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Procurement Software on the Rise: Market Set to Exceed $13 Billion by 2030

March 11, 2024
The procurement software sector is booming. Here’s why companies use the software and the key benefits that it provides.

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At its core, procurement software helps organizations work more efficiently, maintain control and get better visibility into the way their procurement teams acquire goods and services. Developed by companies like SAP Ariba, Coupa, Oracle, GEP and Jaggaer, these systems automate tasks, improve data analysis and support collaboration across teams. 

According to GEP, procurement software helps enterprises automate their entire source-to-pay cycle. From analyzing and managing spends to managing contracts and making invoice payments, users can gain complete access to control every procurement process operation.

“An organization can use a collection of capabilities provided by procurement software to facilitate the purchase of products and services,” the company says. “Procurement tools enable employees to practically request a purchase from anywhere worldwide, freeing up critical resources required elsewhere.”

Growing by Leaps and Bounds

Much like any type of automation right now, procurement software is gaining in popularity as organizations work to free up procurement professionals from some of the daily minutia and reallocate those hours to more strategic tasks. The procurement software market is growing rapidly and is now on track to reach $15.1 billion by 2030, up from $7.39 billion last year.

According to WhaTech, the North American region will dominate the market over the forecast period. In assessing the current market dynamics for procurement software, WhaTech says several key factors are driving its evolution and growth right now. Among them:

  • One significant driver is the escalating demand for digital solutions across industries, which is compelling organizations to adopt procurement software to streamline their purchasing processes and achieve operational efficiencies. 
  • There’s also been a pronounced focus on cost reduction and efficiency improvement, prompting companies to seek advanced procurement solutions capable of optimizing spending, enhancing supplier management and ensuring compliance. 
  • The shift toward cloud-based procurement software solutions is also gaining momentum due to these systems’ scalability, flexibility and cost-effectiveness. Another reason for the cloud’s popularity is that it enables real-time collaboration and data accessibility from anywhere. 
  • Finally, the integration of artificial intelligence (AI) and analytics into procurement systems is empowering organizations with predictive insights, automation capabilities and enhanced decision-making.

Regional Nuances for Procurement Software

In North America, WhaTech says the procurement software market is characterized by “a robust adoption of advanced procurement solutions driven by the presence of large enterprises and a strong focus on technological innovation.” The region benefits from a mature IT infrastructure and a high awareness of the benefits of procurement software in optimizing operations and achieving cost efficiencies, it adds. 

In Europe, stringent regulatory frameworks and a focus on sustainability are influencing procurement practices, leading to a growing demand for software solutions that can ensure compliance and support green procurement initiatives. Meanwhile, the Asia-Pacific region is experiencing rapid growth fueled by the expanding manufacturing sector, increasing investments in digital transformation and a burgeoning e-commerce landscape.  

“Overall, regional insights underscore the diverse factors shaping the procurement software market’s growth trajectory worldwide, highlighting the importance of tailored strategies to capitalize on unique regional dynamics,” the company adds. 

Measuring the Benefits

Once in place, procurement software helps companies automate a range of tasks that would otherwise be handled manually, on spreadsheets or via a mix of different third-party applications.

 GEP says the top benefits of letting procurement software handle these tasks include the reduction in the overall number of hours spent preparing purchase-related documentation. The software also helps companies reduce errors and focus on more important business priorities.

“Procurement [software] can also help with the procurement automation of many of the tasks involved in procurement, such as sourcing, requisitioning, purchasing, and invoice processing,” ProcureDesk adds. “Businesses can significantly cut down on labor costs associated with time-consuming administrative work by automating processes such as purchase requisitions and order processing.”

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About the Author

Bridget McCrea | Contributing Writer | Supply Chain Connect

Bridget McCrea is a freelance writer who covers business and technology for various publications.