Procurement Software Market Size, Share, Growth and Industry Outlook | 2034

Procurement Software Market Outlook

According to the report by Expert Market Research (EMR), the global procurement software market size attained a value of USD 7.41 billion in 2024. Supported by the growing need for efficiency in procurement processes, increased adoption of cloud-based solutions, and advancements in artificial intelligence (AI) and automation technologies, the market is projected to further expand at a compound annual growth rate (CAGR) of 12.0% between 2025 and 2034, reaching a value of USD 20.53 billion by 2034.

Procurement software refers to a set of tools and systems designed to automate and streamline the procurement process, from requisitioning and purchasing to invoicing and payment. By improving transparency, reducing manual effort, enhancing supplier management, and promoting cost savings, procurement software has become a vital component in organizations across industries. As businesses face increasing pressure to cut costs, improve supplier relationships, and comply with evolving regulations, procurement software has proven essential for driving efficiency and reducing operational risks.

The adoption of procurement software is becoming widespread due to the increasing complexity of supply chains, rising procurement volumes, and the demand for real-time data analytics to support informed decision-making. Moreover, the integration of procurement software with other enterprise resource planning (ERP) systems has further accelerated its acceptance across various sectors. As the global business environment continues to evolve and companies seek to improve their procurement functions, the demand for procurement software is expected to experience robust growth in the coming years.

Market Drivers

Several key factors are driving the growth of the global procurement software market. A primary driver is the growing need for cost savings and operational efficiency. In an increasingly competitive global marketplace, businesses are under pressure to streamline their procurement processes and reduce expenses. Procurement software helps organizations achieve these goals by automating routine tasks, optimizing supplier selection, and improving contract management. By centralizing procurement data and processes, procurement software allows businesses to better monitor expenditures and identify areas for cost reduction.

Another significant factor contributing to the growth of the procurement software market is the increasing complexity of global supply chains. With businesses expanding their reach across borders and engaging with a larger number of suppliers, procurement management has become more complicated. Procurement software provides the tools necessary to navigate this complexity, offering features such as supplier collaboration, real-time tracking, and analytics, which help organizations manage their supply chains more effectively. The need to enhance transparency and manage supplier risk has further fueled the demand for procurement software.

The rise in cloud adoption is also playing a critical role in the procurement software market. Cloud-based procurement solutions offer scalability, flexibility, and cost-effectiveness, making them attractive to businesses of all sizes. These solutions provide companies with the ability to access procurement systems and data remotely, facilitate easier collaboration with suppliers, and reduce the need for expensive IT infrastructure. The increasing shift towards cloud-based procurement software, driven by its advantages over on-premises solutions, is expected to significantly contribute to market growth.

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Key Trends and Innovations

The global procurement software market is undergoing significant transformation, driven by technological advancements and changing business needs. Below are some of the key trends and innovations shaping the future of the procurement software market:

• Artificial Intelligence and Machine Learning Integration: The integration of artificial intelligence (AI) and machine learning (ML) into procurement software is one of the most significant developments in the market. AI and ML are being used to enhance decision-making, optimize supplier selection, predict demand patterns, and identify cost-saving opportunities. These technologies enable procurement professionals to make data-driven decisions and improve procurement outcomes. The use of AI-powered chatbots for supplier inquiries, contract negotiations, and automated tasks is also gaining momentum, reducing manual effort and improving operational efficiency.
• Supplier Collaboration and Management: Procurement software is evolving to facilitate better collaboration between buyers and suppliers. By offering features such as supplier portals, real-time communication, and performance tracking, procurement software helps improve supplier relationships and drive greater transparency in the supply chain. The ability to assess supplier performance, track deliveries, and monitor compliance through integrated systems is increasingly becoming a key differentiator for procurement software providers.
• Blockchain Technology: The use of blockchain technology is emerging as a key trend in procurement software. Blockchain offers an immutable, transparent, and secure way to track procurement transactions, ensuring that all parties involved in the procurement process can verify the authenticity and integrity of transactions. This can help mitigate risks such as fraud, counterfeiting, and supply chain disruptions. Blockchain can also streamline processes such as contract management and payment processing, further enhancing the efficiency of procurement operations.
• Mobile Procurement Solutions: The increasing adoption of mobile technology is influencing the procurement software market, with mobile procurement solutions gaining popularity among businesses. Mobile apps allow procurement professionals to access procurement systems on-the-go, approve purchase orders, track deliveries, and communicate with suppliers. Mobile procurement solutions provide enhanced flexibility and improve productivity by enabling procurement activities to take place from anywhere at any time.
• Focus on Sustainability: With the growing emphasis on sustainability and corporate social responsibility (CSR), procurement software is being enhanced to help organizations track and measure the environmental and social impact of their procurement decisions. Features such as sustainability reporting, supplier sustainability assessments, and carbon footprint tracking are becoming increasingly important in procurement software offerings. Companies are focusing on sourcing from environmentally responsible suppliers and ensuring compliance with sustainability regulations, which is driving the demand for procurement solutions that align with these goals.

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 strong growth prospects, the procurement software market faces several challenges. One of the main challenges is the resistance to change among organizations that have traditionally relied on manual or legacy procurement systems. The implementation of procurement software requires significant investment in terms of time, money, and resources, and some businesses may be hesitant to make the transition, particularly small and medium-sized enterprises (SMEs).

Additionally, data security and privacy concerns are significant challenges for organizations adopting procurement software, especially cloud-based solutions. Procurement data is highly sensitive, and businesses must ensure that their software providers comply with data protection regulations and offer robust security features to protect against data breaches and cyber threats.

However, these challenges also present opportunities. As more businesses recognize the benefits of procurement software, particularly in terms of cost savings, efficiency, and supplier management, the market for procurement solutions is expected to continue to expand. The growing demand for AI-powered procurement tools, mobile solutions, and blockchain technology offers significant opportunities for innovation and market differentiation.