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Source to Pay Market Size, Share & COVID-19 Impact Analysis, By Enterprise Type (Large Enterprises, and Small and Medium Enterprises (SMEs)), By End-user (BFSI, Consumer Goods and Retail, Healthcare and Life Sciences, Manufacturing, Automotive, IT and Telecommunication, Energy and Utilities, and Others), and Regional Forecast, 2023 – 2030

Last Updated: June 03, 2024 | Format: PDF | Report ID: FBI108583

 

KEY MARKET INSIGHTS

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The global source to pay market size was valued at USD 2.07 billion in 2022 and is projected to grow from USD 3.19 billion in 2023 to USD 70.72 billion by 2030, exhibiting a CAGR of 55.7% during the forecast period. North America dominated the global market with a share of 45.41% in 2022.


Source to pay software is a comprehensive solution organizations use to manage and optimize their procurement processes, from initial sourcing of suppliers to the final payment for goods and services. Additionally, this software addresses the challenges of manual and fragmented procurement processes, offering a unified and automated platform that enhances efficiency, cost control, compliance, and strategic decision-making across the organization’s procurement lifecycle. Furthermore, the source to pay software is used in industries including BFSI, consumer goods and retail, healthcare, life sciences, manufacturing, automotive, IT and telecommunication, energy and utilities, and others.


COVID-19 IMPACT


Increasing Need for Maintaining Effective Supplier Relationships Propelled Market Growth


The COVID-19 pandemic profoundly impacted the market, transforming businesses in navigating their procurement processes. The convergence of remote work dynamics and supply chain disruptions highlighted the need for source-to-pay (S2P) software to sustain procurement operations. Additionally, budget constraints and economic uncertainties shifted the focus toward cost savings and efficient spending, promoting organizations to leverage S2P software to optimize procurement expenses and maintain compliance. Moreover, maintaining effective supplier relationships became crucial, particularly when suppliers faced operational challenges. For instance,



  • Ernst & Young LLP (EY) conducted surveys in late 2020 where senior-level supply chain executives from retail, consumer products, industrial products, automotive, life sciences, and high-tech companies were involved. The surveys revealed that enterprises aim to enhance their supply chain strategies for increased resilience, sustainability, and stakeholder collaboration.


Thus, this software played a key role in communication and management, improving supplier relationships. As industries navigated varied demand patterns and economic uncertainties, the market evolved to accommodate new priorities and challenges in procurement.


LATEST TRENDS


Growing Focus on Supplier Collaboration and Relationship Management to Surge Source to Pay Market Growth


Organizations recognize that building robust and transparent partnerships with suppliers is vital for achieving effective procurement outcomes. Source to pay software solutions are evolving to provide advanced features that facilitate seamless communication, cooperation, and engagement between buyers and suppliers. This trend is spurred by various factors, including the need to enhance supply chain resilience during the COVID-19 pandemic. Businesses ensure timely deliveries, navigate disruptions, and sustain operational continuity by cultivating strong supplier relationships.  For instance,



  • According to industry experts, among 348 surveyed companies, 65% identified supplier relationship management as the most effective measure in mitigating the impact of COVID-19.


Additionally, supplier collaboration contributes to strategic sourcing initiatives by adopting joint product development, innovation, and co-creation efforts. The trend is further driven by the desire to mitigate risks, ensure regulatory compliance, foster sustainability and ethical practices, and create transparency in supply chain operations. Through integrated technology, communication tools, and e-procurement networks, S2P software enables organizations to strengthen supplier relationships, enhance collaboration, and elevate the overall efficacy of their procurement strategies. Hence, a growing emphasis on supplier collaboration and relationship management is expected to fuel the source to pay software market growth.


