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Procurement Software Market Size, Share & COVID-19 Impact Analysis, By Deployment (Cloud, On-premise), By Enterprise Type (SMEs, Large Enterprises), By End-user (Retail & e-Commerce, Healthcare and Pharmaceutical, Manufacturing & Automotive, BFSI, IT & Telecom, Oil & Gas, Energy & Utilities, Others), and Regional Forecast, 2022-2029

Region : Global | Format: PDF | Report ID: FBI107099

 

KEY MARKET INSIGHTS

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The global procurement software market size was valued at USD 6.15 billion in 2021. The market is projected to grow from USD 6.67 billion in 2022 to USD 13.80 billion by 2029, exhibiting a CAGR of 10.9% during the forecast period. Based on our analysis, the global procurement software market exhibited an average growth of 6.2% in 2020 as compared to 2019.


In the market study, our analysts have included numerous data center automation solutions provided by the market players, such as Basware’s Purchase-to-Pay Solution, AP Automation, SAP SE’s SAP Ariba Buying and Invoicing Software, Oracle’s Cloud Self Service Procurement, Cloud Supplier Qualification Management, Cloud Sourcing, and Cloud Procurement Contracts. In addition, the study includes Zycus’s Procurement Software Suite, Procure-to-Pay Suite, and eProcurement Software, among others.


The global procurement software market growth can be credited to numerous aspects such as the growing implementation of the cloud, embracing digitization for saving on expenses, streamlining of the procurement process, and prevention of duplicated records and internet of things (IoT) devices across enterprises. Additionally, transparency to suppliers and improved efficiency by maintaining relationships with partners create ample market growth opportunities.


COVID-19 IMPACT


Emergence of COVID-19 Pandemic Increased Investment in the Development of Procurement Solutions


The COVID-19 pandemic had a positive impact on the global market due to rise in the number of end-users adopting neo and competitor bank solution tools during the outbreak of COVID-19. There has been an increase in the adoption of these services, including scheduling, checklist, development of standard protocols, report development, and implementation of recommendations, among others.


The increased efforts to expand the business across regions, upgrade the product offerings with AI and automation, and launch new products are expected to fuel the adoption of procurement solutions post-COVID-19 pandemic. For instance,



  • September 2021- McCarthy Holdings, the U.S.-based construction firm, partnered with GEP to deploy its smart procurement software. The company aims to transform its source-to-pay process with GEP procurement software.

  • December 2021 – Zycus opened an office in Japan as part of its business expansion strategy. The company’s expansion is driven by the increasing demand and expansion of Software as a Service (SaaS) in the country


Thus, such growing funding and spending are projected to create substantial market opportunities in the coming years.


LATEST TRENDS


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Surging Adoption of AI and Cloud-based Solutions to Act as a Key Trend


The rate of change in the procurement process of businesses has been astonishing as the implementation of technologies such as Artificial Intelligence (AI), cloud, Machine Learning (ML), Robotic Process Automation (RPA), and the Internet of Things (IoT) remains to rise in businesses.


With digitalization becoming the norm, Chief Procurement Officers (CPOs) have found it necessary to stay on top of the news regarding procurement software best practices. The future is filled with intelligent cloud-based procurement platforms, which will lead to a more vertically integrated analysis, better support for CPOs, and efficient sourcing strategies. These digital procurement technologies give CPOs access to previously unavailable metrics.


The emerging trends in procurement technology that increase businesses are next-gen analytics, artificial intelligence, digitization of supplier data, and the introduction of blockchain technology in procurement. Thus, the above-mentioned factors are projected to be a trend in the forecast period.


DRIVING FACTORS


Integration of Emerging Technologies such as Artificial Intelligence (AI) to Fuel Market Growth


The rise in the adoption of AI allows procurement organizations to solve complex problems more effectively or efficiently using computer algorithms. For instance,


As per the Deloitte, Chief Procurement Officers (CPOs) survey, it is reported that high-performing agility masters are ahead in adopting next-gen digital technologies in procurement. The key benefits of next-generation technologies in procurement reported by the CPOs were process efficiency (65%), process effectiveness (50%), and increased agility (50%).


Similarly, supply chains around the world are focusing on modernizing & streamlining processes to drive productivity & efficiency of business operations. This is estimated to increase the demand for digital procurement services. For instance,



  • November 2022- Strategy and management consultancy Kearney acquired a Germany-based software firm, Optano, to optimize its supply chain planning. Optano’s AI-driven software will enable businesses to optimize their supply chain processes, from production through planning and transport, and increase demand for optimization services and supply chain re-design.


RESTRAINING FACTORS


Lack of Skilled Professionals to Hinder Market Growth 


With innovations flooding the market, having employees skilled in maintaining and programming advanced technologies is essential. When addressing the skills shortage, understanding the importance of procurement value proposition, managing organizational expenditures, reducing cost, optimizing supply chains, and imposing proper procurement policies are always a continuous concern for the procurement team.


