Growth in the Procurement Software Market

Supply chain management software is a major sector expected to grow further. However, procurement management software in particular is being observed to grow at a faster rate. Remko van Hoek, Professor of Supply Chain Management at the Sam M. Walton College of Business at the University of Arkansas, said at the Digital Procurement World (DPW) conference held in Amsterdam, "Vendors are growing and evolving rapidly. Capital is flowing to providers. Heavy investment is being made in procurement. This is very exciting for procurement professionals because these companies are helping them solve their problems."

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At one of the two supplier halls at DPW at Beurs van Berlage in Amsterdam, this structure rising with Gothic architecture from the 19th century exemplified van Hoek's words. According to a report published by SkyQuest Technology Consulting in November, the supply chain management software market was valued at $18.76 billion as of 2023, and is projected to reach $20.07 billion by 2031. However, the procurement management software segment is currently valued at $5.01 billion and is expected to grow to $9.8 billion by 2031 according to TrendSpotter Analytic; this represents growth at nearly three times the rate of the overall supply chain management software market.

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The trend of procurement moving beyond its "just a cost center" role within supply chain management to secure a seat at the C-suite was supported by conference participants and speakers. This requires not only good technology tools, but also confidence in how to use them. Van Hoek said, "More leaders are becoming willing to share their lessons on choosing, adopting, and implementing this technology," citing how large firms like Walmart have adopted procurement management software. In his article "How Walmart Automated Supplier Negotiations" published in Harvard Business Review in November 2022, van Hoek noted that companies such as Walmart, Maersk, and Google are pioneers in this area.

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A recurring theme at the 2024 DPW conference was that a better, more transparent, and more efficient procurement function can contribute to a better world in many ways, such as reversing environmental decline, income inequality, food insecurity, and inadequate access to healthcare. However, adoption remains an issue. Van Hoek asked, "If we can all use this or procure it at a relatively low cost, why aren't we all using it?" He cited distrust of the digital transformation roadmaps created by many companies and low confidence in their ability to change. "We know where we're going, but we don't know how to get there," van Hoek said, emphasizing the importance of companies turning to leaders in the field. Additionally, a shortage of talent among procurement professionals emerged as another challenge. Van Hoek said, "There aren't people with the skills to bring this strategic opportunity to life," emphasizing efforts to develop future leaders. Van Hoek, who has held various senior procurement positions at The Walt Disney Company, stressed the importance of explaining to students what procurement means for business and society.

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Van Hoek said, "Of course, we still have a long way to go," noting that "we've only scratched the surface of what procurement can do."

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Key Takeaways:

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• The supply chain management software market is projected at $18.76 billion in 2023 and $20.07 billion in 2031.

• Procurement management software is valued at $5.01 billion in 2023 and will be worth $9.8 billion in 2031.

• The procurement software market has a growth rate of nearly three times that of the overall supply chain management software market.

• The DPW 2024 conference emphasized procurement securing a seat at the C-suite table.

• Large firms such as Walmart, Maersk, and Google have successfully adopted procurement management software.

• Distrust of digital transformation roadmaps and talent shortages among procurement professionals are among the key challenges.

• Remko van Hoek is focused on developing future leaders in the procurement field.

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News Link: https://www.supplychainbrain.com/articles/40702-procurement-software-market-growth-brings-exciting-times-for-cpos

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