Procurement Software Market

Procurement Software Market Size

Procurement Software Market is projected to grow at a CAGR of 11.2% in the forecast period (2023-2032), with the market size valued at USD 6.78 billion in 2022 and projected to reach USD 19.6 billion by 2032.

Procurement software is a comprehensive solution designed to enhance and simplify the procurement process within businesses. It enables efficient management of supplier relationships, sourcing of products and services, creation of purchase orders, and accurate tracking of expenditures. The primary functions of the software generally include spend analysis, e-procurement, contract management, and supplier collaboration, all aimed at driving cost savings, improving supply chain visibility, ensuring regulation, and reducing manual errors in procurement operations. By automating these critical functions, procurement software allows organizations to make informed decisions, improve procurement strategies, and raise overall operational efficiency.

Market Highlights

Procurement Software Market is expected to exhibit a CAGR of 11.2% during the forecast period, 2022-2032

Procurement Software Market is anticipated to reach USD 19.6 billion, growing at a CAGR of 11.2% during the forecast period owing to the diverse range of solutions that serve the evolving needs of businesses. There is a growing emphasis on regulation, risk management, and sustainability within the procurement software, solving both regulatory requirements and environmental concerns. Additionally, the integration of artificial intelligence and analytics into these systems is enabling automated forecasting, cost reduction, and performance evaluation. In this competitive landscape, organizations are adopting these solutions to boost procurement efficiency, reduce costs, and adapt to the demands of an evolving and globally connected business environment.

Source: Fatpos Global

Procurement Software Market Segmentation

Cloud Segment to Dominate Due to its Transparency, Affordability, and Efficiency

By Deployment, the Procurement Software Market is typically segmented into Cloud and On-premises. The cloud-based segment is dominating the market for its ability to offer enhanced transparency, affordable prices, faster transaction processing, and a wider geographical reach. These benefits have established it as a critical technology for businesses aiming to modernize and improve their procurement processes.

SMEs to Expand at the Highest CAGR Due to Increased Funding and Use of cloud-Based Solutions

Based on the Enterprise Type, the market is divided into Small & Medium Enterprise (SME) and Large Enterprise. Small and medium-sized enterprises (SMEs) are expected to experience substantial growth, with a significant Compound Annual Growth Rate (CAGR). This expansion may be attributed to increased investments and financing in the procurement software industry, as well as the adoption of affordable cloud-based solutions. Such efforts are frequently advocated by industry experts and viewed as helpful by SMEs for simplifying procurement procedures and achieving a competitive advantage in the market. As a result, these factors contribute to the overall growth of the procurement software industry.

Source: Fatpos Global

Market Dynamics

Growth Drivers

Digital Transformation Will Drive Market Expansion

The ongoing digital transformation serves as a key catalyst for the procurement software market. In the dynamic modern business landscape, companies are increasingly recognizing the need to modernize and simplify their procurement operations. Procurement software assumes an essential part in this evolution by automating various aspects of procurement, including purchase requests, supplier interactions, and contract management. This automation not only reduces manual workloads but also encourages precision and uniformity within the procurement process. Additionally, these platforms grant users immediate access to critical data, thereby enhancing the quality of decision-making. Procurement software further includes analytics tools that empower enterprises to extract valuable insights from their procurement data, which promotes well-informed choices and opportunities for cost reduction. Procurement software is a key component of the revolutionary path towards the digitalization of business activities, which is driving its ongoing growth.

Globalization and the Complexity of Supply Chains to Support Market Growth

The procurement software market is expanding rapidly due to the globalization of business activities and the rising complexity of supply chain management. The task of overseeing suppliers, monitoring the movement of goods and services, ensuring adherence to diverse laws and regulations, and reducing risks within a global context has grown considerably challenging. Procurement software offers a holistic solution to confront these complexities, delivering transparency across the entire procurement process and facilitating effective supplier network management. These software solutions include features designed to enhance supply chain operations, reduce delays, and minimize costs. Additionally, they play a vital role in risk management by identifying and actively dealing with potential vulnerabilities within the supply chain.

