Procurement Outsourcing Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Component (Solution, Services), By Deployment (On-Premises, Cloud), By Organization Size (Small & Medium-sized Enterprises (SMEs), Large Enterprises), By Vertical (Banking Financial Services and Insurance (BFSI), Healthcare, IT & Telecommunication), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 7.86 Billion
CAGR (2026-2031)	15.63%
Fastest Growing Segment	Cloud
Largest Market	North America
Market Size (2031)	USD 18.79 Billion

Market Overview

The Global Procurement Outsourcing Market will grow from USD 7.86 Billion in 2025 to USD 18.79 Billion by 2031 at a 15.63% CAGR. Procurement outsourcing involves the strategic transfer of procurement activities, such as sourcing, supplier management, and procure-to-pay processes, to external service providers to enhance operational performance. The primary drivers fueling market growth include the imperative to reduce operational costs and the necessity to access niche expertise that is increasingly scarce within the internal workforce. This specific labor market constraint acts as a pivotal catalyst for external engagement as companies seek to mitigate recruitment hurdles. According to the Chartered Institute of Procurement & Supply, in 2024, 58% of hiring managers reported struggling to find the right procurement talent, prompting enterprises to rely on outsourcing partners to bridge these critical capability gaps.

However, a significant challenge hindering broader market expansion is the operational risk associated with data security and the potential loss of control over sensitive supplier information. Integrating external third-party systems with internal corporate infrastructure often creates vulnerabilities that organizations are hesitant to accept. Consequently, complex concerns regarding regulatory compliance and the rigorous management of vendor risks remain a substantial barrier that could impede the full adoption of outsourcing models across sensitive industries.

Key Market Drivers

The Accelerated Integration of AI, Automation, and Digital Procurement Technologies is fundamentally reshaping the Global Procurement Outsourcing Market, shifting the focus from simple labor arbitrage to technology-driven value creation. As organizations strive to modernize their procurement functions, they are increasingly turning to outsourcing partners who offer advanced digital platforms, predictive analytics, and autonomous sourcing capabilities that would be prohibitively expensive to develop in-house. This technological infusion enables enterprises to streamline complex workflows, enhance data visibility, and drive strategic decision-making. According to Ivalua, July 2025, in the 'US Supply Chain Study', 98% of organizations with fully deployed AI tools reported feeling prepared for geopolitical risk, highlighting the critical role of advanced technology in securing operational resilience.

Concurrently, the Mitigation of Global Supply Chain Volatility and Operational Risks has emerged as a paramount driver for external engagement. In an environment characterized by rapid geopolitical shifts and trade disruptions, companies are leveraging the specialized risk management frameworks of outsourcing providers to safeguard their supply lines. These providers offer 24/7 monitoring and deep market intelligence, allowing businesses to proactively navigate uncertainties that could otherwise result in severe financial impact. This urgency is underscored by Interos, January 2025, in the 'Annual Predictions Report', which estimated that geopolitical tensions and instability could potentially lead to global economic damages of up to $1 trillion. Furthermore, the financial pressure to manage these risks efficiently is intense; according to Amazon Business, January 2025, in the 'State of Procurement Report', 44% of procurement leaders cited increased expenses for goods and services as a primary external challenge, reinforcing the need for the cost-effective risk mitigation strategies that outsourcing delivers.

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Key Market Challenges

The operational risk associated with data security and the potential loss of control over sensitive supplier information acts as a significant impediment to the expansion of the global procurement outsourcing market. As organizations integrate their internal infrastructure with external service providers, they are often required to share proprietary data and intellectual property. This necessity creates vulnerabilities, as third-party systems may not maintain the same rigorous security protocols as the client organization. Consequently, enterprises frequently view the outsourcing of strategic procurement functions as a high-risk endeavor that could compromise confidentiality and result in severe regulatory repercussions.

This apprehension directly hampers market growth by limiting outsourcing engagements to non-critical, transactional tasks rather than high-value strategic processes. Decision-makers often choose to retain sensitive operations in-house to mitigate breach risks, effectively capping the revenue potential for service providers. According to the Chartered Institute of Procurement & Supply, in 2025, 29% of procurement managers reported an increase in cyberattacks within their supply chains over the preceding six months. Such data reinforces the reluctance of businesses to fully embrace outsourcing models, thereby stalling broader adoption across sensitive industries.

Key Market Trends

The Emphasis on Environmental, Social, and Governance (ESG) Compliance is aggressively driving market demand as organizations face mounting regulatory pressure to decarbonize their supply chains and ensure ethical sourcing. Enterprises are increasingly outsourcing procurement functions to access specialized sustainability expertise and digital platforms capable of tracking Scope 3 emissions, which are often difficult to manage with internal resources alone. This trend is moving outsourcing beyond simple cost savings toward compliance assurance, requiring providers to deliver rigorous vendor audits and carbon footprint analysis. According to Amazon Business, January 2025, in the 'State of Procurement Report', 66% of procurement leaders reported that their organizations have increased ESG-related targets, necessitating external support to bridge the gap between ambitious sustainability goals and operational execution.

