Services Procurement Global Market Report 2024

The services procurement market size has grown strongly in recent years. It will grow from $2.19 billion in 2023 to $2.38 billion in 2024 at a compound annual growth rate (CAGR) of 8.9%. The historical growth can be attributed to several factors including the steady rise of globalization, increased demand for specialized skills, a growing focus on employee health and well-being, wider adoption of hybrid workforce models, and increased demand for industry-specific expertise.

The services procurement market size is expected to see strong growth in the next few years. It will grow to $3.38 billion in 2028 at a compound annual growth rate (CAGR) of 9.2%. The anticipated growth in the forecast period is expected to be driven by increasing digitalization in business processes, the growing need for modernized solutions, a focus on core competencies, rising demand for outsourced services, and the emergence of the gig economy and contingent workforce. Key trends in the forecast period are expected to include innovations such as e-procurement platforms, vendor management systems (VMS), and artificial intelligence (AI) to streamline the procurement process, advancements in service procurement technology, and the implementation of sustainable supply chain management practices.

The increasing adoption of digitization is anticipated to propel the growth of the services procurement market. Digitization, utilizing digital technologies to revamp traditional business operations and communication channels, is gaining traction due to its potential for complete IT transformation, which enhances efficiency, scalability, and cost reduction. Digitization plays a pivotal role in automating and streamlining various procurement processes, from supplier identification to contract management. For example, research by the International Monetary Fund in March 2023 indicated a 6% average rise in digitalization across advanced economies. Additionally, the Government of Canada reported in the same period that global spending on digital education surged from 2.5% to 4.3% of global education expenditures, indicating significant investment growth by 2025. Consequently, the growing adoption of digitization is fostering the expansion of the services procurement market.

Key players in the services procurement market are concentrating on developing advanced technological solutions with enhanced procurement capabilities, such as accelerated procurement automation, to fortify their offerings and secure a competitive advantage. Accelerated procurement automation involves expediting and optimizing procurement tasks through advanced technologies and streamlined workflows. For instance, in May 2022, ServiceNow Inc., a leading provider of cloud-based platform solutions, introduced Procurement Service Management (PSM) on its Now Platform. PSM digitizes lower-value tasks, empowering teams to concentrate on strategic endeavors and fostering improved collaboration with suppliers. Through features such as accelerated procurement automation and end-to-end visibility into procurement processes, Procurement Service Management aims to boost efficiency and drive strategic outcomes in procurement.

In February 2022, Bain & Company Inc., a management consulting firm, acquired ArcBlue to augment its procurement expertise with Bain's existing performance improvement products, offering comprehensive procurement solutions encompassing strategy development, design, and technology implementation. ArcBlue, an Australia-based procurement and supply chain consulting organization, specializes in providing procurement-as-a-service.

Major companies operating in the services procurement market are Amazon.com Inc., Accenture plc, International Business Machines Corporation, Cisco Systems Inc., Oracle Corporation, SAP Fieldglass, Tata Consultancy Services Limited, Capgemini SE, Infosys Limited, HCL Technologies Limited, Wipro Limited, Palo Alto Networks Inc., Juniper Networks Inc., Bain & Company Inc., Genpact Limited, GEP Solutions Pvt. Ltd., WNS (Holdings) Limited, Coupa Software Incorporated, Upwork Global Inc., PRO Unlimited Inc., Zycus Inc., Field Nation LLC, JAGGAER Inc., WorkMarket Inc., Beeline B.V.

Europe was the largest region in the services procurement market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the services procurement market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the services procurement market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Services procurement involves acquiring services from external vendors or service providers to fulfill the needs of an organization, encompassing the acquisition of non-physical, intangible resources to achieve organizational objectives.

The primary components of services procurement include transaction management, strategic sourcing, process management, spend management, contract management, and category management. Transaction management involves maintaining consistency and integrity in databases during concurrent transactions. Deployment modes can include both on-premise and cloud solutions tailored to organizations of varying sizes, from small and medium-sized enterprises (SMEs) to large enterprises. Services procurement finds applications across various industry verticals including banking, financial services and insurance (BFSI), information technology (IT) and telecommunications, manufacturing, retail and consumer goods, government, healthcare and life sciences, transportation and logistics, energy and utilities, among others.

The services procurement market research report is one of a series of new reports that provides services procurement market statistics, including the services procurement industry global market size, regional shares, competitors with services procurement market share, detailed services procurement market segments, market trends, and opportunities, and any further data you may need to thrive in the services procurement industry. This services procurement market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The services procurement market includes revenues earned by entities by providing services such as vendor management, sourcing and supplier selection, contract management, procurement process optimization, compliance and risk management, performance monitoring and evaluation. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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