Procurement Software Market By Deployment Type (On- Cloud, On- Premise), By Software Type (Supplier Management, Contract Management, E-procurement, E-sourcing, Spend Analysis), By Organization Size (Small and Medium Enterprise(SMEs), Large Enterprise), BY Vertical (Retail, Automotive, Travel and Logistics, Electronics, IT and Telecommunication, Mining), By Region And Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, And Forecast 2023-2032

Procurement Software Market size is expected to be worth around USD 18.0 Bn by 2032 from USD 7.8 Bn in 2022, growing at a CAGR of 8.7% during the forecast period from 2023 to 2032.

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Report Overview

The complex and multidimensional world of procurement software Market is full with complexities that necessitate thorough analysis and scrutiny. Procurement software market applications are indispensable tools that facilitate and expedite the procurement process for businesses of all sizes, across diverse industries and sectors, from startups to large corporations, healthcare to retail, and manufacturing to automotive.At its core, the procurement software market is an intricate and complex system that automates a multitude of procurement-related tasks, from sourcing and requisitioning to purchase order processing and invoicing, in order to save time, reduce errors, and improve the accuracy of procurement data. The increasing demand for cloud-based procurement software market has ushered in a new era of convenience and accessibility, allowing businesses to access the market from anywhere, at any time.

Significant surges of innovation are propelling the industry's evolution in the procurement software market. These innovations feature, among other things, cutting-edge solutions that improve procurement management, expenditure analysis, and strategic sourcing. The procurement software market is an indispensable instrument that enables businesses to reduce costs, boost efficiencies, and become more competitive, a crucial factor in the current fast-paced business environment.

In recent years, the procurement software market has become increasingly focused on ethical concerns and responsible procurement, and businesses are under increasing pressure to ensure that their solutions are transparent, explicable, and accountable. Supplier diversity is one of the most pressing issues in this regard, with companies attempting to integrate diversity and inclusion into their procurement processes by establishing diversity targets, tracking supplier diversity, and collaborating with diverse suppliers.

Companies in the market for procurement software are aware of the need for openness, explanation, and accountability in their operations. To accomplish this, they are providing comprehensive documentation and reporting on their solutions, allowing clients to comprehend how the software operates, what data is being used, and how decisions are made. In doing so, procurement software market players position themselves at the forefront of a swiftly transforming industry that requires constant innovation, versatility, and adaptability.

Driving factors

Increasing demand for procurement efficiency and automation:

Due to the growing demand for procurement automation and efficacy, the procurement software market is expanding significantly. In addition to streamlining the procurement process, procurement automation minimises manual intervention, resulting in cost savings and increased operational efficiency. Increasing demand for procurement software solutions is driven by the need to automate processes, reduce errors, and improve the precision of procurement data. As a consequence, businesses in numerous industries are investing in procurement software to improve their procurement processes.

Cloud-based procurement solutions are on the rise

The proliferation of cloud-based procurement solutions is another market driver. These solutions provide numerous advantages, including reduced infrastructure costs, flexibility, scalability, and straightforward deployment. Cloud-based procurement software provides real-time access to procurement data, resulting in quicker and more informed decisions. In addition, they enable businesses to access procurement software from anywhere and at any time, facilitating the management of procurement processes across geographies.

Increasing use of mobile procurement technology

Mobile procurement technologies are being adopted at an increasing rate, resulting in an impressive market growth rate. Mobile procurement technologies enable procurement personnel to monitor procurement activities while on the move, resulting in cost and time savings. They increase the efficiency of the procurement process by allowing procurement professionals to evaluate and approve purchase orders, invoices, and contracts from their mobile devices. In addition, real-time access to procurement data enables quicker and more informed decision-making, which drives the adoption of mobile procurement technologies.

Need for improved supplier relationship management and collaboration

Increased adoption of supplier relationship management (SRM) solutions is a result of an increased demand for improved supplier collaboration and relationship management. These solutions facilitate better supplier relationships, resulting in improved procurement outcomes. They allow businesses to effectively collaborate with suppliers, administer supplier contracts, and monitor supplier performance. In response to the increasing significance of supplier collaboration and relationship management, businesses in a variety of industries are investing in SRM solutions to streamline procurement processes.