Simultaneously, there is a profound Shift from Transactional Processing to Strategic Partnership Models, where service providers are viewed as value-creation allies rather than simple task executors. This evolution prioritizes long-term collaboration and innovation over short-term labor arbitrage, requiring outsourcing partners to demonstrate high-level soft skills and strategic insight rather than just process efficiency. Consequently, providers are re-engineering their service delivery to focus on category management, supplier innovation, and complex stakeholder negotiation. This structural change is highlighted by the demand for advanced interpersonal competencies; according to the Chartered Institute of Procurement & Supply, February 2025, in the 'Procurement & Supply Salary Guide 2025', relationship management skills were ranked as the most sought-after competency for procurement professionals, reflecting the industry's pivot toward collaborative, high-value operating models.

Segmental Insights

The Cloud segment stands as the fastest growing deployment category within the Global Procurement Outsourcing Market. This rapid expansion is primarily driven by the widespread enterprise shift toward digital transformation and the necessity for scalable operational models. Solutions deployed via the cloud eliminate the requirement for heavy upfront infrastructure investments, thereby significantly reducing the total cost of ownership for organizations. Furthermore, these platforms facilitate remote collaboration and provide real time visibility across supply chains, which is critical for managing complex global supplier networks. Consequently, businesses are increasingly adopting cloud architectures to enhance agility and streamline procurement functions.

Regional Insights

North America maintains a dominant position in the Global Procurement Outsourcing market due to the high concentration of multinational enterprises and the early adoption of business process outsourcing strategies. Organizations in the United States and Canada increasingly utilize external service providers to optimize indirect spend and ensure adherence to internal governance standards. The region benefits from a mature industrial base where companies seek to centralize procurement operations for greater operational efficiency. This demand is further supported by a continued focus on strategic sourcing to mitigate supply chain risks without relying on internal resource expansion.

Recent Developments

• In November 2024, the IBM Corporation collaborated with Dun & Bradstreet to launch D&B Ask Procurement, a generative AI assistant aimed at transforming procurement operations. Built using the company's watsonx Orchestrate and watsonx.ai technologies, this new solution was designed to help procurement teams within the Global Procurement Outsourcing Market make faster, data-driven decisions. The tool synthesizes vast datasets to provide intelligent recommendations, enabling professionals to identify supplier insights, mitigate risks, and drive efficiencies across their supply chains. This collaboration underscored the growing importance of integrating advanced AI and trusted data to optimize procurement processes and manage supplier relationships effectively.
• In September 2024, LogicSource announced a strategic collaboration with Cleveland Clinic to bring leading non-clinical procurement practices and benchmarking to health systems. This partnership combined the company's cross-industry procurement expertise with the healthcare provider's supply chain knowledge to address the specific needs of the healthcare sector in the Global Procurement Outsourcing Market. The collaboration focused on helping health systems apply benchmarks from complex spending categories and optimize non-clinical expenditures, which often represent a significant portion of net revenue. By adopting these advanced procurement strategies, the initiative aimed to improve profitability for health organizations, allowing them to redirect resources toward high-impact patient care initiatives.
• In May 2024, GEP launched the GEP Total Orchestration Solution, an AI-driven engine designed to transform enterprise procurement and supply chain operations. This new offering was developed to orchestrate the entire procurement flow and integrate seamlessly with other applications in the ecosystem, leveraging the company's low-code platform and generative AI capabilities. The solution addressed the Global Procurement Outsourcing Market's need for better user experience by guiding non-procurement professionals through buying decisions and automating complex workflows. The launch aimed to improve collaboration, visibility, and decision-making over enterprise spend, ultimately delivering superior value and efficiency to Fortune 500 and Global 2000 enterprises.
• In February 2024, Accenture completed the acquisition of Insight Sourcing, a strategic sourcing and procurement services provider, to enhance its capabilities within the Global Procurement Outsourcing Market. This strategic move aimed to broaden the company's sourcing and procurement services specifically for private equity companies as well as the consumer goods, retail, technology, and industrial industries. The acquisition added approximately 220 sourcing consultants to the firm's Sourcing & Procurement practice, strengthening its expertise in cost takeout strategies powered by category and supplier market intelligence. The deal also included the integration of a bespoke suite of technology procurement tools to accelerate value realization for clients.

Key Market Players

• Accenture plc
• IBM Corporation
• Infosys Limited
• Genpact Limited
• Wipro Limited
• Tata Consultancy Services Limited
• HCL Technologies Limited
• GEP Worldwide
• Capgemini SE
• DXC Technology Company

By Component	By Deployment	By Organization Size	By Vertical	By Region
Solution Services	On-Premises Cloud	Small & Medium-sized Enterprises (SMEs) Large Enterprises	Banking Financial Services and Insurance (BFSI) Healthcare IT & Telecommunication	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Procurement Outsourcing Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Procurement Outsourcing Market, By Component:

• Solution
• Services

• Procurement Outsourcing Market, By Deployment:

• On-Premises
• Cloud

• Procurement Outsourcing Market, By Organization Size:

• Small & Medium-sized Enterprises (SMEs)
• Large Enterprises

• Procurement Outsourcing Market, By Vertical:

• Banking Financial Services and Insurance (BFSI)
• Healthcare
• IT & Telecommunication

• Procurement Outsourcing Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE