How is the Procurement Software Market Poised for Growth: Trends and Opportunities Through 2034
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What key factors are powering the surge in the procurement software market right now?
The market size of procurement software has been expanding swiftly in the past few years. The market, which was valued at $8.65 billion in 2024 is projected to surge to $9.85 billion in 2025, representing a compound annual growth rate (CAGR) of 13.9%. The historic period saw significant growth due to enhanced precision of procurement data, mounting focus on sustainable procurement by consumers, an increase in the need for procurement automation, upsurged supply process, and a robust demand for e-procurement.
How fast Is the procurement software market expected to grow, and what’s its future value?
The procurement software market size is expected to see rapid growth in the next few years. It will grow to $16.38 billion in 2029 at a compound annual growth rate (CAGR) of 13.6%. The growth in the forecast period can be attributed to rising demand for supply chain management, rising need for automated and efficient procurement processes, rising demand for centralized procurement processes, increasing demand for smart procurement management solutions, and increasing use for cloud-based procurement solutions. Major trends in the forecast period include integration of artificial intelligence, technological advancements, integration of cutting-edge technologies, integration with new software, development of online portals, integration with other enterprise systems, and integration with existing systems.
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What are the leading drivers of growth in the procurement software market?
The growth of the procurement software market is anticipated to be fueled by the rising acceptance of cloud-based solutions. These are software and services maintained on distant servers and accessed through the internet, allowing users to access data and applications as needed from any location. The appeal of cloud-based solutions stems from their scalable and flexible nature, providing businesses with proficient and economical IT infrastructure solutions. These cloud-based solutions considerably enhance procurement software, delivering improved flexibility, scalability, and efficiency. They present benefits such as cost reductions, enhanced collaboration, superior security, and smooth integration capabilities, making them a desirable option for organizations aiming to refine their procurement processes. For example, the Eurostat, an intergovernmental organization based in Luxembourg, reported in December 2023 that the proportion of enterprises in the EU purchasing cloud computing services increased by 4.2 percentage points in 2023 compared to 2021. Consequently, the escalating acceptance of cloud-based solutions is propelling the procurement software market’s growth.
What are the key segments defining the procurement software market?
The procurement software market covered in this report is segmented –
1) By Software Type: Supplier Management, Contract Management, E-Procurement, E-Sourcing, Spend Analysis
2) By Deployment: On-Cloud, On-Premise
3) By Organization Size: Small And Medium Size Enterprises, Large Enterprises
4) By Vertical: Travel And Logistics, Information Technology And Telecommunications, Electronics, Automotive, Retail, Mining, Others Verticals
Subsegments:
1) By Supplier Management: Supplier Performance Management, Supplier Risk Management, Supplier Onboarding
2) By Contract Management: Contract Creation And Negotiation, Contract Lifecycle Management, Contract Compliance Management
3) By E-Procurement: Purchase Order Management, Supplier Catalog Management, Procurement Workflow Automation
4) By E-Sourcing: Reverse Auctions, Request for Proposal (RFP) Management, Supplier Discovery And Evaluation
5) By Spend Analysis: Spend Data Collection And Categorization, Spend Visibility And Reporting, Spend Optimization And Forecasting
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Who are the dominant players expanding their reach in the procurement software market?
Major companies operating in the procurement software market are Microsoft Corporation, International Business Machines Corporation, Oracle Corporation, SAP SE, Tata Consultancy Services Ltd., HCL Technologies Limited, Infor Inc, GEP Corporation, Epicor Software Corporation, Coupa Software Inc., Zycus Inc., Mercateo AG, Ivalua Inc., Basware Corporation, Jaggaer Inc, Proactis Holdings plc, Tropic Technologies Inc., Simfoni Limited, Enaviya Information Technology Pvt. Ltd, Determine Inc., Ginesys, SunSmart Technologies Pvt. Ltd., GT Nexus, Vroozi Inc.
How are evolving market trends shaping procurement software Strategies?
Leading firms in the procurement software market are concentrating on the creation of innovative solutions, such as spend management solutions, to solidify their standing in the market. Spend management solutions denote the tools and procedures used by companies to monitor, manage, and improve their expenditures. These solutions cover the complete span of a company’s spending process, from scheduling and budgeting to procurement and settlement. For example, in April 2023, Airbase Inc., an American software firm, launched a guided procurement solution to simplify the purchasing process. This innovative approach easily melds with existing workflows, presenting an easily navigable interface that guides users through each procurement phase, from request to the creation and approval of purchase orders. Primary features include automatic policy execution, which ensures adherence to company expenditure policies, and real-time budget transparency, enabling stakeholders to make knowledgeable decisions.
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What regions are contributing significantly to the growth of the procurement software market?
North America was the largest region in the procurement software market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the procurement software market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
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