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The procurement software market is influenced by a myriad of factors that collectively shape its dynamics and growth. One significant factor driving this market is the increasing recognition of the strategic importance of efficient procurement processes within organizations. As businesses seek ways to optimize their supply chain management, control costs, and enhance overall operational efficiency, the demand for robust procurement software solutions has grown. This factor reflects a broader trend in the business landscape, where organizations are placing greater emphasis on the value of streamlined procurement to gain a competitive edge.
Regulatory compliance is another crucial market factor influencing the adoption of procurement software. With the ever-evolving landscape of regulatory requirements and compliance standards, businesses are turning to technology to ensure that their procurement practices align with legal and industry-specific guidelines. Procurement software equipped with compliance management features helps organizations navigate complex regulatory frameworks, reducing the risk of non-compliance and associated legal consequences. As regulatory scrutiny increases, the importance of adherence to compliance standards becomes a key driver in the procurement software market.
The global nature of business operations is a significant factor shaping the procurement software market. As companies expand their reach across borders, they encounter diverse regulatory environments, cultural nuances, and supply chain complexities. Procurement software that supports global operations by providing centralized control, standardized processes, and real-time visibility into international supply chains is in high demand. This factor underscores the importance of solutions that can adapt to the complexities of a globalized business landscape, contributing to the growth of the procurement software market.
Cost savings and financial optimization remain paramount considerations for organizations, and this factor strongly influences the procurement software market. Businesses are actively seeking solutions that enable them to analyze spending patterns, negotiate favorable terms with suppliers, and identify opportunities for cost reduction. Procurement software with advanced analytics and reporting capabilities plays a pivotal role in helping organizations achieve greater financial efficiency. The ability to track and manage expenses, monitor supplier performance, and identify areas for cost-saving contributes significantly to the appeal of procurement software in the market.
Technological advancements and innovation are key factors driving the evolution of the procurement software market. The integration of cutting-edge technologies such as artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA) enhances the capabilities of procurement solutions. These technologies empower organizations to automate routine tasks, predict future trends, and make data-driven decisions, leading to increased efficiency and effectiveness in procurement processes. As technology continues to advance, the market is likely to see further innovation, with vendors incorporating new features and functionalities to stay ahead in the competitive landscape.
Vendor consolidation and strategic partnerships are notable factors influencing the procurement software market. The industry has witnessed a trend of mergers and acquisitions as well as collaborations between software vendors to expand their product offerings and strengthen their market presence. This factor contributes to market consolidation, providing buyers with a diverse range of comprehensive solutions from integrated platforms. The strategic alliances formed between vendors also enable them to leverage each other's expertise and technology, fostering innovation and addressing a broader spectrum of procurement needs.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Growth Rate | 10.4% Base Year 2019 Forecast Period 2022-2032 Historical Data 2018 Forecast Units Value (USD Billion Report CoverageRevenue Forecast, Competitive Landscape, Growth Factors, and Trends Segments Covered By Deployment, Type Geographies Covered North America, Europe, Asia-Pacific Key VendorsCoupa Software Incorporated (U.S.) Epicor Software Corporation (U.S.) JDA Software Inc. (U.S.) Zycus Inc. (U.S.) SAP SE (Germany) Mercateo AG (Germany) Oracle Corporation (U.S.) Infor Inc. (U.S.) IBM Corporation (U.S.). Key Market Opportunities Mobile Procurement Software Applications Key Market Drivers Centralized Procurement Process |
Procurement Software Market Highlights:
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.
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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