Vendor Risk Management Market Size, Share & Trends Analysis Report By Solution (Financial Control, Compliance Management), By Deployment, By Enterprise Size, By End Use, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global vendor risk management market size was valued at USD 7.27 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) of 15.0% from 2022 to 2030. Enterprises are extensively dependent on a large number of third-party vendors that are located in different geographic locations to achieve their business objectives. Collaborating with these vendors often seems challenging for enterprises as they may bring different risks, which can damage the business objectives and processes. Thus, to mitigate and overcome these risks, enterprises adopt vendor risk management in their business processes.

The market for vendor risk management is majorly driven by the increasing adoption of vendor risk management solutions to efficiently manage complex vendor ecosystems and the growing need among enterprises to reduce the risk associated with managing multiple vendors and enhancing production. Additionally, the growing demand for vendor risk management solutions in the highly regulated industries like manufacturing, healthcare, and banking & finance is expected to offer numerous opportunities for the stakeholders in the forecast period. However, the dependence of organizations on manual and conventional processes to manage risks is hindering market growth.

Amidst the COVID-19 pandemic, as global supply chains were disrupted due to stringent lockdowns and restrictions imposed by governments all over the world, organizations faced several difficulties in managing vendors. Reduced adoption of vendor risk management solutions was observed among industries like manufacturing, banking and finance, retail and consumer goods, and energy that were considerably affected by the crisis, however, these industries were in greater need of the solutions as the risk associated with vendors increased due to the crisis. A rapid increase in the adoption of the solutions was observed in the healthcare and life sciences and IT and telecommunication industries. Thus, the global market is estimated to be moderately affected by the pandemic.

Enterprises hire the best vendors from remote locations to optimize their product delivery, which leads to increased complexity in the supply chain. As a result, the increased risk of disruption is observed in many cases. To overcome this, enterprises are focusing on adopting advanced solutions that create vendor ecosystems in which supplier-supplier relationships emerge efficiently and management becomes easy. Thus, growth in the adoption of vendor risk management solutions is witnessed, which is driving the market. Managing functions of multiple vendors is a tedious activity for any organization through manual and non-formal processes. Thus, enterprises adopt vendor risk management solutions, which ease the enterprises’ task of evaluating the risks associated with different vendors.

Vendor risk management solution also supports the identification of critical issues associated with products and solutions and reduces the organization’s time and efforts in evaluating vendor’s performance based on time accuracy, product and solution delivery, and quality of the product. Thus, with effective vendor risk management, organizations are experiencing enhancement in their production rate, which is thereby contributing to the market growth. Several organizations across the world considerably rely on traditional manual processes to evaluate the risks associated with vendor dependency. These enterprises are unaware of the significance of vendor risk management solutions in reducing vendor risks. Thus, their reluctance in implementing these solutions is hindering market growth.

Solution Insights

The financial control segment accounted for the largest revenue share of over 20.0% in 2021. The large share of this segment is attributed to enterprises' growing interest in managing financial risks associated with vendor management. Due to the COVID-19 crisis, financial control became the utmost important issue concerning vendor management for several companies in the world. In addition, the growing need to maintain a track of financial transactions in a severely complex environment consisting of several vendors is observed as a trending factor contributing to the segment growth. In addition, organizations are keen on making data-driven decisions related to the financial aspect of the system, and this factor is also anticipated to drive the segment.

The compliance management segment accounted for the second-largest revenue share in 2021 owing to an increase in the adoption of compliance management tools for managing control failures and regulatory breaches. Moreover, growing demand for regulatory compliance solutions to understand emerging risks, constantly changing regulations, and escalating costs are anticipated to drive the segment. In addition, rising complexity in the vendor management system due to the growth in the number of vendors allows organizations to focus on appropriate compliance management. Thus, demand for compliance management solutions is expected to grow considerably over the forecast period.

Deployment Insights

The cloud-based deployment segment accounted for the largest revenue share of over 85.0% in 2021. The large share of this segment is mainly attributed to the growing advantages it offers to the enterprises in terms of scalability, self-solution, low maintenance, and elasticity at affordable prices. Furthermore, increasing deployment of hybrid cloud solutions that help enterprises enhance business operations, cost optimization, resource usage, user experience, and application modernization is expected to drive the market at a significant rate in the forecast period. Furthermore, the rising interest of organizations in modernizing their existing IT infrastructure with the help of the implementation of cloud-based systems is anticipated to drive the market over the forecast period.

The on-premise segment accounted for the second-largest revenue share in 2021 due to the increasing data security concerns, allowing enterprises to adopt on-premise solutions. Moreover, cost restraints and lack of awareness regarding the benefits of cloud-based deployment engage enterprises to deploy on-premise solutions. Several organizations from emerging countries lack sufficient technical expertise among their employees to operate with cloud-based platforms. This factor has also fueled the segment growth.

