Procurement Software Market

Procurement Software Market Size:

The global procurement software market size reached US$ 7.5 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 16.1 Billion by 2032, exhibiting a growth rate (CAGR) of 8.8% during 2024-2032. The market is experiencing steady growth driven by the increasing need to maintain lean operations while ensuring quality and compliance, rising emphasis on data-driven decision-making to gain a competitive edge, and the growing complexity of global supply chains.

Procurement Software Market Analysis:

• Market Growth and Size: The market is witnessing strong growth, which can be attributed to the increasing need for cost optimization and efficiency in procurement processes. Additionally, the growing adoption of cloud-based procurement solutions is positively influencing the market.
• Technological Advancements: Innovations like artificial intelligence (AI) and machine learning (ML) are enhancing procurement software capabilities. The integration with Internet of Things (IoT) devices is becoming a norm for real-time data analysis.
• Industry Applications: Procurement software is widely adopted in various industries, including manufacturing, healthcare, and retail. It also finds applications in spend analysis and supplier relationship management.
• Geographical Trends: North America leads the market, on account of the presence of numerous large enterprises and a culture of technological innovations. However, Asia Pacific is emerging as a fast-growing market, driven by the expansion of businesses and digital transformation initiatives.
• Competitive Landscape: Key players in the market are innovating to meet the evolving needs of their clients. They are focusing on enhancing their solutions to provide comprehensive end-to-end procurement platforms that encompass spend analysis, e-sourcing, e-procurement, contract management, and supplier management.
• Challenges and Opportunities: While the market faces challenges, such as data security and privacy concerns, it also encounters opportunities on account of emerging markets and diversifying service offerings.
• Future Outlook: The future of the procurement software market looks promising, with emphasis on remote work and digitalization. Besides this, the escalating demand for cloud-based solutions is expected to propel the market growth.

Procurement Software Market Trends:

Cost optimization and efficiency

Organizations across industries are increasingly turning to procurement software to optimize costs and enhance operational efficiency. These solutions offer streamlined procurement processes, ranging from sourcing suppliers to managing contracts, resulting in reduced procurement cycle times and improved cost control. By automating routine tasks, procurement software frees up valuable human resources to focus on strategic decision-making and supplier relationship management. Moreover, real-time analytics provided by these tools enable data-driven insights, helping companies identify cost-saving opportunities and negotiate better deals with suppliers. In a competitive business landscape, the need to maintain lean operations while ensuring quality and compliance is making cost optimization and efficiency a primary driver for the adoption of procurement software solutions worldwide.

Digital transformation

The ongoing digital transformation journey of businesses worldwide is propelling the growth of the market. As companies are striving to modernize their operations and adapt to the digital age, procurement software plays a crucial role in this transformation. These solutions enable organizations to move away from manual, paper-based procurement processes towards fully digitized and automated workflows. By leveraging cloud-based procurement software, companies are gaining the flexibility to access and manage procurement data from anywhere, fostering collaboration among geographically dispersed teams. Moreover, digital procurement tools facilitate data integration with other enterprise systems, such as ERP and inventory management, creating a seamless flow of information across the organization. In an era where agility, speed, and data-driven decision-making are paramount, procurement software empowers businesses to embrace digital transformation and stay competitive in their respective markets.

Global supply chain complexity

The increasing complexity of global supply chains is strengthening the growth of the market. As companies are expanding their operations internationally, they encounter a multitude of suppliers, regulations, and logistical challenges. Procurement software provides a centralized platform to manage these complexities efficiently. It offers features like supplier risk assessment, compliance monitoring, and real-time tracking of inventory and shipments. This enables organizations to make informed decisions, mitigate risks, and ensure the reliability of their supply chain networks. Moreover, in times of disruptions, such as natural disasters or global crises, procurement software allows for quick adjustments and alternative sourcing strategies. As globalization is shaping the business landscape, the need for robust procurement solutions to navigate supply chain intricacies is becoming increasingly evident, making it a key driver in the market.

Data-driven insights

The growing emphasis on data-driven decision-making is offering a favorable market outlook. Organizations are recognizing the value of data in gaining a competitive edge. Procurement software provides advanced analytics and reporting capabilities, allowing companies to extract valuable insights from their procurement data. This includes trends in supplier performance, spending patterns, and cost-saving opportunities. By harnessing data analytics, businesses can make informed decisions, optimize their procurement strategies, and identify areas for process improvement. Furthermore, predictive analytics within these solutions can forecast future demand, supplier risks, and market trends, enabling proactive actions. As the importance of data-driven insights is rising, procurement software becomes a crucial tool for organizations seeking to stay agile and responsive in a rapidly changing business environment.

