Procurement Data Connectivity Market Size (2024 – 2030)

The Procurement Data Connectivity market reached a valuation of USD 3.26 billion in 2023 and is poised to attain USD 15.80 billion by 2030. A steady growth trajectory, with a CAGR of 25.3% during the forecast span of 2024 – 2030, is anticipated for the market. Several factors are expected to fuel the growth of the procurement data connectivity technologies and services market, including increased expenditure on marketing and advertising by businesses, a dynamic landscape of consumer insights, and the expansion of customer channels.

Industry Overview

Employing quantitative methodologies to derive meaningful insights and outcomes from data is known as procurement analytics, a prevalent practice in modern industries. This involves the systematic collection and analysis of data to facilitate fact-based decision-making processes. Procurement data connectivity stands as a strategic approach to extract pertinent information and conclusions from data, thereby enabling firms to enhance decision-making and expand their operations. Typically, it involves the analysis and projection of future trends based on data from previous periods. These strategies aid businesses in reducing operational costs, achieving savings, and mitigating risks.

The heightened focus on enhancing the operational efficiency of procurement channels has directly impacted the growth of the procurement data connectivity market over the projected timeline. The rising demand for procurement analytics is driven by the increasing necessity to manage compliance policies and contracts, as well as by businesses' endeavors to maintain their competitiveness in the market. Rapid technological advancements, such as the Internet of Things (IoT) and cognitive computing, are further propelling market growth. Additionally, the escalating need for highly efficient procurement solutions to enhance operational effectiveness is driving the procurement data connectivity market forward. Moreover, the increasing demand for cloud-based procurement solutions and the rising preference for data-driven solutions are bolstering the market's upward trajectory. Likewise, the integration of machine learning and artificial intelligence into the procurement process, coupled with the surging demand for cloud-based analytical solutions, presents numerous new opportunities for the development of the procurement analytics market throughout the projected period. Nevertheless, concerns regarding data protection among organizations, as well as various challenges in process optimization and apprehensions about data privacy, could potentially impede the growth of the procurement data connectivity market during the forecast period.

COVID-19 Impact on Procurement Data Connectivity Market

The onset of the COVID-19 pandemic has positively influenced the advancement of the procurement data connectivity market. With the advent of the coronavirus, numerous end-user sectors, including small and medium-sized enterprises (SMEs) and major corporations, found themselves compelled to largely halt operations. This circumstance prompted end-users to adopt innovative technologies such as e-procurement to continue business operations uninterrupted even amid the pandemic. Such factors are expected to propel market expansion during the forecast period.

Market Drivers

A pivotal factor driving the growth of the procurement data connectivity market is the expansion of e-commerce and the organized retail sector.

The procurement of goods and resources constitutes a significant aspect of the retail market. Through the amalgamation of data, contract management, and supplier management, procurement data connectivity aids companies in mitigating risks associated with their supply base. Consequently, the demand for procurement analytics is anticipated to surge. Consumers increasingly favor online purchases over traditional brick-and-mortar shopping. The proliferation of technologies such as smartphones and multichannel commerce has fueled the growth of the global e-commerce industry. E-commerce businesses utilize procurement analytics and data connectivity to source products from vendors, thereby enhancing supplier management. Consequently, the demand for procurement data connectivity is expected to rise in tandem with the expansion of the e-commerce sector.

Another factor bolstering the growth of the procurement data connectivity market share is the escalating demand for e-procurement.

E-procurement (electronic procurement) entails the buying and selling of goods or services through digital networks, primarily over the Internet. It serves as a modernized alternative to conventional procurement processes. Businesses favor e-procurement systems as they reduce extraneous costs such as intermediary fees and discrepancies in the procurement process. End-users can utilize e-procurement platforms to register as suppliers or buyers, submit requisite documents online, and participate in bidding processes. Consequently, a substantial volume of data is generated. Predictive analytics leverages this data to make forecasts, enabling businesses to make well-informed decisions. The increased adoption of e-procurement is expected to fuel the demand for procurement data connectivity services during the forecast period.

Market Restraints

Enhancing data consistency poses a significant challenge for the procurement data connectivity market during the forecast period.

