The global strategic sourcing software market size was USD XX Mn in 2022 and is likely to reach USD XX Mn by 2031, expanding at a CAGR of 9.7% during 2023–2031. The market growth is propelled by the digital transformation of the sourcing and procurement processes in an industrial setup.
Strategic sourcing software is a set of applications in the form of software systems that help organizations streamline the process of procuring services and goods from suppliers. It comprises applications and tools for organizing market research, evaluating prospective suppliers, working out contact deals, and reviewing the operations of suppliers.
Sourcing strategy is an important aspect of supply chain management in a product-based and services-based business setup. Strategic sourcing helps industries to analyze business requirements and historical expenditures with the help of data analysis of various parameters involved in procurement procedures.
Strategic sourcing software solutions help businesses to review performance and improve the process on a regular basis to save costs and minimize operational hindrances. These software systems have enhanced features such as preparing and issuing purchase orders, tracking shipments, and administering bills and payments in the procurement processes.
Sourcing strategy software systems help businesses to streamline procurement and sourcing processes to optimize the cost of industrial operations and compliance with the laws and regulations in a business ecosystem. The tools integrated into the software help evaluate the performance of suppliers while ensuring that all the agreed-upon terms and conditions are met.
The market report finds that the COVID-19 pandemic has affected the strategic sourcing software market due to the economic slowdown and its associated effects on the manufacturing and logistics sector. The lockdown measures in the major economies led to factory closures and the temporary shutdown of the ports. The demand for sourcing strategy software systems declined due to these factors.
Strategic Sourcing Software Market Dynamics
Major Drivers
Growing demand for automation of sourcing systems to bring efficiency in procurement services is expected to drive the market. Strategic sourcing software systems help organizations streamline sourcing operations by choosing the right supplier and implementing suitable strategies to save costs and optimize operations in supply chain management operations. The manufacturers and logistics companies negotiate favorable costs and terms on the basis of the evaluation of the past performance of suppliers.
Rising e-commerce activities and consumer preference for online shopping are anticipated to drive the market. Consumers are preferring online shopping due to convenience and feasibility. The growing popularity of e-commerce platforms has increased the sales of products and services as it is convenient and saves time.
The rise in preference for e-shopping creates enormous pressure on manufacturers and suppliers in terms of maintaining the inventory and managing supply chain operations. Strategic sourcing software systems help manufacturers and suppliers to streamline sourcing and procurement operations productively.
Existing Restraints
The data privacy and security concerns due to the rising cybersecurity threats are likely to hinder the market. The hacking of the data systems disrupts the functioning of the software systems leading to monetary losses. The evolving and growing cyber threats are likely to create issues related to inventory management, supplier misinformation, and exploitation of systems for malicious gains.
Emerging Opportunities
The growing popularity of advanced digital technologies such as the Industrial Internet of Things(IIoT), cloud computing, and artificial intelligence (AI) is likely to create significant opportunities for the market. The data about suppliers across various domains are made available to manufacturers and suppliers through the Industrial Internet of Things (IIOT) and cloud computing.
The users can leverage this data to enhance operational efficiency and cost-effectivity of sourcing and procurement operations. The cost-effectivity and efficiency provided by cloud computing and artificial intelligence (AI) are a profitable proportion for consumers. A high-end computing solutions provider, Dell reports that organizations that invest in cloud, IIoT, and AI are witnessing 53% faster revenue growth compared to their counterparts.
Scope of the Strategic Sourcing Software Market Report
The market report includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
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Attributes
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Details
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Report Title
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Strategic Sourcing Software Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
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Base Year
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2022
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Historic Data
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2016–2021
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Forecast Period
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2023–2031
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Segmentation
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Type (Web based and Cloud based), Enterprise Size (Large Enterprise and Small & Medium Enterprise), and Application (Manufacturing, Retail, Healthcare, and Transportation & Logistics)
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Regional Scope
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Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
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Report Coverage
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Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, Market Trends, and Revenue Forecast
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Key Players Covered in the Report
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SAP SE; Scout RFP; Coupa Software Inc.; Procurify Technologies Inc.; Zycus Inc.; Oracle; Microsoft; JAGGAER; Infor; and Capgemini
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Strategic Sourcing Software Market Segment Insights
Type Segment Analysis
Based on type, the strategic sourcing software market is bifurcated into web based and cloud based. The cloud based segment is expected to expand at a significant growth rate during the projection period owing to the cost-efficiency and feasibility provided by the cloud based services. The cloud-based strategic sourcing software systems help improve business efficiencies and their implementation is easier and quicker in a business ecosystem.
According to a survey carried out in 2022, by the International Data Group, a leader in market intelligence, 69% of business establishments have adopted cloud technology in at least one of the industrial or service-based applications in their business ecosystems while 18% are planning to implement the cloud technology in the future.
Enterprise Size Segment Analysis
Based on the enterprise size, the global market is classified large enterprise and small & medium enterprise. The large enterprise segment is projected to register a considerable CAGR during the forecast period due to the requirement for efficient automation systems to streamline and organize sourcing and procurement operations efficiently.
Large enterprises often deal with operational hindrances related to sourcing as inventory size is bigger. Strategic sourcing software systems help manufacturers and suppliers to bring transparency and cost-efficiency into the sourcing and procurement operations.
Application Segment Analysis
Based on application, the strategic sourcing software market is segmented into manufacturing, retail, healthcare, and transportation & logistics. The manufacturing segment is expected to register a robust growth rate during the forecast period owing to operational complexities related to sourcing and procurement operations in manufacturing setup.
The manufacturing industries deal with sourcing and procurement-related issues at various organizational levels ranging from logistics to compliance. Strategic sourcing software systems help manufacturers to streamline sourcing operations to enhance business outcomes and value creation in the business ecosystem.
Regional Analysis
In terms of region, the global strategic sourcing software market is categorized as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the global market during the projection period due to the rising foreign direct investment from global multinational corporations (MNCs) in the region and the subsequent need for automation in the supply chain operations in the manufacturing setups.
Asia Pacific is known as a manufacturing hub of the world due to the availability of cheap labor and raw material. Strategic sourcing software systems help manufacturers and suppliers by optimizing costs and operations involved in the sourcing operations.
Segments
The strategic sourcing software market has been segmented on the basis of
Type
Enterprise Size
- Large Enterprise
- Small & Medium Enterprise
Application
- Manufacturing
- Retail
- Healthcare
- Transportation & Logistics
Region
- Asia Pacific
- North America
- Latin America
- Europe
- Middle East & Africa
Key Players
Competitive Landscape
Key players competing in the global strategic sourcing software market are SAP SE; Scout RFP; Coupa Software Inc.; Procurify Technologies Inc.; Zycus Inc.; Oracle; Microsoft; JAGGAER; Infor; and Capgemini
These companies in the strategic sourcing software domain adopted development strategies including the upgradation of product features, technological research, acquisitions, partnerships, innovative service offerings, collaboration, product launches, and production expansion to gain a competitive edge in the market. For instance,
- In December 2020, Infor, a software solutions provider announced that its UK-based channel partner TouchstoneEnergy has extended its service offerings to UK-based energy company, IOG by providing strategic sourcing solutions namely Infor SunSystems and Proactis P2P to improve procurement and strategic sourcing operations. The service offerings help IOG to enhance the visibility of expenditures in supply chain operations to optimize costs and operational hindrances.
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