LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global engineering services market is expected to grow at a CAGR of 3.7% over the next five years due to the increasing outsourcing of non-core activities, greater adoption of the global delivery model, greater private and government spending on infrastructure, and advances in communication technology.
The research report titled ‘Global Engineering Services Market: Procurement Market Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“Advances in communication technology and increased public and private investments in infrastructure across economies are the major driving factors for the market growth,” says lead Technavio procurement specialist Anil Seth for category spend intelligence. “APAC and MEA accounted for more than 30% of the market share in 2016, and is expected to increase over the next five years due to large investments in infrastructure by governments and private players in these regions,” adds Anil.
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Cost saving opportunities in the global engineering services market
The adoption of various cost-optimization levers helps buyers in the global engineering services market realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the global engineering services market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology
Suppliers of engineering services adopt various technologies such as computer-aided design (CAD), industry 4.0, and knowledge-based engineering (KBE) to save up to 7% of the total category spend to buyers.
Suppliers concentrate on making effective use of advanced technological tools for designing and planning the engineering, procurement, and construction processes.
Adoption of negotiation strategies
Intelligent categorization of various negotiation levers can result in quick wins and strategic opportunities for suppliers who can make effective use of these strategies.
Suppliers who maintain a high-quality sub-contracting base and have the constant availability of a well-trained workforce for various buyer requirements such as planning, construction, or maintenance have a higher chance of thriving in the market space.
Bundling of services
Suppliers bundle together related services such as design planning, maintenance, support services, and consulting for cost reduction and consistency in quality. Buyers of engineering services can save up to 15% of the total category spend by enlisting the use of these bundled services.
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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, resellers, and end-users.
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