Procurement companies generate vast amounts of data related to suppliers and raw materials, often dispersed across multiple systems, processes, and geographical locations. Data stored in diverse systems may exist in varying formats, making access challenging. Integrating data from disparate sources can pose difficulties, impacting the quality of procurement analysis. Consequently, data inconsistency may adversely affect the quality of procurement analysis, thereby influencing business decisions and productivity. Furthermore, businesses may possess numerous duplicates of the same data, affecting storage and processing efficiency. Neglecting these issues may lead to distorted conclusions. Therefore, concerns related to data integrity and consistency have the potential to impede market expansion.

Security and privacy issues associated with the utilization of connected devices serve as a hindrance to market growth.

The increased adoption of digital technologies raises concerns regarding security and privacy. The heightened risk of unauthorized access to system data by hackers, as well as the potential for misuse of connected devices for malicious activities such as thefts and planned crimes, presents challenges. Organizations hold confidential data, and the alarming surge in cyber-attacks, data breaches, and false data injections across various industry verticals poses a hindrance to adoption. However, substantial investments in cybersecurity are poised to mitigate this challenge and foster healthy growth in the later stages of the forecast period (2024 - 2030).

PROCUREMENT DATA CONNECTIVITY MARKET- BY ORGANISATION SIZE

• Small and Medium Enterprises (SMEs)
• Large Corporations

The procurement data connectivity market is categorized into Small and Medium Enterprises (SMEs) and large corporations based on organization size. As of 2021, large corporations held the predominant market share, exceeding 75.00 percent. This dominance is attributed to the continued investment by large businesses in these services, particularly for managing intricate procurement contracts and securing agreements. The appeal of these services lies in their ability to reduce operational costs and simplify business complexities, making them highly sought-after among large enterprises.

Over the forecast period, the Small and Medium Enterprises (SMEs) segment is anticipated to witness substantial growth. SMEs are increasingly shifting their focus from overall operations management to specific business process management to facilitate prompt and informed decision-making. Consequently, the global market is witnessing a surge in demand for procurement data connectivity services from SMEs, driven by the need to enhance internal procurement processes for efficiency and standardization, thus propelling market expansion.

PROCUREMENT DATA CONNECTIVITY MARKET- BY DEPLOYMENT TYPE

• Cloud-based Deployment
• On-Premise Deployment

The procurement data connectivity market is segmented into Cloud-based Deployment and On-Premise Deployment based on the type of deployment. Cloud deployment is expected to register the highest Compound Annual Growth Rate (CAGR) during the forecast period. Cloud-based network connections facilitate the delivery of cloud-based services, making them an attractive option for businesses with constrained security budgets. The simplicity in maintenance and upgradation of cloud-based procurement analytics systems is driving the increasing popularity of cloud deployment. The ubiquity of cloud computing, characterized by constant connectivity that enhances file accessibility and sharing, is further contributing to market growth. According to the State of the Cloud Report by Right Scale in 2019, 91 percent of enterprises utilized public cloud services, with 72 percent opting for private cloud services. A majority of businesses, 69 percent, adopted hybrid cloud solutions, thus bolstering market growth through the integration of cloud technologies.

PROCUREMENT DATA CONNECTIVITY MARKET- BY APPLICATION

• Supply Chain Analytics
• Risk Analytics
• Spend Analytics
• Contract Management
• Demand Forecasting
• Others

The procurement data connectivity solution finds application across various verticals, including Supply Chain Analytics, Risk Analytics, Spend Analytics, Contract Management, and Demand Forecasting, among others. Among these applications, supply chain analytics emerges as a widely adopted solution. Supply chain analytics involves the use of diverse analytical methods to enhance supply chain productivity and competitiveness through data-driven insights. Designed to assist multiple business verticals such as manufacturing, retail, consumer products, energy and utilities, and healthcare, supply chain analytics aids in informed decision-making regarding sourcing, supplier management, inventory management, demand planning, and overall supply chain management. The underlying benefits of these analytical tools are driving businesses to adopt procurement data connectivity solutions, thus fueling market growth.

Procurement data connectivity solutions are also extensively employed for spend analytics. This analytical tool offers enhanced insights through Data Visualization, facilitates the adoption of cost-saving initiatives, provides real-time access to vast datasets, and ensures data accuracy and timeliness. By maximizing utilization and minimizing waste, spend analytics enhances system adaptability and reduces organizational expenditure. The proliferation of Bluetooth and Wi-Fi in consumer electronic devices has accelerated the pace and volume of data generation, particularly in the retail industry, thus boosting demand for spend analytics.

