Tail Spend Management Solution Market Research Report - By Deployment Type (Cloud, On-Premise), By Spend Category (Indirect Goods and Services, Freelance and Temporary Labor, Facilities and Other Spend), By Organization Size (Small and Medium-sized Enterprises (SMEs), Large Enterprises), By Solution Functionality (Spend Analytics and Optimization, Procurement Automation, Supplier Management, Invoice Processing and Payment Automation), By Industry Vertical (Healthcare, Retail and Consumer Goods, Manufacturing, Financial Services, Technology)

Tail Spend Management Solution Market Overview

As per MRFR analysis, the Tail Spend Management Solution Market Size was estimated at 13.68 (USD Billion) in 2022. The Tail Spend Management Solution Market Industry is expected to grow from 15.16(USD Billion) in 2023 to 38.13 (USD Billion) by 2032. The Tail Spend Management Solution Market CAGR (growth rate) is expected to be around 10.79% during the forecast period (2024 - 2032).

Key Tail Spend Management Solution Market Trends Highlighted

Digital transformation, automation, and the quest for greater cost visibility and optimization are driving the adoption of Tail Spend Management (TSM) solutions. Organizations recognize the significance of controlling their indirect and tail spend, which often represents a substantial portion of their procurement budgets. The increasing complexity of supply chains, the proliferation of suppliers, and the pressure to reduce costs have fueled the demand for TSM solutions.

TSM is witnessing advancements in artificial intelligence (AI) and machine learning (ML), which automate tasks, improve data accuracy, and offer predictive analytics. Cloud-based TSM solutions are gaining traction as they provide flexibility, scalability, and cost savings. Additionally, the integration of e-procurement platforms with TSM solutions streamlines the procurement process, improves compliance, and enhances collaboration with suppliers.

The growing adoption of TSM solutions presents opportunities for vendors to expand their offerings and incorporate innovative features. The integration of supplier diversity programs into TSM solutions, the development of solutions tailored to specific industries, and the exploration of new deployment models are potential areas for growth. By leveraging AI, ML, and data analytics, TSM solutions will continue to evolve, enabling organizations to optimize their tail spend, reduce costs, and gain a competitive advantage.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Tail Spend Management Solution Market Drivers

Digital Transformation

The demand for tail spend management solutions is increasing due to the growing adoption of digital technologies across industries. Presently companies are using these solutions to automate their procurement processes, get visibility into their spending, and reduce costs as the tail-spend management tools allow managing non-core, low-value procurement in the best manner. Often these low-value bids form a significant part of the company’s procurement spend.

Therefore, centralization and automation tools used in tail spend management help the organization reduce the cost on tail spends, enhance efficiency, and experience better control over the purchasing process with an aim of spending less time and getting more results. Migration of the procurement process to the digital environment is a critical factor that contributes to the adoption of cloud-based tail spend management solutions. Many organizations have already taken the first steps in the cloud transformation of their supply chain in pursuance of such advantages as lower operational costs, faster speed of deployment, and flexible hosting.

Many companies rapidly migrate to those solutions that provide real-time access to the data. The group of tail spend management solutions provides the companies with valuable insights, educating them about tail spend and enabling them to monitor and track it successfully. On the other hand, the market growth is also driven by the increasing adoption of e-commerce and online marketplaces. At the same time, this factor puts pressure on the market to accelerate as the tail spend management solutions provide companies with new opportunities to manage large quantities of suppliers and rapidly find new sources of goods and services.

Increased Focus on Cost Reduction

Organizations are increasingly focused on reducing costs and improving their profitability. Tail spend management solutions can help organizations identify and reduce their non-strategic, low-value purchases, which can account for a significant portion of their overall procurement spend. By automating and centralizing the management of these purchases, organizations can improve efficiency, reduce maverick spending, and gain better control over their supply chain. Tail spend management solutions can also help organizations negotiate better deals with suppliers and identify opportunities for cost savings. These solutions provide organizations with real-time visibility into their spending data, which can help them identify areas where they can reduce costs. Additionally, tail spend management solutions can help organizations track and manage their supplier relationships, which can help them identify and mitigate risks.

Growing Complexity of the Supply Chain

The supply chain is becoming more and more complicated, as companies have started to source goods and services from an extensive number of suppliers across several countries. In this context, organizing tail spend purchasing can be really complicated. Tail spend purchasing solutions have emerged to support organizations in managing their spending on small-suppliers providers. These solutions enable companies to access a single platform where to organize all the tail spend purchases.Secondly, these applications ease supplier relationships tracking and management, which helps organizations to detect hazards and to mitigate them. Thirdly, they support organizational compliance with laws and regulations, which is highly critical, in the context of the constantly developing and changing business environment.

