The ability of the technology to mitigate supply chain risks can be attributed to the growing use of PaaS solutions in the manufacturing sector. In addition, several companies are entering into strategic partnerships to develop novel solutions that help end users anticipate and mitigate supply chain problems.
For example, in November 2022, Corbus entered into a partnership with GIS for the procurement of supply chain services to enable customers in Europe, Latin America, North America, Asia, and the Middle East & Africa to benefit from infrastructure and resources.
Our in-depth analysis of the procurement as a service market includes the following segments:
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Component |
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Enterprises Size |
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Vertical Outlook |
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North American Market Statistics
By 2036, North America segment is expected to capture procurement as a service market share of over 33%. The region is experiencing a marked increase in the adoption of procurement outsourcing given its large number of small and medium-sized enterprises. Furthermore, government investments in the digitization of businesses are massive. For example, Amazon, Oracle, Microsoft, and Google were awarded a USD 9 billion cloud contract reported as per data.
A significant procurement as a service market driver in the US is expected to be the adoption of procurement as a service by public sector organizations, which will allow for greater transparency and control of costs.
Escalating technological advancement and integration of cutting-edge technologies are to boost the market growth in Canada.
APAC Market Analysis
The Asia Pacific procurement as a service market region will also encounter notable growth of USD billion by the end of 2036. The demand for procurement services in the Asia Pacific region as a service is projected to increase over the forecast period due to the growing economies of developing countries, which are expecting growth in their infrastructure sectors. To support the growth of various sectors, such as manufacturing, automobile, and food & beverage among others, the Indian Government has launched its "Make in India" initiative.
The Indian government is launching Make in India 2.0, which is the next phase of Make in India, and this initiative will focus on futuristic sectors such as robotics. In India, the development of different sectors has benefited from procurement as a service market support and led to exponential growth in procurement as a service for Indian industry in the upcoming years.
In India, demand for new sources of supply has been rapidly increasing. Demand for procurement as a service solution is set to increase significantly by 2036 in order to deal with new sources.
Increased demand for advanced technologies in China has been created by the constant increase in population. Service providers of procurement services have an excellent opportunity to increase their procurement as a service market shares in the region due to increased sales of modern technologies in different sectors.
The opportunity for the electronics market development lies in Japan, which is among the world's most innovative countries.
The vendors follow the trend of providing their clients with subscription-based, industry-specific, and custom-tailored services and solutions. To gain market shares in various regions and markets as a whole, the competitor also uses organic and inorganic growth strategies such as mergers, acquisitions, product launches, or partnerships.
Author Credits: Abhishek Verma
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