PROCUREMENT DATA CONNECTIVITY MARKET- BY END-USER

• Transportation & Logistics
• BFSI (Banking, Financial Services, and Insurance)
• Telecom & IT
• Retail
• Manufacturing
• Others

The procurement data connectivity market is segmented into end-users such as Transportation & Logistics, BFSI (Banking, Financial Services, and Insurance), Telecom & IT, Retail, Manufacturing, among others. The Telecom and IT sector emerges as the primary adopter of procurement data connectivity solutions. The fiercely competitive nature of the telecom and IT industry drives companies to constantly enhance their services to attract and retain clients. The increasing complexity of the telecom business landscape, coupled with a rising number of service providers, has spurred the demand for procurement analytics solutions. The proliferation of smartphones and interconnected portable devices has resulted in a surge of data flowing across telecom networks. Telecom operators leverage this data for analysis, deriving valuable insights that aid in strategic business decisions. Procurement data connectivity solutions play a pivotal role in maximizing profits by enhancing customer experience, optimizing network usage, and facilitating scalability.

PROCUREMENT DATA CONNECTIVITY MARKET- BY REGION

• North America
• Europe
• Asia Pacific
• Latin America
• The Middle East
• Africa

The procurement data connectivity market is geographically segmented into North America, Europe, Asia Pacific, Latin America, The Middle East, and Africa. The Asia Pacific region is projected to exhibit robust growth during the forecast period. The region's flourishing market can be attributed to the emergence of numerous new entrepreneurial ventures aiming to expand their clientele and build customer trust through innovative digital models for a competitive edge over existing competitors. Procurement analytics vendors in this region focus on innovative product line offerings to cater to the evolving market demands. The growth trajectory is further bolstered by widespread adoption of analytics technologies by consumers and businesses alike. The surge in big data and analytics industries in the region is propelled by substantial investments in new technologies and infrastructure development by companies. The analytics markets in countries such as China, Japan, and India are predominantly driven by extensive digital penetration across various sectors. Factors such as increased internet accessibility, widespread adoption of mobile/smartphones, urbanization trends, advancements in machine learning, algorithmic developments, and the rising demand for customer and behavioral analytics are key drivers of analytics adoption in China.

PROCUREMENT DATA CONNECTIVITY MARKET- MAJOR COMPANIES

The procurement data connectivity market is fiercely competitive, with major players focusing on innovation, mergers, and product launches to gain market share and broaden their product portfolios. Some of the notable companies operating in the market include:

1. Accenture Plc
2. BirchStreet Systems LLC
3. Coupa Software Inc.
4. Genpact Ltd.
5. International Business Machines Corp. (IBM)
6. JAGGAER LLC
7. Oracle Corp.
8. Proactis Holdings Plc
9. Rosslyn Data Technologies Plc
10. SAS Institute Inc.

KEY DEVELOPMENTS IN THE PROCUREMENT DATA CONNECTIVITY MARKET

• PRODUCT LAUNCH- In March 2020, SAP SE introduced a next-generation spend management solution by integrating procurement and ERP software, providing clients with comprehensive insights and control to achieve their objectives.
• PRODUCT LAUNCH-Coupa, a provider of cloud-based spend management software, incorporated voice activation using Amazon Alexa into its business spend management (BSM) solution, enabling users to manage inventory, locate goods, and reorder stock efficiently.
• COLLABORATION- In October 2019, LevaData, a vendor specializing in supply chain and procurement optimization solutions, partnered with IBM to enhance its data analytics capabilities. The collaboration resulted in the launch of the DirectSpend IQ solution, which combines IBM managed services with LevaData's cognitive sourcing platform. This collaboration provides supply chain and procurement professionals with access to valuable data and insights, enabling them to identify cost-saving opportunities for indirect procurement.
• COLLABORATION-Zycus, a leading provider of end-to-end Source-to-Pay procurement suites, announced a collaboration with an Australian government regulatory agency for its procurement reform. The agency aims to streamline its procurement processes to enhance productivity in e-Sourcing, Contract Management, and Supplier Information Management activities.