Procurement as-a-Service Market Size, Trends and Growth Analysis by 2027

The procurement as-a-service (PaaS) market was valued at approximately US$ 3,137.7 million in 2019 and is anticipated to grow to US$ 4,741.1 million by 2027, reflecting a compound annual growth rate (CAGR) of 6.4% from 2020 to 2027.

PaaS is defined as an outsourced procurement model that leverages a combination of skilled personnel, advanced technology, and specialized knowledge to optimize procurement functions effectively. By adopting this model, organizations gain enhanced control over their assets and operational processes. PaaS provides businesses with access to expert knowledge and cutting-edge technology on demand, resulting in substantial cost reductions. Additionally, this model offers the flexibility to adjust support levels according to business needs, allowing for scalability. PaaS also helps in distributing the complexities associated with procurement across the organization.

Strategic procurement organizations are increasingly seeking integrated solutions that encompass various functions such as sourcing, supplier management, contract management, and proactive risk management, alongside transactional procure-to-pay capabilities. With a holistic procurement solution, companies can leverage critical data for informed decision-making while effectively managing ongoing activities throughout the source-to-settle lifecycle.

The procurement as-a-service market is categorized based on several factors, including component, enterprise size, end-user industry, and geographical location. In terms of components, the market is divided into strategic sourcing, spend management, category management, process management, contract management, and transaction management. Notably, the spend management segment accounted for the largest share of the market in 2019.

When considering enterprise size, the market is split between large enterprises and small to medium-sized enterprises (SMEs). In 2019, large enterprises held a significant portion of the global PaaS market, while the SME segment is projected to experience the highest growth rate from 2020 to 2027. The end-user industry segmentation includes IT and telecom, consumer goods and retail, manufacturing, energy and utilities, healthcare, hospitality and tourism, among others. The manufacturing sector dominated the market in 2019 and is expected to maintain its leading position in the coming years.

Geographically, the market is divided into five key regions: North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and South America (SAM). North America is expected to hold the largest market share in the procurement as-a-service sector, as the region is known for being an early adopter of innovative technologies and a center for technological advancements. Enterprises in North America are actively working to improve their procurement operations and implement best practices. The presence of major market players in this region further drives the demand for PaaS solutions, contributing to market growth.

Meanwhile, the APAC region is currently witnessing a significant market share and is projected to experience rapid growth during the forecast period. This region has emerged as a global manufacturing hub, hosting a variety of manufacturing industries. Key countries in the APAC procurement as-a-service market include China, India, South Korea, Japan, and other nations in the region. The swift digital transformation occurring in APAC has heightened the demand for procurement outsourcing services. PaaS enables companies to streamline their procurement departments and improve the overall efficiency of their procurement processes. India, China, Japan, Australia, and New Zealand (ANZ) are recognized as leaders in the PaaS market.

Prominent players in the global procurement as-a-service market include GEP, Accenture, IBM Corporation, Infosys Ltd., HCL Technologies, Corbus, LLC, WNS (Holdings) Limited, CAPGEMINI SE, Genpact Ltd., and Wipro Limited.

Impact of COVID-19 on the Procurement as-a-Service Market

The COVID-19 pandemic, which originated in Wuhan, China, in December 2019, has rapidly spread worldwide, significantly impacting countries such as China, Italy, Iran, Spain, South Korea, France, Germany, and the United States by March 2020. The surge in confirmed cases prompted governments to enforce lockdowns, leading to the closure of many manufacturing facilities and a slowdown in municipal operations. Industries such as automotive and semiconductors faced halts, adversely affecting the procurement as-a-service market. While Canada and Mexico have experienced fewer cases compared to the US, their manufacturing sectors are also operating at reduced capacity, further impacting the PaaS market.

The overall size of the global procurement as-a-service market has been determined through extensive primary and secondary research. The research process began with thorough secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to the PaaS market. Additionally, numerous primary interviews were conducted with industry participants and experts to validate the findings and gain deeper insights. Participants typically include industry professionals such as VPs, business development managers, market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the procurement as-a-service sector.