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Procurement Software Market Overview
The Procurement Software Market is projected to grow from USD 7.0 billion in 2024 to USD 15.2 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 10.2% during the forecast period (2024 - 2032). Additionally, the market size for procurement software was valued at USD 6.1 billion in 2023.
According to Market Research Future (MRFR) in its latest report. Procurement software lets companies purchase a set of goods and manage their inventory digitally. Automation of certain tasks in the procurement process and consolidation of supply chain management are prime drivers of the market. Curtailing of losses due to inventory control and volatile economic situations can support the industry demand over the forecast period.
Figure 1: Procurement Software Market Size, 2022 - 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review
COVID-19 Analysis
The COVID-19 pandemic has severely disrupted the logistics and supply chain of major companies with goods exceeding their expiration data and rising costs of transportation. Lockdowns initiated by governments have resulted in losses for the company with warehouses becoming overcrowded. Procurement software can assist companies in identifying goods with the highest liabilities and accorded with preventive measures.
The shift to a digital mode of procurement can lead to adherence to quarantine rules and tracking goods received note (GRN) and invoice reference number (IRN). This can ensure productivity during lockdown period by managers. Automation of procurement payment process can drive the sales of procurement software over the forecast period. E-procurement technology can enable organizations for contacting suppliers of their choice and communicate in real-time for their sourcing needs. The technology will see greater adoption rates even after the pandemic as buyers look to strengthen their supply chains and reduce risks.
Market Dynamics
- Drivers
Centralized Procurement Process
Procurement software offers companies a tool for managing prices of raw materials and provides a cost-benefit analysis throughout the production cycle. The entry of new players and procurement of goods can drive the demand for procurement software. The penetration of digital logistics and support software, establishment of network infrastructure, and adoption of new technologies can bode well for the market. Asia Pacific being one of the fastest growing regions is likely to embrace digitization for saving on expenses, streamlining of the procurement process, and prevention of duplicated records. This makes the region very lucrative for the global market.
- Opportunities
Mobile Procurement Software Applications
Mobile procurement software applications are expected to be opportune for players in the global procurement software market. This can be attributed to encouraging policies by governments supporting digitization due to transparency in accounts and integration of artificial intelligence. International transactions and synergy among suppliers and procurement vendors can drive the trend in the forthcoming years. E-procurement can streamline steps of sourcing to payment and create value for enterprises. The platform can bring in transparency to suppliers and improve efficiency by maintaining relationships with partners. Procurement of sanitizers, hand masks, and other protective clothing for curbing the spread of the disease and reopen production units are likely to witness a surge during the pandemic.
- Restraints
Lack of Skilled Professionals
Lack of skilled professionals who specialize in operating software and maintaining positive relationships between enterprises and their suppliers can restrain the global procurement software market growth. Hiring of the right people by procurement managers for their industry and acceleration of digital initiatives can bode well for the market.
Segment Analysis
- By Deployment
On-premise Segment Currently Dominates Global Market
The on-premise segment is expected to retain its lead in the market till the end of the forecast period owing to preference of on-premise installation of the software by organizations. Organizations can train their personnel in utilization of the software for purchase and pricing of goods for acquiring large quantities at nominal rates.
- By Software Type
Spend Analysis to Induce Massive Demand
The spend analysis software is expected to attract massive demand and display 10.6% CAGR over the forecast period. The ability to pinpoint purchase patterns and opportunities for cost savings can drive the segment growth. Compliance with latest laws and organization of spending data allows companies to make informed decisions. Moreover, the categorization of maintenance, repair, and operations (MRO) spending according to small and medium suppliers can improve the quality of data.
- By Organization Size
SMEs to Lead in Global Market
SMEs are expected to lead in the global procurement software market and exhibit 10.3% CAGR over the forecast period. Rise of cloud deployments and efforts for increasing market share can drive the demand for the software by the segment. Moreover, simplification of contracts, new sources of supply, reduced invoice errors, and improved working capital are advantages attracting SMEs towards the software.
- By Vertical
Retail to Lead in Market Revenues
The retail segment is expected to dominate the market revenues owing to demand for centralized procurement processes and efficient management of the inventory. Integration of business processes and transparency in supply chains can drive the segment growth. The use of the software for automating tasks and procuring best rates from the vendor can bolster the market demand in the segment.
Regional Analysis
APAC to Register Fastest Growth Rate
APAC is expected to display a 10% CAGR over the forecast period due to large number of logistic firms based in China and India. Setup of manufacturing units and investments in the procurement software market by global players can be attributed to the growth trajectory. The increasing purchasing power of customers in the region can bode well for the market in the coming years. Mid-sized companies in the region can control the spending and benefit from real-time visibility in the procurement process.
Competitive Landscape
Global Procurement Software Market is less dense owing to technological integration being at a nascent stage in the supply chain. Partnerships, mergers, and product innovation are prime strategies deployed by players to gain the competitive edge. Development of online portals for improving productivity and being in touch with esteemed clients can play a pivotal role in maintaining relationships.
Key Companies Covered in the Report
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Coupa Software Incorporated (U.S.)
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Epicor Software Corporation (U.S.)
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JDA Software Inc. (U.S.)
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Zycus Inc. (U.S.)
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SAP SE (Germany)
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Mercateo AG (Germany)
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Oracle Corporation (U.S.)
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Infor Inc. (U.S.)
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IBM Corporation (U.S.)
Recent Developments
February 2024:
Microsoft introduced new AI-powered features in its Dynamics 365 procurement solutions, promising smarter spending decisions and smoother workflows.
January 2024:
Coupa Software, a major player, integrated machine learning into its platform to predict supplier risks and identify cost-saving opportunities. Basically, AI is becoming your procurement pal!
December 2023:
Ivalua Inc. unveiled its "Autonomous Procurement" solution, automating tasks like purchase order approvals and invoice processing. Robots taking over procurement? Not quite, but definitely lending a helping hand.
Report Scope
Global Procurement Software Market report by MRFR analyzes the shift to digitization and move by large buyers and contractors for adopting software for management of business tasks. The report takes into consideration of trends, niches, opportunities, and challenges for estimating market revenue and growth trajectories. It is segmented in the following manner:
By Deployment
- On-cloud
- On-premise
By Software Type
- Supplier Management
- Contract Management
- E-procurement
- E-sourcing
- Spend Analysis
By Organization Size
- Small and medium size Enterprises (SME)
- Large Enterprises
By Vertical
- Travel & Logistics
- IT & Telecommunications
- Electronics
- Automotive
- Retail
- Mining
- Others
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