Restraining Factors

Insufficient Qualified Professionals:

The scarcity of qualified professionals is one of the most significant factors restraining the procurement software market. The procurement procedure is intricate and necessitates specialised knowledge and skill. The procurement software market is characterised by a dearth of competent professionals who can utilise the software to achieve optimal procurement outcomes.

Organisations can surmount this constraining factor by investing in training and development programmes for their employees. Training and development programmes can assist employees in acquiring the skills and knowledge necessary to utilise the procurement software effectively. Investing in the training and development of employees can result in increased productivity, enhanced procurement outcomes, and ultimately the expansion of the procurement software market.

Integration Issues

Integration issues are an additional difficult factor impeding the growth of the procurement software market. Multiple software applications are utilised by numerous organisations to manage their business processes. It can be difficult to integrate procurement software with other software applications, resulting in decreased efficacy and slower procurement processes.

Organisations can surmount this constraining factor by adopting an integrated software approach. Using a single software solution to manage all business processes is an example of an integrated software approach. By implementing an integrated software strategy, organisations can eliminate the need for multiple software applications, resulting in increased efficiency, accelerated procurement processes, and the eventual expansion of the procurement software market.

Limited Capabilities

Insufficient functionality is another factor restraining the procurement software market. Numerous procurement software solutions have limited functionality, which can prevent businesses from achieving optimal procurement outcomes. Additionally, limited functionality can result in decreased efficiency and increased costs for businesses.

To overcome this limiting factor, businesses must thoroughly evaluate and select the most suitable procurement software solution. Organisations should select procurement software that offers comprehensive and robust functionality to satisfy their particular procurement requirements. Investing in the appropriate procurement software solution can result in increased efficiency, enhanced procurement outcomes, and ultimately the expansion of the procurement software market.

Cultural Barriers

The procurement software market is additionally hampered by cultural barriers. Different cultures and languages can impede communication and teamwork between procurement teams and suppliers. Organisations may experience misunderstandings, delays, and missed opportunities due to cultural barriers.

Organisations must embrace diversity and inclusiveness to surmount this constraining factor. Investing in cultural awareness and language training programmes can help procurement teams communicate with international suppliers more effectively. By embracing diversity and inclusiveness, organisations can enhance communication and collaboration, resulting in enhanced procurement outcomes and the expansion of the procurement software market.

Covid-19 Impact on Procurement Software Market

Recent disruptions caused by the coronavirus pandemic have resulted in a significant shift in business operations. As a result of the closure of the majority of physical stores, the demand for procurement software solutions and services has skyrocketed. This has resulted in a rise in the number of service providers and a substantial increase in revenue.As they ensure seamless administration of the entire procurement process, from identifying the best suppliers and negotiating contracts to executing and tracking purchases, procurement software solutions have become an integral component of the business ecosystem. In addition, they help businesses obtain a better grasp on their expenditures, reduce costs, and improve compliance.

In response to the pandemic, providers of procurement software are swiftly adapting to the changing requirements of businesses. Despite the fact that certain solutions had limitations and were not suitable for remote work, service providers have adapted their offerings to meet the new demands of businesses.

The need for remote procurement capabilities has escalated as the number of employees working from home has grown. In response, procurement software providers have incorporated features that enable remote work. Businesses now prioritise the ability to access contracts, orders, and invoices from anywhere.The pandemic has hastened the implementation of digital procurement solutions. Businesses are realising the advantages of digitization and automation in terms of enhancing efficiency, reducing manual intervention, and enhancing transparency and accountability. Advanced automation features offered by procurement software vendors include AI-based analytics, real-time data, and automated report generation.Due to the pandemic, global supply chains have been severely tested. The risk of supply chain disruptions has risen to the top of businesses' concerns. Now, providers of procurement software offer solutions that improve supply chain visibility, identify potential bottlenecks, and facilitate more effective risk management.