According to Ivalua, a global spend management cloud solutions prominent provider, the majority of U.K. organizations (86%) encountered considerable obstacles in building digital procurement skills. From this research, it is revealed that lack of training for technical and soft skills (28%), shortage of digitally experienced talent (31%), and lack of understanding of the skills required (13%) are some of the main challenges limiting the U.K. businesses from developing the digital skills they required. Moreover, over half (55%) of the businesses in the U.K. believe that digital skills in procurement are less innovative than in other departments.


Therefore, lack of skilled professionals restricts the procurement software market growth.


SEGMENTATION


By Deployment Analysis 


Cloud Deployment to Gain Traction Owing to Increased Efforts by Organizations to Shift Operations to Cloud


In terms of deployment, the market is classified into cloud and on-premise.


The cloud segment held the largest share in 2021 and is anticipated to grow with a remarkable CAGR during the forecast period. The cloud-based software offers greater transparency, better pricing, lesser time of transaction, and wider geographical reach; hence, it propels the technology as an essential safeguard and advancement with the growing technology. Additionally, continuous investment and product enhancements surge the demand for procurement solutions among enterprises.



  • January 2022- Microsoft survey stated that 86% of the US-based respondents stated that they are planning to increase their investment in multi-cloud and hybrid cloud.


As per IDC study conducted in September 2020, 35% of Canada-based organizations moved their applications to the cloud and 28% invested in cloud data management.


By Enterprise Type Analysis



  • SMEs to Grow with Maximum CAGR Owing to Rising Funding and Adoption of Cloud-based Solutions


Based on enterprise type, the market is divided into large enterprises and small & medium-sized enterprises. Large enterprises segment is expected to hold a major procurement software market share during the forecast period owing to the increasing demand for smart procurement management solutions to manage complex supply chains by reducing the complexity and providing transparent information for business growth.


Also, small and medium-sized enterprises are expected to grow with remarkable CAGR owing to growing investment and funding and adoption of cost-effective cloud solutions led by leading organizations. For instance,



  • September 2022- India-based procurement solutions and services company Procol raised USD 627.0 million in funding. The company aims to utilize funding to enhance solutions to resolve procurement challenges through Procol’s procurement software.


By End-user Analysis


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Increased Demand for Sourcing and Procurement Solutions to Witness Significant Market Growth in Healthcare & Pharmaceutical


Based on end-user, the market is divided into retail & e-commerce, healthcare and pharmaceutical, manufacturing & automotive, BFSI, IT & telecom, oil & gas, energy & utilities, and others. Among these, healthcare and pharmaceutical segment held a significant market share during the COVID-19 pandemic as it accelerated the demand for medical equipment, vaccines, medicines, and other pharmaceutical products, which increased the demand for fully compliant and transparent procurement processes across hospitals.



  • January 2021 - Intalere, a healthcare supply chain, partnered with Ivalua, Inc. to deploy Ivalua’s solution suite. The solution will assist in transforming and digitizing the procurement, contract lifecycle management, and sourcing processes.


Furthermore, the surge in the adoption of digital technology, cloud, and smart solutions to manage the global supply chain and government regulations across retail & e-commerce, manufacturing, and automotive industry drives the market growth.


REGIONAL INSIGHTS


North America Procurement Software Market Size, 2021 (USD Billion)

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Geographically, the market is divided into five major regions such as North America, South America, Europe, the Middle East & Africa, and Asia Pacific.


The North America market is studied across the U.S., Canada, and Mexico. The U.S. holds the major market share owing to the presence of key players in the region and the rising adoption of disruptive technologies across organizations.


Further, the Canada market is anticipated to increase with significant CAGR owing to a surge in investment by procurement software vendors. For instance, in April 2021, GEP partnered with ENMAX Corporation, a Canada-based electrical services provider, to implement GEP SMART, a cloud-based procurement software.


Europe is expected to hold a significant market share during the forecast period due to prominent companies in the market emphasizing business expansion by offering modified services to customers across countries.


Supply chain disruptions and nationwide lockdowns had an extensive impact on the sales of software and services for a short period of time. The demand for procurement solutions increased post-COVID-19 period in European countries. The enterprises invested in technology to manage the procurement and international import and export activities. For instance,



  • July 2021- SAP SE stated that enterprises in Europe are focusing on transforming their spend management, procurement, and supply chain management with digital technology.


These factors are anticipated to propel market growth across the region.


Asia Pacific is estimated to display dynamic growth during the projection period. The surging investment by emerging economies for digital transformation, such as India, Singapore, Japan, South Korea, South East Asia, and others, is contributing to market growth.


According to the IDC Report, the Asia Pacific’s ICT spending reached USD 924 billion in 2021 and is projected to reach USD 1 trillion by 2024. Thus, the increase in ICT spending will increase the demand for solutions and services across various industries. Further, in January 2022, IDC stated that professional services increased by 13.5% from 2021 to 2022, which is expected to fuel the growth of services.


The Middle East & Africa region is projected to showcase moderate growth in the coming years. Some of the major government-funded initiatives would create unprecedented opportunities for procurement and supply chain solutions in the near future.



  • February 2022 - As per the IDC, IT investments in the Middle East, Turkey, and Africa are projected to reach USD 229 billion in 2022, a rise of 2.7% as compared to 2021. The increased investment across the region is expected to fuel the demand for software across the region.


