Procurement Software Market Size, Share & Trends Report 2031

Report Description

Procurement Software Market Outlook 2031

The global procurement software market size was valued at nearly USD 6.73 Billion in 2022 and is anticipated to reach USD 15.9 Billion by 2031, expanding at a CAGR of 10.7% during the forecast period, 2023-2031. The growing need for streamlining procurement processes and integration of artificial intelligence services in work models of businesses is projected to fuel the market.

Artificial intelligence supports procurement software for delivering superior performances. It augments various aspects of the procurement process and allows companies to optimize resource allocation and gain deep insights into suppliers’ performance. Procurement processes are made effective through integration with platforms such as Microsoft Azure for responsiveness, performance improvements, maintenance support, and uptime.

• For instance, GEP uses OpenAI’s ChatGPT through Microsoft Azure OpenAI Service to enhance its procurement solutions. This integration provides an intuitive interface for clients to query data and automate processes.

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Procurement software is a system used in the procurement process, such as managing huge amounts of data, tracking spending, conducting e-procurement, navigating market conditions, and optimizing supplier relationships. It is widely utilized for seamless integration with back offices or systems.

Flexibility in scheduling, data security, scalability, and syncing operations on digital platforms are prominent features of procurement software. End-to-end procurement processes, including data exchange functionalities and managing suppliers, are streamlined and automated through this software. Moreover, rapid surge in the adoption of next generation digital technologies boosting the market.

• According to Deloitte’s Chief Procurement Officers (CPOs) survey, high-performing agility experts are at the forefront of adopting next-generation digital technologies in procurement.

The COVID-19 pandemic offered several potential opportunities for the procurement software market, due to the rising adoption of competitor and neo bank solution tools. Adoption of these services has increased during the pandemic for scheduling, checklists, report generation, and developing standard protocols, which fueled the market.

Procurement Software Market Dynamics

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Major Drivers

Growing requirement for automation in procurement procedures is expected to boost the demand for procurement software. It minimizes manual invention, reduces errors, and enhances operational efficiency. Procurement software assists in the maintenance of accuracy during purchasing.

It offers a tool for managing raw material prices throughout the production cycle and helps in generating the purchase order. Furthermore, the increasing penetration of digital logistics is likely to boost the demand for procurement software in existing work models of companies.

Rising adoption of artificial intelligence (AI) technology in existing work models is anticipated to boost the demand for AI-based procurement platforms. AI-powered procurement software has the ability to analyze supplier databases and current trends and historical data of the market, including sales.

• According to the PwC AI Business Survey held in 2022, about 96% of the 1,000 respondents are interested to use AI simulations, such as digital twins to provide detailed and real-time insights into current performance.

Existing Restraints

Lack of skilled professionals is expected to hamper the market. Specialized professionals are required to operate procurement software. Moreover, integration issues and insufficient functionality associated with the procurement software may decrease efficiency and increase costs, which are likely to restrain the market.

Emerging Opportunities

Rising adoption of mobile procurement technology is expected to create lucrative opportunities in the market. Mobile procurement technologies allow monitoring or handle procurement activities from remote locations. Furthermore, growing government policies to support digitization, due to the transparency in accounts is likely to propel the market.

Scope of Procurement Software Market Report

The report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Procurement Software Market Segment Insights

Software Type Segment Analysis

In terms of software type, the market is divided into spend analysis, e-procurement, contract management, e-sourcing, and supplier management. The spend analysis segment is expected to account for a key share of the market during the projected period, owing to the ability of software to identify purchase patterns.

Categorization of spending on the basis of repairs, maintenance, and operations is possible through the use of procurement software. It further enhanced data quality and is cost-effective compared to others, which is likely to drive the segment.

The contract management segment is anticipated to gain significant shares of the market in the coming years, as it improves audit execution, enhances contract visibility, minimizes risk, and manages product renewal time frames. Seamless collaborations between legal, sales, and other stakeholders across the contract management cycle are done through procurement software, which is likely to boost the segment.

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Deployment Segment Analysis

Based on deployment, the market is bifurcated into on-premise and cloud. The on-premise segment is projected to expand at a considerable CAGR during the forecast period, as it provides high security and greater data privacy. Complete control of data access is provided to organizations in the form of resource management and data protection.

On the other hand, the cloud segment is anticipated to hold a key share of the market, as it offers greater transparency and wider geographical reach compared to in-house servers and software. The cloud services reduced invoice errors and contract renewals and improved working capital.

Organization Size Segment Analysis

On the basis of organization size, the procurement software market is segmented into large enterprises and small & medium enterprises. The small & medium enterprises (SMEs) segment is expected to expand at a significant growth rate during the projection period, due to the growing requirement to enhance the internal procurement process.

Procurement procedures streamline and standardize the complete operation of the business. Rising demand for procure management software to manage complex supply chain is expected to propel the segment.

Vertical Segment Analysis

In terms of vertical, the market is segregated into retail, travel & logistics, electronics, mining, automotive, IT & telecommunications, and others. The retail segment is expected to dominate the market during the forecast period, owing to the rising demand for efficient inventory management and centralized procurement processes. Supply chain analytics, transparency, and the integration of business processes into automated systems are further expected to fuel the segment.

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Regional Analysis

In terms of region, the global procurement software market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is expected to dominate the market during the projection period, owing to the presence of large numbers of key players in the information and technology sector in the region.

Oracle, IBM Corporation, and Microsoft Corporation are some of the IT giants in the region. Growing demand for centralized processes for procurement and developments in infrastructure is anticipated to fuel the market in the region. 

The market in Asia Pacific is projected to grow at a rapid pace, owing to the increasing demand for procurement software in the healthcare and manufacturing sectors. The rising number of skilled procurement operation professionals in the region is expected to propel the market.

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