ID: MRFR/ICT/2242-CR | February 2020 | Region: Global | 135 pages
Global Procurement Software Market is expected to reach 14.10 billion with a 10.1% CAGR over the forecast period (2020-2030), 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Coupa 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.), and IBM Corporation (U.S.) are prominent players of the global procurement software market.
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 Software Type
By Organization Size
Frequently Asked Questions (FAQ) :
IBM Corporation (US), Oracle Corporation (US), SAP SE (Germany), Coupa Software Incorporated (US), Infor Inc. (US), Epicor Software Corporation (US), Zycus Inc. (US), JDA Software Inc. (US), and Mercateo AG (Germany).
On-cloud and on-premise are the primary segments mentioned with respect to deployment.
The procurement software market in North America is the largest, on account of the presence of key market players such as IBM Corporation, Oracle Corporation, and Coupa Software Incorporated. Moreover, developed infrastructure and rising demand for centralized procurement process in the region is further expected to propel the growth of procurement software market in North America shortly.
Adoption of blockchain and AI in procurement and supply chain process and E-procurement are the emerging trends having a positive impact on market growth. Review reporting and tail spend management are the use cases of the procurement software market.
The Global Procurement Software Market is expected to expand at a 10.1% CAGR during the forecast period from 2020 to 2030.
The procurement software market is characterized by the presence of many regional and local vendors. The market is highly competitive with all the players competing to gain market share. Intense competition, and rapid advances in technology are key factors that influence the market growth. The vendors compete based on cost, product quality, reliability, and aftermarket service. It is crucial for the vendors to provide cost-efficient and high-quality analytical solutions, to survive and succeed in an intensely competitive market environment. According to MRFR analysis, the growth of the market vendors is dependent on the market conditions, and industry development. Companies such as IBM Corporation, Oracle Corporation, SAP SE, Coupa Software Inc., and Zycus Inc., are some of the top players in the market, competing in terms of quality, price, services, and technology.
IBM Corporation occupied the first rank in the procurement software market in 2017. IBM is a global leader in providing information technology, innovation, and research & development. The company leads the market by providing procurement and strategic sourcing services. The company delivers services highly personalized, enriched user experience by processing and analyzing real-time data. The services offer its customers, highly defined pro-active solutions with informed decision-making, maximizing preferred suppliers. IBM is also focused on strategic partnerships for providing enhanced solutions that drives business growth by exploring new sources of procurement value. For instance, partnership with Coupa Software Inc., enables IBM’s procurement solution to integrate with Coupa to transform procurement and drive enterprise value, cost-savings, and revenue.
Oracle Corporation has gained the second rank in the procurement software market. The company also recognized a provider in computer technology and involved in the provision of products and services in the field of information technology. The company has diverse geographical presence and robust technical expertise that enables them to deliver high quality products through innovative solutions. The company adopts organic and inorganic approach for delivering quality procurement solutions that allows its customer to integrate and streamline its procurement processes. These approaches help them to retain the customers as well as increase its customer base and strengthen its technical capabilities.
SAP SE has attained rank third in procurement software market. SAP SE is also globally recognized as one of the leading giants in business application and analytics software. The company's delivers licenses providers for on-premise software products, solutions, enterprise cloud services, consulting, software development agreements, training, and other services. The company offers procurement software through its subsidiary named as SAP Ariba and offers high-quality products to buyers and suppliers. The collaborative approach allows new opportunities to explore new growth opportunities and form new relationship with industrial application. The company offers improved quality solutions such as SAP Ariba Buying and Invoicing, SAP Buying Ariba and others. These solutions offer its customers, secure sourcing and procurement processes through on-cloud deployment that helps in providing better communication among suppliers, improve transparency, and collaboration with greater efficiency and effectiveness.
Coupa Software Incorporated operates through one segment namely cloud-based business spend management platform (BSM platform) that connects hundreds of organizations with more than 3 million suppliers globally that helps them to attain fourth rank in the procurement software market. The company primarily focus organic and inorganic growth approaches. Adopting these approaches helps the Coupa software to deliver world class Coupa Procurement solution that is recognized as a leading enterprise procure-to-pay solution. This solution offers its customer greater convenience for e-commerce services and provides improved processes that enable the business to save and time.
Zycus Inc., a privately held company, has acquired fifth rank in the procurement software market. The company delivers wide range procurement solutions including applications for strategic and operational aspects such as e-procurement, e-invoicing, spend analysis, e-sourcing, contract management, supplier management and financial savings management. The company has wide range of client partners in various industrial verticals such as manufacturing, automotive, banking and finance, oil & gas, food processing, electronics, telecommunications, chemicals, health and pharma, among others. The company focuses on retaining talent, increasing R&D investment that helps in increasing its product innovation to develop improvised procurement solution that create greater business impact on the deployment of procurement solution.
Other prominent players in the procurement software market include Infor Inc., Epicor Software Corporation JDA Software Inc., and Mercateo AG. These companies also focus on providing wide range of software, solutions, services and platform related to procurement software, thereby contributing significantly in generating high market value for procurement software.