More companies are incorporating sustainability and social responsibility into their procurement practises. Supplier compliance with social and environmental standards, carbon footprint measurement, and ethical sourcing are some of the capabilities offered by procurement software vendors.The COVID-19 pandemic has created a number of growth opportunities in the procurement software market. In the coming years, the growth of e-commerce, the demand for advanced analytics, and the expansion of the global supply chain are all expected to drive market expansion.

Deployment Analysis

Over the years, the procurement software market has undergone a rapid transformation, with businesses utilising innovative technological solutions to expedite their procurement processes. The On-Premise Segment, which dominates the market, is one of the most important segments of the procurement software market. This segment provides a multitude of benefits, which has led to its widespread adoption, resulting in a complex and diverse deployment environment.

In the procurement software market, the adoption of the On-Premise Segment is driven by the economic development of emerging economies. As they transition to a more efficient and cost-effective method of acquiring products and services, these markets are witnessing a significant increase in demand for procurement software. Emerging economies prefer the On-Premise segment over the Cloud segment because On-Premise solutions are tailored to their specific business needs.

Adoption of the On-Premise Segment in procurement software has become a globally prevalent trend among businesses. In this segment, organisations have control over the procurement process, resulting in solutions that are more localised and customised. In addition, the On-Premise Segment provides greater data privacy and security than other deployment models.

As a result of its unique advantages, it is anticipated that the On-Premise segment will experience the highest growth rate over the next few years. This segment provides enhanced data privacy, enhanced security features, and more control over the procurement process, making it the segment of choice for businesses seeking to maintain a localised and cost-effective procurement process.

Software Analysis.

The Spend Analysis Segment, which has been widely adopted by businesses, is another important segment of the procurement software market. Spend Analysis software enables organisations to analyse their procurement data in order to make informed decisions, optimise procurement processes, and increase cost savings. Understanding the trends and consumer behaviour regarding the Spend Analysis Segment is essential for businesses to make informed decisions.Similar to the On-Premise Segment, the Spend Analysis Segment of the procurement software market is being driven by the economic growth of emerging economies. Businesses in these sectors require solutions to assist them in analysing their procurement data and optimising their processes, which has led to a rise in Spend Analysis software adoption.

Because of its capacity to analyse and optimise procurement data, the Spend Analysis Segment of procurement software has grown in popularity. Utilising this segment, businesses can identify areas of potential cost savings and concentrate their procurement efforts on the areas of greatest need. In addition, businesses can use the data to make well-informed decisions that increase efficiency and productivity.

In the coming years, the Spend Analysis Segment is anticipated to experience the highest growth rate due to its capacity to provide businesses with real-time insights and analysis of their procurement data. As companies endeavour to optimise their procurement processes and realise cost reductions, the Spend Analysis Segment has become an indispensable resource.

Organisation Size Analysis

The SMEs Segment dominates the procurement software market, and businesses prefer to select for software solutions that cater to their specific business needs. Understanding the trend and behaviour of consumers towards the SMEs Segment is essential for companies to make informed decisions. Economic growth in emerging economies is propelling the adoption of the Small and Medium Enterprise (SMEs) Segment in the Procurement Software Market Segment. Small and medium-sized businesses are flourishing in these markets, and they require solutions that are both cost-effective and customised to their business needs.

The SMEs Segment of procurement software has gained popularity as a result of its capacity to provide cost-effective solutions that meet the specific needs of small and medium-sized enterprises. Software solutions that allow for customization, scalability, and simple deployment are preferred by many SMEs.Because of its capacity to provide cost-effective and customised solutions that meet the specific needs of small and medium-sized businesses, the SMEs Segment in the Procurement Software Market is anticipated to experience the quickest growth rate over the coming years. The adoption of procurement software solutions is increasing as SMEs strive for operational efficiency, cost reduction, and increased productivity.