Procurement Software Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the global, regional, and country levels for 2024-2032. Our report has categorized the market based on software type, deployment, organization size, and vertical.

Breakup by Software Type:

• Spend Analysis
• E-Sourcing
• E-Procurement
• Contract Management
• Supplier Management
• Others
   

E-procurement accounts for the majority of the market share

The report has provided a detailed breakup and analysis of the market based on the software type. This includes spend analysis, e-sourcing, e-procurement, contract management, supplier management, and others. According to the report, e-procurement represented the largest segment.

E-procurement software facilitates the digitalization of the entire procurement process, ranging from requisition to payment. It allows organizations to automate purchase requisitions, approvals, and supplier selection, ensuring compliance with procurement policies. With real-time visibility into supplier catalogs and pricing, e-procurement streamlines purchasing, reduces maverick spending, and helps negotiate better deals.

Spend analysis software provides organizations with deep insights into their spending patterns. It categorizes and analyzes expenditure data, helping companies identify cost-saving opportunities, supplier performance issues, and compliance breaches.

E-sourcing software assists in the sourcing and selection of suppliers. E-sourcing tools improve transparency in supplier interactions, enhance collaboration, and drive competitive bidding, resulting in cost reductions and better supplier relationships.

Contract management software helps organizations manage and optimize their contracts throughout the entire lifecycle. It automates contract creation, approval workflows, and tracking of key milestones and obligations.

Supplier management software focuses on maintaining strong relationships with suppliers. It allows organizations to assess supplier performance, track KPIs, and manage supplier risks.

Breakup by Deployment:

• Cloud-based
• On-premises
   

Cloud-based holds the largest share in the industry

A detailed breakup and analysis of the market based on the deployment have also been provided in the report. This includes cloud-based and on-premises. According to the report, cloud-based accounted for the largest market share.

Cloud-based procurement software solutions offer scalability, flexibility, and cost-efficiency, making it highly attractive to organizations of all sizes. They are accessible from anywhere with an internet connection, allowing for remote work and collaboration. They require minimal upfront infrastructure investment and are typically maintained and updated by the software providers.

On-premises procurement software solutions, while still relevant, represent the traditional deployment model. They are chosen by some businesses, particularly those with specific security or regulatory requirements, who prefer to have complete control over their software environment.

Breakup by Organization Size:

• Small and Medium-sized Enterprises
• Large Enterprise
   

Large enterprise represents the leading market segment

The report has provided a detailed breakup and analysis of the market based on the organization size. This includes small and medium-sized enterprises and large enterprise. According to the report, large enterprise represented the largest segment as these organizations typically have complex procurement needs due to their extensive supply chains and significant purchasing volumes. They often require robust and scalable procurement solutions to manage a wide range of suppliers, contracts, and procurement processes efficiently. They also invest in procurement software to enhance transparency, compliance, and cost optimization.

Small and medium-sized enterprises represent a growing segment in the market. While traditionally slower in adopting such solutions due to budget constraints and simpler procurement requirements, SMEs are increasingly recognizing the benefits of streamlined and automated procurement processes. Modern procurement software providers offer scaled-down versions tailored as per the needs and budgets of SMEs, making these solutions more accessible.

Breakup by Vertical:

• Retail
• Automotive
• Travel and Logistics
• Electronics
• IT and Telecommunication
• Others
   

The report has provided a detailed breakup and analysis of the market based on the vertical. This includes retail, automotive, travel and logistics, electronics, IT and telecommunication, and others.

Procurement software is used in the retail sector to manage their complex supply chains, source products, and negotiate with suppliers efficiently. These solutions help retailers optimize inventory, track demand, and ensure timely deliveries, which are crucial factors in the fast-paced retail industry.

The automotive industry relies on procurement software to streamline its intricate supply chain operations. From sourcing raw materials for manufacturing to managing component suppliers, procurement software enhances efficiency and reduces costs. It facilitates supplier collaboration and compliance monitoring, which are essential for maintaining the quality and reliability of components in the automotive sector.

The travel and logistics industry benefits from procurement software by optimizing supplier selection, negotiation, and contract management. It assists in managing the procurement of services, such as transportation, accommodation, and catering, ensuring cost-effectiveness and quality assurance.

