Procurement Software Trends and Forecast
The future of the global procurement software market looks promising with opportunities in the manufacturing, healthcare, retail, government, and financial service sectors. The global procurement software market is expected to reach an estimated $11.5 billion by 2030 with a CAGR of 10.5% from 2024 to 2030. The major drivers for this market are growing adoption of cloud based technologies among industries and rising preference for ERP based electronic procurement software.
• Lucintel forecasts that, within the deployment type category, cloud-based is expected to witness the higher growth over the forecast period due to its growing adoption among enterprises because of its affordability, transparency, quick transaction times, and increased geographic reach.
• Within the end use industry category, manufacturing will remain the largest segment due to widespread use of procurement software in this sector for automating manual tasks, streamlining workflows, and giving real-time insights into procurement operations.
• In terms of regions, North America will remain the largest region over the forecast period due to growing preference for centralized procurement processes among enterprises and presence of key players in the region.
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Emerging Trends in the Procurement Software Market
The procurement software market is evolving due to a few emerging trends that are transforming its landscape. Understanding these emerging trends will help companies become competitive and productive.
• Cloud-Based Solutions: The shift toward cloud-based procurement software is significant due to its cost-effectiveness and scalability. Cloud solutions offer flexibility in managing procurement processes and accessing data from anywhere, which is crucial for remote work environments and global operations.
• Blockchain for Transparency: The integration of blockchain technology introduces more transparency and security in procurement processes. It provides the ability to track transactions and ensure compliance to reduce fraud and build stakeholder trust.
• Sustainability Focus: Sustainability has become a highlight in procurement software, with a variety of features being introduced for green procurement. This trend aligns with global environmental goals and forms the basis for regulatory requirements, responsible sourcing, and supply chain management.
• Robotic Process Automation: RPA is increasingly applied to automate procurement tasks, such as order processing and invoice management, which are repetitive in nature. Such automation reduces errors since much of the information processed is mechanical in nature and frees up human resources for more strategic activities.
These trends represent transformative forces in the procurement software market that boost efficiency, transparency, and sustainability. Additionally, these trends promote innovation and adaptability due to the dynamic nature of market demands and technological advancements.
Recent Developments in the Procurement Software Market
Recent changes to procurement software reflect developments in technology and changing market requirements. These changes set the future direction for procurement processes globally.
• AI-Driven Analytics: Recent advancements in AI have driven more sophisticated analytics in procurement software. This provides deeper insights into supplier performance and procurement patterns, helping to leverage better decision-making and strategic planning.
• Integration of Blockchain: Blockchain integrated into procurement transactions has made them not only more secure but also more transparent. This development helps organizations mitigate risks and ensure compliance with industry regulations through an immutable ledger of transactions.
• Mobile Procurement Solutions: The need to develop mobile-friendly procurement solutions arose with the growth of mobile technologies. These platforms allow users to manage procurement activities on the go, enhancing accessibility and flexibility.
• Sustainability Procurement Features: New procurement software offers features aimed directly at sustainability, such as carbon footprint tracking and environmental performance appraisal from suppliers. This helps organizations maintain regulatory requirements and achieve corporate social responsibility objectives.
• Improved User Experience: There is an increasing focus on user experience through the development of intuitive interfaces, personalized dashboards, and other enhancements. An improved user experience positively influences higher adoption rates and more productive use of procurement software.
In other words, these changes have created forces of efficiency, security, and satisfaction in procurement software. They represent a small token of innovation and responsiveness to emerging market needs.
Strategic Growth Opportunities for Procurement Software Market
Procurement software is segmented into various applications. Identifying opportunities will help businesses and investors stay aligned with emerging market trends.
• Better Supplier Management: The solution space has significant growth potential in supplier management. Advanced tools featuring real-time supplier performance analytics and risk management will have a considerable impact on improving the quality of supplier relationships and procurement outcomes.
• E-Procurement Solutions: E-procurement systems are on the rise as companies seek better ways to manage their buying processes. These solutions enable smoother procurement activities, reduce transaction costs, and provide enhanced visibility over spending.
• Contract Management: The use of contract management software will remain a growth opportunity as the solution helps organizations manage the creation, negotiation, and compliance of contracts. Advanced functionality includes automated tracking of contracts and alerts on their compliance.
• Spend Analytics: Spend analytics are in high demand because organizations aim to optimize their procurement spending. The reason is simple: advanced analytics surface insights into spending patterns and potential cost savings, driving strategic procurement decisions.
• Risk Management Solutions: As supply chain risks become more complex, there is a growing need for sophisticated risk management solutions. These tools help organizations identify, assess, and mitigate risks associated with suppliers and procurement activities.
These strategic growth opportunities drive innovation in procurement software. Innovation is seen as enhancing efficiency and addressing major challenges in procurement process management.
Procurement Software Market Driver and Challenges
Various factors drive and inhibit the growth and development of the procurement software market. These factors include technological, economic, and regulatory environments.
The factors responsible for driving the procurement software market include:
• Technological Advancements: Rapid advancements in technologies like AI, cloud computing, and blockchain drive the growth of procurement software. These technologies enhance efficiency, accuracy, and transparency in procurement processes.
