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The global business spend management (BSM) software market size was valued at USD 17.07 billion in 2021. The market is projected to grow from USD 18.66 billion in 2022 to USD 39.05 billion by 2029, exhibiting a CAGR of 11.1% during the forecast period. Based on our analysis, the global market exhibited an average growth of 8.7% in 2020 as compared to 2019.
Business Spend Management (BSM) software is used to collect, collate, maintain, categorize, and evaluate spend data to minimize procurement costs, control and monitor workflows, regulate compliance, and improve efficiency. The solutions considered in the scope include procure-to-pay solutions, supplier & risk management, travel & expense management, contract & e-tender management, spend management/spend analytics, and others (source-to-contract, treasury management).
In the study, we have considered various Business Spend Management software offered by the market players such as SAP SE’s SAP ARIBA, SAP Concur, SAP Fieldglass, and Coupa Software Inc.’s suite of comprehensive business spend management platforms. In addition, our study also covered GEP’s GEP SMART, GEP NEXXE, and Proactis Holdings Limited’s purchase-to-pay system and source-to-contract system.
COVID-19 Pandemic to Create Unprecedented Long-term Opportunities for Market Players
In 2020, COVID-19 had a moderate influence on the BSM software market, resulting in an increase in spend management concerns and risk of loss. This trend is predicted to continue in the second half of the year, as demand rises and companies are concerned about effectively managing their spending. The pandemic had a profound impact on the value chain of the BSM software market. The pandemic had a moderate impact on the U.K. market. For instance,
Post-COVID-19 pandemic, the need for the solutions and services was higher than assumed in 2021, which reflected a strong business performance that is expected to propel the revenue growth. For instance,
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Rising Adoption of AI and Cloud-based Solutions to Propel the Market Growth
The velocity of change in spend management of businesses has been astounding as the adoption of technologies, such as Artificial Intelligence (AI), cloud, Machine Learning (ML), Robotic Process Automation (RPA), and the Internet of Things (IoT), continues to surge in the businesses. For instance,
Companies use the capabilities of a digital platform to develop flexible procurement procedures that will meet future demands. SAP Analytics Cloud provides enterprises with overall spend visibility across departments, spend categories, and suppliers to provide real-time spend insights. For instance,
By managing business spend, automation has clearly emerged as a crucial enabler for enhancing productivity and achieving critical business goals while lowering effort and expenses associated with manual and repetitive procedures. As a result, the most accessible parts of automation, such as AI, cloud, and RPA analytics tools, have led the adoption push.
AI, as a more complicated concept, is likely to achieve roughly half the adoption rates for digital spending initiatives in the coming years, with greater industry awareness.
Thus, the aforementioned factors are expected to be a trend in the forecast period.
Increased Usage of Spend Analytics in Businesses to Propel the Market Growth
Spend management is an umbrella term used to refer to the process of requesting and approving spend, capturing transaction details, making payments, booking, tracking, and analyzing business expenditure. Currently, businesses are becoming more data-driven in the way they handle their finances, particularly when it comes to their spending. According to Statista, the demand for Big Data and business analytics solutions would reach USD 274.3 billion by the end of 2022.
Organizations are improving their supply chain management by utilizing spend analysis tools. It provides real-time information and visibility into product lines, service offers, and supplier relationships. As a result, more control over various processes in the supply chain is gained. Spend analytics provides a clearer picture of the supply chain's sourcing, contracting, and purchasing operations. This enables refocusing on resources to address bottlenecks in present initiatives. Companies are developing new tools to help them manage their spending. For instance,
Lack of Technical Skills to Inhibit Market Growth
Procurement teams in businesses are swamped with normal purchasing tasks, supplier management, purchasing order processing, and so on. Expenditure management, on the other hand, necessitates committed efforts to define, collate, assess, and execute spending opportunities for data savings on a regular basis.
According to Ivalua, a prominent provider of spend management cloud solutions, the majority of the U.K. organizations (86%) encounter considerable impediments to building digital procurement skills. According to the research, one of the primary challenges restricting the U.K. businesses from acquiring the digital skills they want is a paucity of digitally savvy individuals (31%), lack of knowledge of the abilities required (13%), and lack of training for technical and soft skills (28%). Furthermore, more than half (55%) of the U.K. businesses believe that digital skills in procurement are less advanced than in other departments.
When a business person does not have a thorough understanding of the company's spending, it is difficult to assess it or develop a strategy for managing it. Unfortunately, a prevalent issue is the lack of real-time visibility. This is especially true for growth-stage firms with large capital expenditures (CAPEX), limited or nonexistent finance staff, and lack of specific systems to handle spending and budgeting.
These problems also contribute to disorganized financial records and insufficient spend data. Thus, the aforementioned factors are expected to hamper the market growth.
Integration of Advanced Technologies Expected to Create Demand for BSM Solutions
By component, the market is classified into solutions and services. Solutions segment is expected to hold major market share during the projection period owing to increasing demand for spend management solutions such as spend analytics, travel & expense management, and others.
Solutions segment is classified into procure-to-pay solutions, supplier & risk management, travel & expense management, contract & e-tender management, spend management/spend analytics, and others (source-to-contract, treasury management).