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SOURCE TO PAY MARKET GROWTH FACTORS


Rising Adoption of Digital Transformation Initiatives to Drive Market Growth


Organizations across industries recognize the benefits of streamlining their procurement processes, and source to pay software emerges as a strategic tool to achieve this goal. Digital transformation entails the integration of advanced technologies, automation, and data-driven decision-making into various aspects of the procurement lifecycle. S2P software aligns seamlessly with this trajectory by offering end-to-end automation, efficient data management, and real-time visibility into procurement activities. For instance,



  • In August 2023, findings from industry specialist highlights that 91% of businesses are involved in digital initiatives, with 87% of senior leaders prioritizing digitalization. Additionally, 89% of companies have embraced or are considering a digital-first strategy. This trend underscores the relevance of digital solutions such as S2P software in streamlining procurement processes and enhancing business operations.


Businesses are driven by the need to enhance operational efficiency, reduce manual interventions, ensure compliance, and gain actionable insights from procurement data. S2P software facilitates these objectives by digitalizing traditionally paper-based processes, automating approval workflows, providing spend analysis, and enabling seamless collaboration with suppliers. Hence, businesses' increasing adoption of digital transformation initiatives drives the source to pay market share.


RESTRAINING FACTORS


Complex Implementation and Cost Considerations to Hamper Market Growth


Source to pay software implementation can be complex and time-consuming. Integrating software with existing systems and processes requires significant planning, resources, and technical expertise, deterring some businesses from adopting it. While this software offers long-term benefits, the initial investment can be substantial, including software licenses, customization, training, and integration costs. Hence, smaller businesses with budget constraints might find the upfront expenses challenging, negatively affecting the source to pay market growth.


SEGMENTATION


By Enterprise Type Analysis


Large Enterprises to Dominate with the Support of Growing Service Demand


By enterprise type, the market is divided into large enterprises and small and medium enterprises (SMEs). Large enterprises are anticipated to lead market owing to their early adoption of technologies. Moreover, large enterprises use source to pay software to achieve greater efficiency, save costs, manage risks, enhance supplier relationships, and improve strategic decision-making, helping them to stay competitive and responsive in a dynamic business environment.


On the other hand, SMEs are estimated to witness steady growth rate in software adoption as few small businesses might not adopt this software due to budget constraints. However, the software empowers SMEs to streamline their procurement processes, make informed decisions, and optimize their operations for sustained growth. Furthermore, the segment’s growth can be credited to the rising SMEs in developing regions such as South America, the Middle East & Africa, and Asia Pacific.


By End-user Analysis


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Increase Artificial Intelligence (AI) Usage in Retail to Surge Goods and Retail Segment


By end-user the market is classified into BFSI, consumer goods and retail, healthcare and life sciences, manufacturing and automotive, IT and telecommunication, energy and utilities, and others. The consumer goods and retail industry holds the highest share as the software enables them to manage complex supply chains, optimize costs, ensure compliance, foster supplier relationships, and adapt to dynamic demand fluctuations, enhancing competitiveness in the fast-paced industry.


The healthcare and life sciences industry is expected to grow significantly due to the growing need for automating procurement processes and identifying cost-saving opportunities. Further, there is increasing demand for advanced analytics capabilities in healthcare for making data-driven decisions, monitoring supplier performance, and continuously improving procurement strategies.


REGIONAL INSIGHTS


As per our report, the market is studied across five regions including North America, Europe, Asia Pacific, and rest of the world which includes South America and Middle East and Africa.


North America Source to Pay Market Size, 2022 (USD Billion)

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North America holds the highest share of the source to pay market. The region has recently gained significant momentum due to technological advancements, economic strength, regulatory demands, supplier diversity, and a strong focus on optimizing procurement activities for cost savings and strategic advantage.


Asia Pacific is experiencing a swift growth and development due to its rapid economic growth, technological enhancement, diverse business landscape, and increasing focus on compliance. This contributes to its remarkable growth in the market. As businesses in the region recognize the value of optimizing procurement practices, the demand for software continues to surge across industries.


Europe is gaining prominence due to its commitment to digitization, compliance, sustainability, supplier collaboration, and operational efficiency. As businesses seek to optimize their procurement processes and navigate regulatory complexities, the demand for S2P software continues to rise across regional industries.


South America and the Middle East & Africa are anticipating steady growth as source to pay in these regions is evolving, with countries identifying the importance of implementing this software to gain profits and reduce risks.


