Procurement Software Market Size, Share, Trends and Industry...

According to the report by Expert Market Research (EMR), the global procurement software market size achieved a value of USD 7.41 billion in 2024. With increasing digitalisation and the growing need for businesses to optimise their supply chain management, the market is expected to grow at a robust compound annual growth rate (CAGR) of 12.0% from 2025 to 2034, reaching a value of USD 20.53 billion by 2034.

Procurement software, designed to streamline the purchasing process for businesses, is becoming a critical tool in improving operational efficiency, reducing costs, and enhancing transparency. With capabilities that cover sourcing, supplier management, order management, and invoicing, procurement software has transformed the way organisations manage their procurement operations. The widespread adoption of this software has been propelled by its ability to automate manual processes, provide real-time data insights, and integrate seamlessly with other business systems, making it a vital component for modern businesses.

Key Drivers of Market Growth

The global procurement software market is being driven by several key factors that highlight its increasing importance in today’s business environment. One of the primary factors fueling this growth is the rising demand for automation in procurement processes. Manual procurement practices, which are often prone to inefficiencies and errors, are increasingly being replaced by automated solutions. Procurement software enables organisations to automate key procurement functions, including requisitioning, purchase order management, and invoicing, thus reducing human error, saving time, and improving efficiency.

Another significant driver is the growing need for organisations to manage and optimise their supply chains effectively. As businesses expand and operate in increasingly complex global environments, having a robust procurement solution to manage supplier relationships, negotiate contracts, and track performance has become essential. Procurement software helps businesses identify and engage the best suppliers, streamline communication, and monitor compliance with contracts, ensuring that procurement activities align with overall business strategies.

Additionally, procurement software provides businesses with greater visibility into their procurement data. With real-time data and analytics, companies can make more informed decisions about spending, identify cost-saving opportunities, and optimise procurement strategies. The ability to assess supplier performance and make data-driven decisions has led to a rise in the adoption of procurement software, particularly among organisations focused on driving cost savings and improving their bottom line.

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Technological Advancements and the Role of Artificial Intelligence

Advancements in technology, particularly artificial intelligence (AI) and machine learning (ML), are further accelerating the growth of the global procurement software market. The integration of AI-powered features into procurement software is revolutionising the way procurement decisions are made. AI-driven solutions can analyse vast amounts of data, identify trends, and provide recommendations that help procurement managers make more informed and efficient decisions.

AI can also help organisations improve supplier selection by analysing historical data to predict future performance and assess the risk of working with certain suppliers. This helps mitigate risks associated with supply chain disruptions, delays, or non-compliance, ensuring that companies can make better decisions when choosing suppliers. AI can also automate repetitive tasks, such as purchase order creation and invoice processing, freeing up procurement professionals to focus on more strategic activities.

Machine learning algorithms further enhance the effectiveness of procurement software by improving over time based on the data fed into the system. These algorithms can learn from past procurement activities and suggest optimised procurement strategies. The continuous evolution of procurement software powered by AI and ML will undoubtedly play a significant role in driving market growth over the coming years.

Cloud-Based Procurement Solutions

Cloud-based procurement software solutions are increasingly being adopted due to their flexibility, scalability, and cost-effectiveness. Traditional on-premise procurement solutions often require substantial upfront investments in infrastructure and ongoing maintenance costs. In contrast, cloud-based solutions offer businesses the ability to access their procurement systems from anywhere, using any device, as long as they have an internet connection. This has made cloud-based procurement software an attractive option for organisations of all sizes, from small businesses to large enterprises.

Moreover, the subscription-based pricing model of cloud-based software allows companies to pay for the services they use, making it more affordable and adaptable to changing business needs. The lower total cost of ownership (TCO) associated with cloud-based solutions is expected to drive their adoption even further, contributing to the growth of the global procurement software market.

The integration of cloud technology also enables seamless collaboration among procurement teams, suppliers, and other stakeholders. By centralising procurement data and providing easy access to real-time information, cloud-based solutions enable better communication and collaboration, ensuring that procurement activities are streamlined and efficient.

Procurement Software Market Segmentation

The market can be divided based on deployment, end use, and region.

Breakup by Deployment

On-Premise
Cloud

Breakup by End User

Retail
Manufacturing
Transportation and Logistics
Healthcare
Food and Beverage
Others

Market Breakup by Region

North America
Europe
Asia Pacific
Latin America
Middle East and Africa

Competitive Landscape

Some of the major players explored in the report by Expert Market Research are as follows:

Fraxion
GEP
Kissflow Procurement Cloud
Epicor Software Corporation
Jaggaer
Basware Inc.
SAP SE
Proactis Holdings Limited.
Procurify Technologies Inc.
Zycus Inc.
Ivalua Inc.
Microsoft Corporation
Others

Challenges and Opportunities

Despite the growth prospects, the procurement software market faces several challenges. One of the main challenges is the complexity of integrating procurement software with existing business systems, particularly in large enterprises. Procurement software needs to be compatible with various other systems, such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems, to ensure seamless data exchange and workflow management.

Data security concerns are another challenge, as procurement software handles sensitive financial and supplier information. Businesses must ensure that their procurement systems comply with data protection regulations and maintain robust security measures to protect against potential breaches or cyberattacks.

However, these challenges also present opportunities for growth. As businesses continue to invest in procurement software, there is a growing demand for solutions that offer seamless integration, user-friendly interfaces, and advanced security features. Providers that can address these needs will be well-positioned to capture market share and drive innovation in the procurement software space.