Tail Spend Management Solution Market Segment Insights

Tail Spend Management Solution Market Deployment Type Insights

The Tail Spend Management Solution Market is divided into two ecosystem types, cloud and on-premise. The growth of cloud is expected to be the largest during the forecast period. This is because increasingly more companies of all sizes are implementing cloud-based solutions. Cloud-based solutions possess the following advantages as compared to on-premise solutions: less upfront cost, scalability and flexibility. The on-premise is projected to have a substantial market share in the Tail Spend Management Solution Market, while its market share is a forecast to decrease during the forecast period.In 2023, the Tail Spend Management Solution Market was valued at 15.16 billion USD. The Tail Spend Management Solution Market is growing due to such factors as the rising need for companies to optimize their expenditures, the increased adoption of the digital technology and the higher awareness of the benefits of tail spend management solutions. Companies such as SAP SE, Coupa Software Inc., Ivalua Inc., Zycus Inc. and GEP are amongst the leading participants of the Tail Spend Management Solution Market. These organizations offer a variety of tail spend management solution to cater to the needs of companies of all sizes.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Tail Spend Management Solution Market Spend Category Insights

The Tail Spend Management Solution Market segmentation by Spend Category into Indirect Goods and Services, Freelance and Temporary Labor, and Facilities and Other Spend provides valuable insights into the market dynamics. Freelance and Temporary Labor, encompassing contract-based workers and temporary staffing, is anticipated to witness significant growth, reaching a market size of 8.29 (USD Billion) by 2032, expanding at a CAGR of 10.79%. These insights highlight the diverse opportunities within the Tail Spend Management Solution Market and guide stakeholders in making informed decisions.

Tail Spend Management Solution Market Organization Size Insights

The Tail Spend Management Solution Market is segmented by Organization Size into small and medium-sized enterprises (SMEs) and large enterprises. The large enterprises segment held the largest market share in 2023, and is expected to continue to dominate the market throughout the forecast period. This can be attributed to the increasing adoption of tail spend management solutions by large enterprises to improve their operational efficiency and reduce costs. SMEs are expected to witness significant growth over the forecast period, owing to the increasing awareness of the benefits of tail spend management solutions and the growing adoption of these solutions by SMEs to streamline their procurement processes and improve their bottom line.The Tail Spend Management Solution Market revenue for the large enterprises segment is projected to reach USD 18.67 billion by 2032, growing at a CAGR of 10.5% from 2023 to 2032. The SMEs segment is expected to grow at a slightly higher CAGR of 11.2% during the forecast period, reaching a market value of USD 10.47 billion by 2032.

Tail Spend Management Solution Market Solution Functionality Insights

The Tail Spend Management Solution Market is segmented based on Solution Functionality into Spend Analytics and Optimization, Procurement Automation, Supplier Management, and Invoice Processing and Payment Automation. Spend Analytics and Optimization solutions are expected to hold the largest market share in 2023, owing to the increasing demand for data-driven insights to improve procurement efficiency and cost savings. Procurement Automation solutions are also expected to witness significant growth, driven by the need to automate repetitive and time-consuming procurement tasks.Supplier Management solutions help organizations manage their supplier relationships and track supplier performance, which is expected to contribute to the growth of this segment. Invoice Processing and Payment Automation solutions streamline the invoice processing and payment process, reducing errors and improving efficiency, which is expected to drive the growth of this segment.

Tail Spend Management Solution Market Industry Vertical Insights

The Healthcare industry is expected to hold the largest market share in the Tail Spend Management Solution Market in 2023, with a value of 3.27(USD Billion) and is projected to reach a valuation of 7.54(USD Billion) by 2032, growing at a CAGR of 10.9%. The growing adoption of tail spend management solutions in the healthcare sector is attributed to the increasing need to optimize procurement processes and reduce costs, particularly in areas such as medical supplies, equipment, and services. The Retail and Consumer Goods industry is anticipated to be the second-largest segment, with a market value of 2.96(USD Billion) in 2023 and a projected valuation of 6.83(USD Billion) by 2032, growing at a CAGR of 10.8%.The Manufacturing industry is expected to grow at a CAGR of 10.7%, reaching a valuation of 6.21(USD Billion) by 2032. The Financial Services industry is projected to have a market value of 2.35(USD Billion) in 2023 and is expected to reach 5.47(USD Billion) by 2032, growing at a CAGR of 10.6%. The Technology industry is anticipated to grow at a CAGR of 10.5%, reaching a valuation of 4.82(USD Billion) by 2032.