In the electronics sector, procurement software is instrumental in managing the intricate supply chain involved in manufacturing electronic devices. It helps source components, manage suppliers, and track production schedules to meet market demands. With constant innovation and short product lifecycles, electronics companies rely on procurement software to adapt quickly, reduce production costs, and maintain a competitive edge.

The IT and telecommunication industry leverages procurement software to manage the procurement of hardware, software, and services efficiently. These solutions assist in vendor management, negotiation, and contract compliance.

Breakup by Region:

• North America
  • United States
  • Canada
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Others
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

North America leads the market, accounting for the largest procurement software market share

The market research report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa. According to the report, North America accounted for the largest market share due to the presence of numerous large enterprises and a culture of technological innovations. Organizations in North America seek to optimize procurement processes, reduce costs, and enhance supplier relationships through advanced procurement software solutions. This region is also a hub for software providers, leading to a wide array of options and continuous innovation in the procurement software space.

The Asia Pacific region is experiencing rapid growth in the market, driven by the expansion of businesses, digital transformation initiatives, and the increasing importance of supply chain efficiency. Emerging economies in the region are witnessing substantial adoption, especially among SMEs.

Europe is another mature market for procurement software, characterized by a diverse landscape of industries, each with unique procurement requirements. The region places a strong emphasis on compliance, sustainability, and supplier relationship management, which is impelling the market growth.

Latin America is witnessing steady growth in the market on account of increasing globalization, the need for cost control, and efforts to improve procurement transparency. As organizations in Latin America look to modernize their procurement operations and manage their supply chains more effectively, the demand for procurement software is expected to continue rising.

The Middle East and Africa represent a burgeoning market for procurement software. Organizations in this region are recognizing the benefits of digital transformation in their procurement processes. Factors, such as diversification of economies, infrastructure development, and the desire to reduce reliance on oil-related industries, are supporting the market growth.

Leading Key Players in the Procurement Software Industry:

Key players in the market are innovating to meet the evolving needs of their clients. They are focusing on enhancing their solutions to provide comprehensive end-to-end procurement platforms that encompass spend analysis, e-sourcing, e-procurement, contract management, and supplier management. These companies are investing in artificial intelligence (AI) and machine learning (ML) to offer predictive analytics, supplier risk assessment, and automation of routine procurement tasks. Additionally, they are expanding their cloud-based offerings to cater to organizations seeking scalable, cost-effective, and accessible procurement solutions. They are also emphasizing user-friendly interfaces and mobile capabilities to improve user adoption and accessibility for remote work.

The market research report has provided a comprehensive analysis of the competitive landscape. Detailed profiles of all major companies have also been provided. Some of the key players in the market include:

• Basware Corporation
• Coupa Software Inc.
• Epicor Software Corporation
• GEP Worldwide
• Infor (Koch Industries Inc.)
• Ivalua Inc.
• Jaggaer
• OpusCapita Solutions Oy
• Proactis Holdings Limited
• SAP SE.
• Tradeshift Holdings Inc.
• Workday Inc.
• Zycus Inc.
   

(Please note that this is only a partial list of the key players, and the complete list is provided in the report.)

Latest News:

• March 18, 2020: GEP Worldwide announced that Cheniere Energy, Inc. (Cheniere) has selected GEP SMART™ procurement software platform to enable its sourcing, contracting, project and supplier management functions. 
• December 15, 2021: Zycus Inc., the pioneer in Cognitive Procurement software suite, announced that it has expanded its global presence by opening a new office in Japan. It has taken this decision due to the ever-growing and expanding need for SaaS in Japan and the surrounding regions.

Procurement Software Market Report Scope:

Key Questions Answered in This Report:

• How has the global procurement software market performed so far, and how will it perform in the coming years?
• What are the drivers, restraints, and opportunities in the global procurement software market?
• What is the impact of each driver, restraint, and opportunity on the global procurement software market?
• What are the key regional markets?
• Which countries represent the most attractive procurement software market?
• What is the breakup of the market based on the software type?
• Which is the most attractive software type in the procurement software market?
• What is the breakup of the market based on the deployment?
• Which is the most attractive deployment in the procurement software market?
• What is the breakup of the market based on the organization size?
• Which is the most attractive organization size in the procurement software market?
• What is the breakup of the market based on the vertical?
• Which is the most attractive vertical in the procurement software market?
• What is the competitive structure of the market?
• Who are the key players/companies in the global procurement software market?

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the procurement software market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the global procurement software market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the procurement software industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides insight into the current positions of key players in the market.