Restraints

Adoption Problems with Procurement Software are Hindering the Growth of the Industry

A major challenge within the procurement software market is the possible opposition to change and adoption encountered by organizations. Many businesses, particularly those with well-established traditional procurement processes, may face difficulties in transitioning to new software. The implementation of procurement software often requires a significant cultural shift and employee training, which can be met with opposition from those accustomed to manual methods. Additionally, the integration of procurement software with existing systems and processes can be complicated and lengthy, resulting in difficulties during implementation. Organizations may also struggle with data security and legal issues when shifting to digital procurement solutions. Thus, while procurement software offers a host of advantages, tackling resistance to change and managing the switch effectively presents an important obstacle to its adoption.

Recent Developments

• In October 2022, Airtel implemented Oracle's SCM cloud and fusion ERP solutions, which aided them in meeting some of the problems of the 5G era, such as current integration, automation, and agility.
• Workday and McKinsey & Company forged a collaboration in July 2022 to assist clients confronting human resource and financial difficulties. The collaboration will seek to give real-time data insights and suggestions to officials worldwide. The two companies will collaborate on the deployment of Workday Strategic Sourcing by developing a dynamic negotiation analytics engine to analyze procurement bids.
• Coupa Software announced a bundle of next generation spend management products under the coupa's Community.ai brand in February 2022. Community.ai blends data-driven artificial intelligence with the goal of improving person-to-person relationships and transforming B2B communities.
• In January 2022, SAP SE joined with Icertis to improve contract administration, allowing businesses to reduce risk, boost productivity, and fulfill the full spirit of their agreements. This collaboration would assist clients in changing their source-to-pay processes by combining Icertis Contract Intelligence with SAP Customer Experience and SAP Ariba technologies.

Procurement Software Market

Key Players:

• SAP Ariba
• Oracle Procurement Cloud
• Coupa
• GEP
• Jaggaer
• Ivalua
• Zycus
• Determine (Corcentric)
• Basware
• Proactis
• SynerTrade
• SMART by GEP
• Scanmarket
• Vroozi
• Periscope Holdings
• Other Prominent Players (Company Overview, Business Strategy, Key Product Offerings, Financial Performance, Key Performance Indicators, Risk Analysis, Recent Development, Regional Presence, SWOT Analysis)

Regional Analysis

Procurement Software Market is segmented based on regional analysis into five major regions: North America, Latin America, Europe, Asia Pacific and the Middle East and Africa. North America is projected to lead the procurement software market, primarily owing to its strong presence of key market players such as IBM Corporation, Oracle Corporation, and Coupa Software Incorporated. The region benefits from well-developed infrastructure, and there is a growing demand for centralized procurement processes among businesses. This makes North America a key hub for procurement software solutions.

Asia-Pacific (APAC) is expected to experience the fastest growth in the procurement software market during the forecast period. This growth is driven by the presence of developing countries such as China and India, which are still in the early stages of software adoption. One of the significant reasons for this lag is the shortage of skilled procurement professionals in these regions. As these countries continue to evolve and expand their businesses, there is a growing need for efficient procurement solutions, creating significant opportunities for procurement software providers in the APAC region.

 Source: Fatpos Global

Impact of Covid-19 on Procurement Software Market

The COVID-19 pandemic had a significant effect on the global procurement software market. During the outbreak of COVID-19, there was a substantial rise in the number of end-users adopting innovative procurement solutions and competitor banking tools. This surge in adoption included a variety of services, such as scheduling, checklist management, the development of standard protocols, report generation, and the implementation of recommendations. The pandemic served as a catalyst for organizations to rethink their procurement processes, highlighting the need for digital solutions and automation to adapt to the challenges posed by the crisis. These developments emphasize the importance of procurement solutions in a post-pandemic landscape, where businesses seek to strengthen their supply chains, reduce risks, and improve operational efficiency.

Procurement Software Market is further segmented by region into:

• North America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United States and Canada
• Latin America Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – Mexico, Argentina, Brazil, and Rest of Latin America
• Europe Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – United Kingdom, France, Germany, Italy, Spain, Belgium, Hungary, Luxembourg, Netherlands, Poland, NORDIC, Russia, Turkey, and Rest of Europe
• Asia Pacific Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – India, China, South Korea, Japan, Malaysia, Indonesia, New Zealand, Australia, and Rest of APAC
• Middle East and Africa Market Size, Share, Trends, Opportunities, Y-o-Y Growth, CAGR – North Africa, Israel, GCC, South Africa, and Rest of MENA

Procurement Software Market Scope and Segments:

Frequently Asked Questions (FAQ):