KEY INDUSTRY PLAYERS


Prominent Companies Introduce Novel Products to Fortify Market Position


Major companies are focused on developing cutting-edge solutions to garner consumer demands. Moreover, key players enhance their product portfolio to deliver convenient solutions with distinctive aspects. Companies proactively pursue acquisitions, partnerships, and collaboration to strengthen their product offerings.


List of Key Companies Profiled in Source to Pay Market: 



  • GEP (U.S.)

  • IBM Corporation (U.S.)

  • Genpact (U.S.)

  • TATA Consultancy Services (India)

  • SAP SE (Germany)

  • Coupa Software Inc. (U.S.)

  • Ivalua Inc. (U.S.)

  • Zycus Inc. (U.S.)

  • Corcentric, Inc. (U.S.)

  • Basware (Finland)


KEY INDUSTRY DEVELOPMENTS:



  • April 2023: Delek revealed a partnership with Coupa and the Shelby Group to introduce an automated source-to-pay solution.

  • February 2023: Corcentric, Inc., a payments and procurement solutions provider for small and mid-market enterprises, launched its intelligent applications powered by artificial intelligence (AI). These applications automate finance and procurement processes across products such as source-to-pay, order-to-cash, payments, and managed services. By reducing manual tasks, minimizing errors, and enhancing efficiency, Corcentric aims to simplify critical business operations for leaders.

  • April 2022: Medius, an AP automation solutions provider, introduced Radius, an enhanced program for Independent Software Developers (ISDs). Medius’s product suite automates invoice handling, approval, and payment processes while simplifying vendor onboarding and management, risk reduction, and process enhancements, aligning with the core of source-to-pay software.

  • February 2022: Coupa introduced Commmunity.ai to enhance its business spend management solution. This addition enables users within the Coupa network to leverage the extensive data generated by over 2,000 global customers and more than USD 3 trillion total spent within the BSM community. This source-to-pay suite enhancement offers a direct avenue to utilize the valuable insights extracted from the daily data flow.

  • February 2022: Zycus, a provider of cognitive procurement, introduces Merlin for eProcurement featuring two AI-powered source-to-pay offerings: Buyer Smart Desk and Autonomous Quick Source.


REPORT COVERAGE


An Infographic Representation of Source to Pay Market

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The source to pay market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.


Report Scope & Segmentation










































ATTRIBUTE



DETAILS



Study Period



2019-2030



Base Year



2022



Estimated Year



2023



Forecast Period



2023-2030



Historical Period



2019-2021



Growth Rate



CAGR of 55.7% from 2023 to 2030



Unit



Value (USD Billion)



 


 


 


 


 


 


 


 


 


 


Segmentation



By Enterprise Type



  • Large Enterprises

  • Small and Medium Enterprises (SMEs)


By End-user



  • BFSI

  • Consumer Goods and Retail

  • Healthcare and Life Sciences

  • Manufacturing and Automotive

  • IT and Telecommunication

  • Energy and Utilities

  • Others


By Region



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

    • U.S.

    • Canada

    • Mexico



  • Europe (By Enterprise Type, By End-user, and By Country)

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

    • Russia

    • Benelux

    • Nordics

    • Rest of Europe



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

    • China

    • Japan

    • India

    • South Korea

    • ASEAN

    • Oceania

    • Rest of Asia Pacific



  • Rest of the World (By Enterprise Type, By End-user, and By Region)

    • Middle East & Africa

    • South America








Frequently Asked Questions

The market is projected to reach USD 70.72 billion by 2030.

In 2022, the market was valued at USD 2.07 billion.

The market is projected to grow at a CAGR of 55.7% during the forecast period.

The large enterprises is expected to lead the market.

Rising adoption of digital transformation initiatives to drive market growth.

GEP, IBM Corporation, Genpact, TATA Consultancy Services, SAP SE, Coupa Software Inc., Ivalua Inc., Zycus Inc., Corcentric, Inc., and Basware are the top players in the market.

North America is expected to hold the highest market share.

By end-user, the healthcare and life sciences industry is expected to grow with a remarkable CAGR during the forecast period.

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