The market players are focusing on product enhancement, integration of cutting-edge technologies across the solutions to increase the customer base, and demand for solutions. For instance,
Cloud-based Deployment to Grow with Higher Growth Trajectory
By deployment, the market is divided into on-premise and cloud.
Cloud-based BSM software deployment is expected to surge during the forecast period. On-premise deployments are anticipated to showcase steady growth in the coming years due to increasing adoption of cloud technology by small & medium-sized enterprises. Growing adoption of cloud-based software across organizations due to COVID-19 pandemic will drive the market growth in the coming years. For instance,
SMEs to lead Due to Rapid Adoption of Cloud-based BSM Solutions
By enterprise size, the market is segmented into small and medium enterprises and large enterprises. SMEs segment is expected to grow with remarkable CAGR owing to growing investment and funding led by leading organizations. For instance,
Large enterprises segment held the major market share in 2021 owing to demand for advanced spend management solutions to manage business spends, including procurement, travel & expense, contracts, and spending.
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Increased Demand for Transparency and Visibility across Supply Chains in the Healthcare Industry to Fuel the Market Growth
By end-user, the market is classified into BFSI, travel & tourism, hospitality, healthcare, IT & telecom, energy & utility, retail & e-commerce, and others.
The BFSI segment is expected to hold major market share during the projected period. The adoption of spend management solutions is majorly found across banking and financial institutions. For instance,
The growing partnerships and adoption of spend management platforms across banks and financial institutions will drive the Business Spend Management software market growth.
Similarly, the healthcare sector is expected to create new opportunities for market growth owing to increased demand for supply chain risk management solutions during COVID-19 pandemic.
North America Business Spend Management (BSM) Software Market Size, 2021 (USD Billion)
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Geographically, the market is divided into five major regions, North America, South America, Europe, the Middle East & Africa, and Asia Pacific.
North America holds the major market share owing to the presence of prominent market players, including Coupa Software Inc., Ivalua Inc., Zycus, Jaggear, Xeeva, GEP, and others. Key market players in the region are focusing on partnerships, collaborations, mergers, and acquisitions, which is expected to fuel the demand for business spend management solutions and services across North America in the coming years.
The Canada market is expected to grow with remarkable CAGR owing to surge in investment by spend management vendors. For instance,
The Europe market is diverse, owing to rising investments by government and key players. Players in the market are focusing on expanding their geographical presence by offering customized services to clients across nations worldwide.
In Europe, the buying and implementation of BSM software was highly impacted during the pandemic period owing to supply chain disruptions and nationwide lockdowns. As per the Proactis Holdings Ltd., the number of new deals in 2020 decreased in the U.K., France, and Germany as compared to 2019. The pandemic also impacted the business process outsourcing and managed service auctions. Whereas, sales and new deals in the Netherlands increased by 13% in 2020 compared to 2019.
Post COVID-19 pandemic, the organizations have focused on investments and technology adoption to manage the travel and expense management, spend management, and contract management. For instance,
This factor indicates that the market is set to gain traction in the coming years across the region.
Asia Pacific is anticipated to showcase the highest growth rate during the projected period. The growing investment by developing economies for digital transformation, such as India, Japan, Singapore, South Korea, South East Asia, and others, is contributing to market growth. The market players are focusing on expansion of product offerings and business operations across India, Singapore, Australia, Japan, and South Korea. For instance,
Such active implementation of the software organizations by the organizations is projected to surge the demand for Business Spend Management software in this region.
Across the Middle East and Africa, the Business Spend Management (BSM) software is expected to gain traction in the coming years. Startups and SMEs across the region are focusing on funding and investments, which is projected to propel the demand for BSM software and services. For instance,
South America is projected to exhibit significant growth opportunities for business spend management solutions. An expansion of business operations across the South American countries, including Brazil, Argentina, and others drives the market growth. For instance,
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Similarly, the investment by high tech companies, such as Amazon.com Inc., Google LLC, IBM Corporation, and others, to establish cloud infrastructure is expected to fuel the market in the region.
Market Players to Drive Merger and Acquisition Strategies to Expand the Shares
Prominent players operating in the global market are focusing on expanding their presence and market share by the merger and acquisition strategy. These companies are aiming to acquire small and local firms to expand their business presence. For instance,
An Infographic Representation of Business Spend Management (BSM) Software Market
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The research report provides a detailed analysis of the market. It focuses on key aspects such as leading companies, software types, and leading applications of the software and services. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.
Value (USD billion)
By Component, Deployment, End-user, Enterprise Size, and Geography
By Enterprise Size
The market is projected to reach USD 39.05 billion by 2029.
In 2021, the market value stood at USD 17.07 billion.
The market is projected to grow at a CAGR of 11.1%.
The solutions segment is likely to lead the market.
Increased usage of spend analytics in businesses to propel the market growth.
SAP SE, Coupa Software Inc., Proactis Holdings Ltd., GEP, Basware, Jaggaer , Xeeva, Zycus Inc., Ivalua Inc., and Sutisoft Inc. are the top players in the global market.
North America is expected to hold the highest market share.
Asia Pacific is expected to exhibit the highest growth rate during the forecast period.
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