South America is projected to show steady growth during the forecast period. However, the COVID-19 pandemic has provoked decision-makers across Latin American countries to boost their IT spending in 2021.


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Around 39% of organizations in the region are planning to invest in cloud computing. The acceleration of cloud adoption in Brazil, Chile, and Argentina is drawing the attention of big companies and hyper-scale cloud providers to invest in procurement software. These factors are expected to drive the adoption of cloud-based software and services.


KEY INDUSTRY PLAYERS


Market Players to Initiate Merger and Acquisition Strategies to Extend their Shares


Important players functioning in the global market focus on expanding their global presence and market share through the acquisition and merger tactics. These companies aim to purchase small and local firms to broaden their business presence.


List of Key Companies Profiled:



  • Basware (Finland)

  • SAP SE (Germany)

  • Coupa Software Inc. (U.S.)

  • Oracle (U.S.)

  • Ivalua Inc. (U.S.)

  • JAGGAER (U.S.)

  • Workday, Inc. (U.S.)

  • GEP (U.S.)

  • Zycus Inc. (U.S.)

  • Infor (U.S.)


KEY INDUSTRY DEVELOPMENTS:



  • October 2022: Airtel has set up Oracle’s SCM cloud and fusion ERP solutions that will help them to face some of the challenges such as present integration, automation, and agility for the 5G era. Oracle cloud fusion solution will help Airtel to systematize manual processes and gain on-demand full view of its streamlined procurement and supply chain management and financial data.    

  • July 2022: Workday and consulting firm, McKinsey & Company formed an alliance to support clients that are facing human resources and finance challenges. The partnership will work to provide real-time data insights and recommendations for officials around the world. The collaboration between the two firms will include the deployment of Workday Strategic Sourcing, by building a dynamic negotiation analytics engine to evaluate procurement proposals.

  • February 2022: Coupa Software launched a collection of next-gen spend management solutions under the coupa’s Community.ai. Community.ai combines the data-driven artificial intelligence to improve person-to-person connections and transform B2B communities.

  • January 2022: SAP SE partnered with Icertis for better contract management to help companies to minimize risk, increase efficiency, and realize the full intent of their agreements. This partnership would help the customers to change the source-to-pay processes through the combination of Icertis Contract Intelligence with SAP Customer Experience and SAP Ariba solutions.

  • September 2020: Basware announced the addition of a procurement analytics SaaS software by Sievo to partner its ecosystem. Sievo’s procurement analytics solutions will provide Basware businesses with additional complementary services to Basware’s procure-to-pay suite.


REPORT COVERAGE


An Infographic Representation of Procurement Software Market

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The research report provides a detailed market analysis. It focuses on key aspects such as leading companies, software types, and leading software and services applications. 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.


REPORT SCOPE & SEGMENTATION






















































  ATTRIBUTE



  DETAILS



Study Period



2018-2029



Base Year



2021



Estimated Year



2022



Forecast Period



2022-2029



Historical Period



2018-2020



Unit



Value (USD Billion)



Segmentation



By Deployment, Enterprise Type, End-user, and Region



By Deployment




  • Cloud

  • On-premise



By Enterprise Type




  • SMEs

  • Large Enterprises



By End-user




  • Retail & e-Commerce

  • Healthcare and Pharmaceutical

  • Manufacturing & Automotive

  • BFSI

  • IT & Telecom

  • Oil & Gas, Energy & Utilities

  • Others



By Region




  • North America (Deployment, Enterprise Type, End-user, Country)


    • U.S. (By End-user)

    • Canada (By End-user)

    • Mexico (By End-user)


  • Europe (Deployment, Enterprise Type, End-user, Country)


    • U.K. (By End-user)

    • Germany (By End-user)

    • Italy (By End-user)

    • France (By End-user)

    • Russia (By End-user)

    • Spain (By End-user)

    • Benelux (By End-user)

    • Nordics (By End-user)

    • Rest of Europe


  • Asia Pacific (Deployment, Enterprise Type, End-user, Country)


    • China (By End-user)

    • Japan (By End-user)

    • India (By End-user)

    • South Korea (By End-user)

    • ASEAN (By End-user)

    • Oceania (By End-user)

    • Rest of Asia Pacific


  • Middle East & Africa (Deployment, Enterprise Type, End-user, Country)


    • Turkey (By End-user)

    • GCC (By End-user)

    • Israel (By End-user)

    • North Africa (By End-user)

    • South Africa (By End-user)

    • Rest of Middle East & Africa


  • South America (Deployment, Enterprise Type, End-user, Country)


    • Brazil (By End-user)

    • Argentina (By End-user)

    • Rest of South America




Frequently Asked Questions

The market is projected to reach USD 13.80 billion by 2029.

In 2021, the market value stood at USD 6.15 billion.

The market is projected to grow at a CAGR of 10.9%.

The healthcare and pharmaceutical segment is likely to lead the market.

The integration of emerging technologies such as AI drives the market growth.

Basware, SAP SE, Coupa Software Inc., Oracle, Ivalua Inc., JAGGAER, Workday, Inc., GEP, and Zycus 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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