Procurement Analytics Market Size, Share & Trends Analysis Report By Component (Solution, Service), By Deployment, By Application, By Organization Size, By Vertical, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global procurement analytics system market size was valued at USD 2.88 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 23.6% from 2022 to 2030. The industry is benefiting from the requirement for operational efficiency as most businesses are moving toward efficiency. The sector is gaining new insights through robust data analytics in negotiations, performance management, vendor segmentation, and annual purchasing plan. The procurement department has a large amount of data, including transaction history, expenditure details, and other information. With the support of intelligent argumentation, using analytics in the data can lead to improved business decisions.

Automation is an influencing factor in the procurement analytics market. Another factor for the high demand is organizations' enormous need to manage contracts and compliance. For instance, ServiceNow, a U.S.-based software company, relaunched the procurement service management feature in its latest software which also aids in other field activity management. ServiceNow aims to automate procurement workflows in and around the procurement process.

Organizations now have access to more precise and real-time information, owing to the age of big data analytics. Teams are now better positioned to make more informed decisions about suppliers and spending and build more effective procurement strategies. Predictive analytics using big data provides insight into the history of demand. In addition to providing insight into consumer buying habits, shipping barriers, raw material availability, and supplier issues, this analysis also provides insight into unanticipated disruptions.

The onset of the COVID-19 pandemic led to the implementation of crisis management. Further, around 40% of procurement organizations lowered their cost reduction targets due to the pandemic. Procurement analytics companies and suppliers are collaborating to create joint innovation programs to explore new opportunities for revenue and profits. In addition, procurement analytics is growing because it can help companies minimize the impact of the pandemic on their economy and help other organizations perform their operations, encouraging companies to adopt them.

Component Insights

The solution segment dominated the market in 2021 with a revenue share of above 70%. Solution and services constitute the component section. Procurement analytics software offered by procurement analytics companies boosts growth and optimizes working capital management. There are various solutions available in the market. Few procurement analytics examples are Oracle and SAP which provide solutions such as risk analytics, spend analytics, and supply chain management.

Emerging technologies provide new opportunities for green technology and sustainable development, considering social, economic, and environmental factors. As a result, increasing awareness of technology's detrimental influence on the environment is a primary driver of procurement analytics solutions adoption across verticals worldwide, propelling the procurement analytics market forward. For instance, in October 2020, The Hong Kong and Shanghai Banking Corporation Limited is increasing its efforts to support businesses of all sizes to transition into more sustainable business models. Around USD 1 trillion has been committed to financing sustainable businesses and developing climate solutions to help protect the growth of future enterprises.

Deployment Insights

The on-premise segment held the largest revenue share of above 53% in 2021. On-premises solutions require an enterprise to purchase a license or a copy of the software. Organizations in highly regulated regions like Europe must use purchased software. Factors such as data protection due to data being stored on-premises and local security control influence the hold of the segment in the procurement analytics market. However, as on-premises software requires dedicated IT personnel, the support and accessibility improve within the organization.

The cloud segment is expected to grow at a significant CAGR during the forecast period. Cloud-based services are delivered directly over a network link that has been deployed in the cloud.  Cloud-based technologies are advantageous for businesses with limited resources for security initiatives.  Cloud-based procurement analytics systems are simple to maintain and upgrade; therefore, cloud deployment is becoming more popular.

Application Insights

The supply chain management segment held the largest revenue share of above 30% in 2021. The growth is driven by the rising adoption of the procurement process which aids in collecting, classifying, and analyzing spending data through dedicated software. Several companies use technology platforms to manage purchasing, contracts, and vendors. However, these systems are frequently fragmented and don't provide a complete view of spending across departments and locations, making spend analytics a valuable tool.

The risk analytics market is expected to grow rapidly by the end of 2030. Managing a vast amount of data and identifying possible dangers have become challenging as businesses have become more complicated. Business complexity has increased as a result of the increase in data, and decision-making has become more complex as a result. Due to the unexpected onset of the COVID-19 pandemic organizations have become alert and are adopting ways to mitigate the crisis. As a result, most businesses have begun to use procurement analytics tools to streamline data collection and processing.

Organization Size Insights

The large enterprise segment dominated the market in 2021 with a market share of around 76%. Small and medium enterprises incur expenses based on software purchases and subscription services. Therefore, these companies quickly adopt procurement analytics. In addition, it also helps reduce capital and operational cost, leading to an increase in investment. Thus, the adoption is expected to increase lucent opportunities for the market in the upcoming years.