• Globalization of Supply Chains: As supply chains become more global, there is a growing need for advanced procurement software that can manage complex, multinational operations. This demand drives the development of more robust and flexible solutions.
• Cost Reduction Focus: With a greater focus on saving procurement costs, organizations need better visibility and control over spending. Modern procurement software with advanced analytics and spend management features supports this focus area for organizations.
• Regulatory Compliance Requirements: One of the reasons organizations adopt procurement software is the necessity of compliance with stringent regulatory requirements, which such software helps monitor and ensure. This feature greatly helps organizations avoid penalties and maintain industry standards.
Challenges in the procurement software market are:
• Integration Issues: Integrating new procurement software into existing systems can lead to compatibility problems, hindering implementation and efficiency. Smooth integration is necessary for proper functionality.
• Data Security Issues: Since procurement software handles sensitive data, one of its greatest challenges is ensuring data security to prevent breaches. Organizations invest in strong security measures to protect this information.
• Change Management: Employees may resist changes when transitioning from legacy systems to new procurement software. Effective change management strategies are necessary for smooth transitions and user adoption.
Technological advancements and the drive toward automation are major growth drivers in the procurement software market. However, challenges relating to integration, data security, and change management must be addressed for successful implementation and further market growth.
List of Procurement Software Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies procurement software companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the procurement software companies profiled in this report include-
• Basware
• SAP
• Coupa Software
• Oracle
• Ivalua
• JAGGAER
• Workday
• GEP
• Zycus
• Infor
Procurement Software by Segment
The study includes a forecast for the global procurement software by deployment type, end use industry, and region.
Procurement Software Market by Deployment Type [Analysis by Value from 2018 to 2030]:
• On-Premises
• Cloud-Based
Procurement Software Market by End Use Industry [Analysis by Value from 2018 to 2030]:
• Manufacturing
• Healthcare
• Retail
• Government
• Financial Services
• Others
Procurement Software Market by Region [Analysis by Value from 2018 to 2030]:
• North America
• Europe
• Asia Pacific
• The Rest of the World
Country Wise Outlook for the Procurement Software Market
The procurement software market is undergoing rapid transformation due to technological innovations and the fast-changing global economic landscape. However, regional variations in priorities and challenges exist. Recent developments in key countries are as follows:
• United States: AI-driven procurement tools are increasingly adopted in the US market to drive data analytics and automation. This shift aims to facilitate efficiency, cost reduction, and faster decision-making. Cloud-based solutions are gaining traction due to their scalability and flexibility.
• China: China is integrating procurement software with blockchain to enable traceability and visibility, which supports the country’s initiative for supply chain security and compliance amid global trade tensions and local market demands.
• Germany: The German procurement software market focuses on sustainability and green procurement practices, with new solutions helping organizations follow environmental regulations and reduce their carbon footprint in line with the country’s broader environmental objectives.
• India: Driven by demand for digital transformation, the Indian market is experiencing high growth in the adoption of procurement software. Key developments include mobile-enabled solutions and platforms that cater to the needs of small and medium-sized enterprises, improving efficiency and reach.
• Japan: Japan integrates procurement software with advanced robotics and IoT technologies to support its workforce, which is aging. This automation of routine tasks enhances supply chain management.
Features of the Global Procurement Software Market
Market Size Estimates: Procurement software market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends (2018 to 2023) and forecast (2024 to 2030) by various segments and regions.
Segmentation Analysis: Procurement software market size by deployment type, end use industry, and region in terms of value ($B).
Regional Analysis: Procurement software market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
Growth Opportunities: Analysis of growth opportunities in different deployment types, end use industries, and regions for the procurement software market.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the procurement software market.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What is the procurement software market size?
Answer: The global procurement software market is expected to reach an estimated $11.5 billion by 2030.
Q2. What is the growth forecast for procurement software market?
Answer: The global procurement software market is expected to grow with a CAGR of 10.5% from 2024 to 2030.
Q3. What are the major drivers influencing the growth of the procurement software market?
Answer: The major drivers for this market are growing adoption of cloud based technologies among industries and rising preference for ERP based electronic procurement software.
Q4. What are the major segments for procurement software market?
Answer: The future of the procurement software market looks promising with opportunities in the manufacturing, healthcare, retail, government, and financial service sectors.
Q5. Who are the key procurement software market companies?
Answer: Some of the key procurement software companies are as follows:
• Basware
• SAP
• Coupa Software
• Oracle
• Ivalua
• JAGGAER
• Workday
• GEP
• Zycus
• Infor
Q6. Which procurement software market segment will be the largest in future?
Answer: Lucintel forecasts that cloud-based is expected to witness the higher growth over the forecast period due to its growing adoption among enterprises because of its affordability, transparency, quick transaction times, and increased geographic reach.
Q7. In procurement software market, which region is expected to be the largest in next 5 years?
Answer: North America will remain the largest region over the forecast period due to growing preference for centralized procurement processes among enterprises and presence of key players in the region.
Q.8 Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 11 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the procurement software market by deployment type (on-premises and cloud-based), end use industry (manufacturing, healthcare, retail, government, financial services, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
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