Key Market Segments

By Deployment Type

• On- Cloud
• On- Premise

By Software Type

• Supplier Management
• Contract Management
• E-procurement
• E-sourcing
• Spend Analysis

By Organization Size

• Small and Medium Enterprise(SMEs)
• Large Enterprise

BY Vertical

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

Growth Opportunity

Market Development of Procurement Software

The demand for procurement analytics is rising, the adoption of cloud-based solutions is increasing, and the procurement software market is constantly changing into a dynamic and competitive space. Integration of procurement systems with other enterprise solutions, emerging market opportunities, rising demand for mobile procurement solutions, and leveraging AI and machine learning capabilities all contribute to the market's growth.

Procurement Software in the Cloud

Cloud-based procurement software solutions have emerged as potent instruments with the ability to revolutionise procurement processes. It allows businesses to automate the entire procurement process, from request to payment. Cloud-based solutions have reduced entry barriers and provided small and medium-sized businesses with simple access to procurement technology, resulting in a higher adoption rate. Moreover, cloud solutions are scalable and cost-effective, which makes them appealing to organisations seeking solutions that are simpler to manage and deploy.

Procurement Tools for Mobile Devices

Increasing demand for mobile-based procurement solutions is another factor contributing to the expansion of the market for procurement software. Mobile procurement solutions enable procurement professionals to access vital procurement data swiftly, from any location, and on the go. This technology enables more efficient management of procurement processes, particularly for remote and field-based employees.

Utilising AI and Machine Learning Skills

Utilising artificial intelligence (AI) and machine learning (ML) capabilities is the most recent development in the market for procurement software. AI and ML technologies can analyse vast quantities of procurement data, identify patterns, and provide procurement professionals with recommendations. This intelligence can assist organisations in comprehending supplier performance metrics, automatically detecting potential procurement fraud, and facilitating risk management.

Latest Trends

Need for Greater Transparency and Management of Procurement Procedures

One of the most significant market trends in procurement software is the demand for enhanced visibility and management of procurement processes. Businesses want to know what they are purchasing, from whom they are purchasing it, how much they are spending, and when they are spending it. The procurement software provides businesses with real-time visibility into their procurement activities via a centralised platform. In addition, it provides oversight over the entire procurement procedure, from request to payment. Purchasing software enables businesses to generate purchase orders, approve them, and automatically receive and match invoices. This level of automation reduces the possibility of errors and increases the procurement process's productivity.

Emphasis on Cost Reduction and Savings by Optimising Procurement

Another trend in procurement software is the emphasis on cost savings and cost reduction through procurement optimisation. Procurement is a crucial area for accomplishing the objectives of cost-cutting and profit-boosting for businesses. Purchasing software equips businesses with the tools necessary to optimise procurement processes and generate cost savings. By utilising procurement software, businesses are able to identify cost-saving opportunities, negotiate better contracts, obtain greater discounts, and reduce rogue expenditure. In addition to tracking expenditures and identifying cost-cutting opportunities, procurement software permits companies to monitor their spending.

Integration with Additional Business Systems and Applications

Another trend in the procurement software market is the integration of procurement software with other enterprise systems and applications. Integration with other systems, such as ERP, CRM, and financial systems, further streamlines procurement processes for businesses. Integration of procurement software and supplier management systems promotes business collaboration and communication with suppliers. This allows businesses to reduce the number of errors and time required to complete the procurement process, thereby enhancing the efficiency of their procurement operations.

Regional Analysis

The procurement software market has been analysed by Marketresearch.biz, and based on our findings, we predict that North America will remain the largest region in 2022. We have identified a number of factors that will propel the adoption of procurement software in the region, as well as a few potential obstacles.

Increasing demand for automation of procurement processes is one of the primary drivers of adoption of procurement software in North America. The benefits of procurement software for businesses include increased efficiency, cost savings, and enhanced precision. As a result, we anticipate that more North American businesses will invest in procurement software to automate their procurement processes.

The proliferation of e-commerce and online purchasing also contributes to the expansion of the North American procurement software market. In order to keep up with the pace of business, organisations must streamline their procurement processes in light of the rise of online purchasing. This can be accomplished with the aid of procurement software, which enables organisations to purchase goods and services online swiftly and efficiently.