Larger businesses use more strategy-enhancing procurement analytics tools. These tools carry out functions related to supplier management and contract development and capabilities like supplier self-service portals and catalog management that enable them to manage a significant number of vendors. Big data solutions are often chosen by procurement departments in large enterprises for processing and manipulating big data. With big data technologies, robust computing capabilities are used to analyze extensive sets of data-which are becoming more prevalent as more and more transactional information is recorded.

Vertical Insights

The telecom and IT segment dominated the market in 2021 with a market share of above 18%. However, the adoption of procurement analytics in the manufacturing segment is significantly high. Predictive asset maintenance using analytics systems is becoming more popular in manufacturing. Sensors gather and analyze IoT data to identify problem areas and improve machine efficiency. Therefore, losses result from sunk cost of manufacturing. Additionally, rising manufacturing processes in India, China, and South Korea are expected to influence the segment’s growth.  

The growing industry of retail and e-commerce is likely to adopt procurement analytics at a significant rate. Businesses use e-commerce analytics to analyze user behavior to determine site design and product landing pages that will most likely engage visitors and convert them into buyers. In June 2022, IIM Calcutta developed the Advanced Programme in Supply Chain Management (APSCM) to assist supply chain practitioners and professionals in associated jobs in designing supply chains that are optimized for cost, service, and resilience. The emphasis on supply chain analytics and logistics in this curriculum will help strengthen decision-making skills and increase overall business profitability.

Regional Insights

North America accounted for the largest revenue share of above 40% in 2021 and is expected to maintain its dominance over the forecast period. This can be attributed to the early adoption of technologies such as analytics and the digitalization of processes. The increase in expenditure on risk management and supply chain analytics, and vendor analytical solutions is likely to drive regional growth.

Additionally, major market players in the procurement analytics market from North America are continuously updating and innovating their product portfolio. In June 2022, PartsSource announced a visual formulary control and supply chain risk monitor to help clients improve equipment uptime and supply chain resilience.

Asia Pacific is expected to witness the highest CAGR in the forecast period. In the Asia Pacific region, big data analytics is transforming businesses and governments. Countries such as India and China are integrating technologies to improve operations and supply chain management. The increase in the adoption of IoT and data analysis of manufacturing processes is also driving the market growth.

According to an article published by Google Inc. in February 2022, the region accounted for more than 200 unicorn companies in 2021. The growing number of startups in the region is more likely to affect the growth of the procurement analytics industry.

Key Companies & Market Share Insights

The major competitors focus on innovations and updating product portfolios to gain a competitive advantage. For instance, in August 2021, Oracle Corporation launched the updated version of Cloud Procurement. Oracle Corporation is a critical player in the procurement analytics market. Oracle Fusion Cloud Enterprise Resource Planning and Oracle Fusion Cloud Supply Chain & Manufacturing are solutions to mitigate risks, reduce costs, and simplify the supply chain management process.

Companies invest in acquisition and backward integration to reduce costs and improve the efficacy of operations. For instance, in July 2021, Bain Capital, a private equity firm based in Boston acquired PartsSource. PartsSource is a B2B marketplace and a provider of healthcare services. In the U.S., PartsSource connects around 19,000 clinics and hospitals with over 6000 OEM manufacturers. Its precision procurement analytics solution assists hospitals in reducing waste, reducing risk, and increasing supply chain visibility. Some prominent players in the global procurement analytics market include:

• SAP

• Oracle

• SAS Institute

• Coupa Software

• Genpact

• Rosslyn Data Technologies

• Microsoft

• IBM

• Cisco

• GEP

Procurement Analytics Market Report Scope

Global Procurement Analytics Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global procurement analytics market report based on component, deployment, application, organization size, vertical, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2030)

  • Solution

  • Services

• Deployment Outlook (Revenue, USD Million, 2017 - 2030)

  • On-premise

  • Cloud

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Spend Analytics

  • Risk Analytics

  • Supply Chain Management

  • Vendor Analytics

  • Contract Management

  • Others

• Organization Size Outlook (Revenue, USD Million, 2017 - 2030)

  • Small and medium Enterprise

  • Large Enterprise

• Vertical Outlook (Revenue, USD Million, 2017 - 2030)

  • BFSI

  • Retail and e-commerce

  • Telecom and IT

  • Manufacturing

  • Healthcare and Life Sciences

  • Energy and Utilities

  • Government and Defense

  • Others

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Central and South America

    • Brazil

  • Middle East & Africa