Enterprise Size Insights

The large enterprises segment accounted for the largest revenue share of over 50.0% in 2021. The large share of this segment is primarily attributed to the improved collaboration, flexibility, lower operating expenses, and a faster time to market. Furthermore, the growing need among large organizations to manage dispersed supply chains and vendors across the world is fueling the segment growth. In addition, growth in spending capacity in technological innovations by large enterprises has been one of the key factors driving the segment. In addition, large enterprises with substantially big supply chains involve multiple vendors that need to manage effectively. As a result, the demand for vendor risk management solutions is high in this segment.

The Small & Medium Enterprises (SMEs) segment is expected to emerge as the fastest-growing segment over the forecast period. The growing number of start-ups and SMEs in emerging markets such as China, India, and Latin America and their interests in advanced technology are anticipated to drive the segment. Increasing support provided by the government for the development of the SME sector in various countries is also expected to drive the segment in the forecast period. Moreover, the growing inclination of SMEs toward cost-effective cloud-based solutions is further anticipated to propel market growth in the coming years.

End-use Insights

The manufacturing segment accounted for the largest revenue share of over 20.0% in 2021. The large share of this segment is primarily attributed to the growing demand for vendor risk management solutions to efficiently manage the increased risks associated with vendors in terms of finance, compliance, and quality. In addition, increasing digital transformation in the industry enables organizations to adopt advanced solutions, including vendor risk management, to streamline business operations and reduce risks. Moreover, organizations in the manufacturing industry have multiple vendors for numerous products and services as compared to other industries. Thus, to effectively manage risk associated with numerous vendors, the demand for vendor risk management solutions is high in this industry, thereby fueling the growth of the segment.

The retail and consumer goods segment accounted for the second-largest share in 2021 owing to the increased need to streamline supply chain disruptions and the growing number of vendors providing different products and solutions from remote locations. Moreover, the growing interest of retailers in offering optimized consumer experience by adopting modern means and advanced solutions is anticipated to fuel the segment growth at a considerable adoption rate in the forecast period. In addition, retailers are increasingly focusing on making data-driven decisions for optimizing their operations and providing a better customer experience. Thus, managing risks associated with vendors also requires an effective smart software solution that could help retailers in making appropriate decisions. As a result, the retail segment is expected to grow significantly over the forecast period.

Regional Insights

North America dominated the global market with a share of over 55.0% in 2021. The large share of this segment is primarily attributed to the growing dependence of enterprises on vendor risk management solutions to effectively manage risks associated with vendors, the presence of global market leaders offering several solutions at affordable prices, and the increasing spending capacity of the local enterprises on risk management solutions.

Asia Pacific is anticipated to emerge as the fastest-growing region over the forecast period. The rapid rise in the disposable incomes of consumers and the growing number of SMEs in China, India, South Korea, and Japan are anticipated to drive the market. Moreover, the growing need for digital transformation among several companies in the remote places of the region and increasing awareness among the enterprises regarding the benefits of vendor risk management is expected to drive the market in the forecast period.  

 Key Companies & Market Share Insights

New product launches and product upgrades are anticipated to be the most effective ways for industry players to gain quick access to emerging markets and enhance technological capabilities. For instance, in October 2021, Origami Risk announced that it had developed an online solution to help businesses streamline their vendor risk management process and enhance productivity. Moreover, in November 2020, Prevalent, Inc. introduced Vendor Intelligence Network and Third-Party Risk Management Platform that empowers enterprises with real-time vendor risk visibility by transforming static vendor profiles into dynamic vendor risk intelligence.

Furthermore, partnerships, collaborations, and strategic alliances are expected to pave the way for the growth of companies in the market.  For instance, in November 2020, SecZetta, one of the solution providers, collaborated with Prevalent, Inc. to integrate vendor risk intelligence insights from Prevalent’s platform into SecZetta Third Party Identity Risk Solution to enhance product capabilities and as a part of their digital transformation initiative. Some prominent players in the global vendor risk management market include:

• BitSight Technologies

• Genpact

• LockPath

• MetricStream

• Optive Security, Inc.

• Rapid Ratings International, Inc.

• Resolver, Inc.

• RSA Security LLC

• SAI Global

• Quantivate, LLC

Vendor Risk Management Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends and opportunities in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global vendor risk management market report based on solution, deployment, enterprise size, end use, and region:

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

  • Vendor Information Management

  • Contract Management

  • Financial Control

  • Compliance Management

  • Audit Management

  • Quality Assurance Management

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

  • Cloud

  • On-premises

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

  • Large Enterprises

  • Small & Medium Enterprises

• End-use Outlook (Revenue, USD Million, 2017 - 2030)

  • BFSI

  • IT & Telecom

  • Retail & Consumer Goods

  • Manufacturing

  • Energy & Utilities

  • Healthcare

  • Government

  • Others

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

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • MEA