In addition, we have determined that the rise of the freelance economy contributes to the expansion of procurement software. Freelancers, independent contractors, and temporary employees are increasing in number. This trend has compelled organisations to reconsider their procurement processes, as traditional methods may no longer be sufficient. Even in the contract economy, procurement software can help organisations manage their procurement processes more effectively.

Key Regions and Countries

North America

• US
• Canada
• Mexico

Western Europe

• Germany
• France
• The UK
• Spain
• Italy
• Portugal
• Ireland
• Austria
• Switzerland
• Benelux
• Nordic
• Rest of Western Europe

Eastern Europe

• Russia
• Poland
• The Czech Republic
• Greece
• Rest of Eastern Europe

APAC

• China
• Japan
• South Korea
• India
• Australia & New Zealand
• Indonesia
• Malaysia
• Philippines
• Singapore
• Thailand
• Vietnam
• Rest of APAC

Latin America

• Brazil
• Colombia
• Chile
• Argentina
• Costa Rica
• Rest of Latin America

Middle East & Africa

• Algeria
• Egypt
• Israel
• Kuwait
• Nigeria
• Saudi Arabia
• South Africa
• Turkey
• United Arab Emirates
• Rest of MEA

Market Share & Key Players Analysis

The procurement software market is one of the fastest-growing IT sectors and is likely to keep rising over the next few years. Due to rising demand for procurement solutions across industries, new players have entered the market.

SAP Ariba is a major player in the procurement software market, offering a complete suite of solutions to automate procurement and improve supply chain performance. Many Fortune 500 companies use Ariba's solutions.

Coupa Software, another market leader, offers a cloud-based procurement platform that connects with ERP systems to deliver real-time data and analytics. The platform cuts expenses, boosts efficiency, and improves procurement.

JAGGAER, Ivalua, Determine, Zycus, and GEP are other procurement software market players. JAGGAER provides procurement solutions for healthcare, higher education, and manufacturing. Ivalua provides automotive, aerospace, and transportation procurement and supply chain solutions. Determine's procurement platform automates and improves expenditure management, whereas Zycus provides procurement solutions for healthcare, retail, and energy. Finally, GEP offers financial services, healthcare, and retail procurement solutions.

Top Key Players in procurement software market

• IBM
• Proactis
• Jaggaer
• BravoSolution SPA Coupa Software Inc.
• Infor
• JDA Software Group Inc.
• Tradeshift
• Vinimaya
• Basware
• Oracle
• SAP
• BuyerQuest Holdings Inc.
• Epicor Software Corporation
• Ivalua Inc.
• OpusCapita Group Oy
• Tungsten Corporation Plc.
• Zycus Inc

Recent Development

SAP made headlines in 2021 with the introduction of its new procurement solution, SAP S/4HANA for advanced procurement. The new software promises to streamline procurement processes and provide greater visibility and control over spend management decisions, enabling businesses to make more informed decisions and achieve superior results.

In 2021, Coupa Software, a prominent provider of cloud-based procurement solutions, announced the acquisition of LLamasoft, a provider of software for supply chain design and analytics. Coupa is confident that this acquisition will allow it to offer a more comprehensive suite of solutions to its clients, as well as strengthen its market position and innovation potential.

Amazon Business caused a stir in 2020 by introducing a new procurement feature dubbed "Business Prime." This feature provides free same-day and next-day delivery on eligible products, as well as additional enticing benefits such as spend analytics and purchasing controls. This move is anticipated to further solidify Amazon Business's position as a dominant player in the procurement software market, particularly within the healthcare, education, and government sectors.

In 2020, Jaggaer, a prominent provider of procurement software solutions, made headlines by announcing the acquisition of BravoSolution, an additional provider of procurement software. It is anticipated that this acquisition will assist Jaggaer in expanding its offerings, particularly in the areas of supply chain management, expenditure analytics, and supplier collaboration.

In 2019 Basware, a prominent provider of procure-to-pay solutions, finally made headlines in 2019 when it announced the release of its new analytics solution, Basware Analytics. This solution is intended to assist businesses in gaining a deeper understanding of their procurement processes and making well-informed decisions that lead to improved business outcomes.

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