Tail Spend Management Solution Market Regional Insights

The Tail Spend Management Solution Market is segmented into North America, Europe, APAC, South America, and MEA. The North American region is expected to hold the largest share of the market in 2023, and is projected to continue its dominance throughout the forecast period. This is primarily due to the presence of a large number of Fortune 500 companies in the region, as well as the early adoption of tail spend management solutions by businesses in the region. The European region is expected to be the second-largest market for tail spend management solutions, followed by the APAC region.The APAC region is expected to witness the highest growth rate over the forecast period, due to the increasing adoption of tail spend management solutions by businesses in the region. The South American and MEA regions are expected to account for a smaller share of the market, but are expected to grow at a steady pace over the forecast period.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Tail Spend Management Solution Market Key Players And Competitive Insights

Major players in Tail Spend Management Solution Market are focusing on developing innovative solutions to meet the evolving needs of customers. The Tail Spend Management Solution Market industry is characterized by the presence of both established players and emerging companies. Leading Tail Spend Management Solution Market players are investing in research and development to enhance their product offerings and gain a competitive edge. The Tail Spend Management Solution Market is witnessing the emergence of new technologies, such as artificial intelligence and machine learning, which are being integrated into solutions to improve efficiency and accuracy.
These advancements are expected to drive the Tail Spend Management Solution Market development in the coming years. The Tail Spend Management Solution Market Competitive Landscape is expected to remain dynamic, with companies engaging in strategic partnerships, acquisitions, and collaborations to expand their market presence and gain a competitive advantage.Among the leading companies in the Tail Spend Management Solution Market is Coupa Software.
The company offers a comprehensive suite of cloud-based spend management solutions, including tail spend management capabilities. Coupa Software's solutions are designed to help organizations gain visibility into their tail spend, identify savings opportunities, and optimize their procurement processes. The company has a strong customer base and has been recognized for its innovative solutions and customer success. Coupa Software is committed to continuous innovation and is investing in research and development to enhance its offerings and meet the evolving needs of customers.
A notable competitor in the Tail Spend Management Solution Market is SAP Ariba. The company provides a range of spend management solutions, including tail spend management capabilities. SAP Ariba's solutions are designed to help organizations streamline their procurement processes, reduce costs, and improve compliance. The company has a strong presence and has been recognized for its expertise in supply chain management. SAP Ariba is committed to providing innovative solutions and is investing in research and development to enhance its offerings and meet the evolving needs of customers.

Key Companies in the Tail Spend Management Solution Market Include

• Oracle


• Determine


• BravoSolution


• Coupa Software


• SAP


• Supply Dynamics


• Zycus


• Tungsten Network


• JAGGAER


• Rimilia


• Proxima Technologies


• GEP Worldwide


• Ariba


• Ivalua


• Keelvar

Tail Spend Management Solution Market Industry Developments

The tail spend management solution market is projected to grow from an estimated USD 15.16 billion in 2023 to USD 38.13 billion by 2032, exhibiting a CAGR of 10.79% during the forecast period. This growth is attributed to the increasing need for organizations to optimize their spending and reduce costs, as well as the growing adoption of cloud-based and AI-powered solutions.Recent news developments in the market include the acquisition of TailSpend by Coupa Software in 2023, which is expected to strengthen Coupa's position in the tail spend management market. Additionally, SAP Ariba announced an update to its tail spend management solution in 2023, which provides enhanced visibility and control over indirect spending. These developments indicate the growing importance of tail spend management solutions in the market.

Tail Spend Management Solution Market Segmentation Insights

• Tail Spend Management Solution Market Deployment Type Outlook
  
  
  
  • Cloud
  
  
  • On-Premise
  
  
  
  

• Tail Spend Management Solution Market Spend Category Outlook
  
  
  
  • Indirect Goods and Services
  
  
  • Freelance and Temporary Labor
  
  
  • Facilities and Other Spend
  
  
  
  

• Tail Spend Management Solution Market Organization Size Outlook
  
  
  
  • Small and Medium-sized Enterprises (SMEs)
  
  
  • Large Enterprises
  
  
  
  

• Tail Spend Management Solution Market Solution Functionality Outlook
  
  
  
  • Spend Analytics and Optimization
  
  
  • Procurement Automation
  
  
  • Supplier Management
  
  
  • Invoice Processing and Payment Automation
  
  
  
  

• Tail Spend Management Solution Market Industry Vertical Outlook
  
  
  
  • Healthcare
  
  
  • Retail and Consumer Goods
  
  
  • Manufacturing
  
  
  • Financial Services
  
  
  • Technology
  
  
  
  

• Tail Spend Management Solution Market Regional Outlook
  
  
  
  • North America
  
  
  • Europe
  
  
  • South America
  
  
  • Asia Pacific
  
  
  • Middle East and Africa