Procurement Risk and Compliance Technology Market Size (2024-2030)

The valuation of the Procurement Risk and Compliance Technology Market stood at USD 11.49 billion, with a projected expansion to reach USD 11.49 billion by 2030. Forecasted for the period between 2024 and 2030, the market anticipates a Compound Annual Growth Rate (CAGR) of 9.4%.

Industry Overview:

E-procurement, the digital execution of the procurement cycle encompassing requisition identification, spending analysis, contract establishment with suppliers, and actual product procurement and evaluation, constitutes a pivotal process in modern business operations. Vigilance against risks across every phase of procurement is imperative for businesses. The spectrum of procurement risks encompasses non-compliance, suboptimal vendor selection, disorderly vendor management, inaccurate demand analysis, procurement delays, error-prone manual internal processing, and talent scarcities. Given the magnitude of potential procurement risks, adopting supply chain risk management solutions becomes imperative. Procurement compliance involves the formulation, adherence, and enforcement of processes for company spend management to ensure adherence to company-approved policies. Employing robust technological frameworks is crucial for streamlining risk assessment processes and risk management solutions. The integration of procurement risk and compliance technology facilitates real-time monitoring and management of procurement processes, enabling the identification of bottlenecks as they arise, thus reducing risks, streamlining tasks, minimizing errors, and automating operations.

The procurement risk and compliance market observe ongoing developments and increased partnerships, leading to the adoption of procurement software. According to Frevvo, the forthcoming iteration of procurement systems is expected to be user-centric rather than office-centric. Approximately 70% of companies are investing in such technology as buyers increasingly prefer interactions via self-service portals.

COVID-19 Impact on Procurement Risk and Compliance Technology Market:

The COVID-19 pandemic profoundly disrupted the logistics and supply chain operations of major corporations, resulting in expired goods and escalated transportation costs, leading to financial losses. Government-imposed lockdowns led to warehouse overcrowding. Transitioning to digital procurement models could mitigate challenges, enabling efficient tracking of Goods Received Notes (GRN) and Invoice Reference Numbers (IRN) to sustain productivity during lockdowns. Automating procurement payment processes could bolster the adoption of procurement risk and compliance software solutions. E-procurement technologies facilitate real-time communication with preferred suppliers, while IoT data utilization and device check-ins enable comprehensive mapping and verification throughout shipment custody chains. Software companies are intensifying their focus on in-demand technologies and innovating to meet client needs amidst the multifaceted challenges posed by the pandemic. Procurement technology aids in identifying high-liability goods and implementing preventive measures, with anticipated sustained adoption post-pandemic as companies strive to fortify their supply chains and mitigate risks.

Market Drivers:

The manifold benefits of procurement risk and compliance technology, including transparent data management, analysis, and optimization of Procurement Return on Investment (ROI), collectively propel market expansion.

With a centralized, interconnected document repository accessible to key stakeholders, management and staff can collect, analyze, and leverage data to generate comprehensive audit trails, precise financial reports, and forecasts. The software facilitates compliance functions, enabling the creation of legally and financially compliant contract and document templates, thereby saving time and labor. AI-driven automation, coupled with centralized documentation and vendor evaluations, ensures holistic visibility into areas susceptible to undue risk due to supplier non-compliance. Procurement software solutions serve as effective tools for evaluating procurement functions and enhancing organizational and supply chain compliance, driving market growth.

Automation enhances Spending, Supplier, and Contract Compliance, alongside cost reduction and Value Creation with Compliance, stimulating market growth.

Dedicated software solutions enable the establishment of internal controls for every procurement process step, facilitating transparent tracking for authorizations from purchase orders to payments. Integration with the supply chain streamlines access to approved catalogs from preferred suppliers meeting legal, financial, and internal requisites, enhancing accountability and access. Procurement risk and compliance technology and tools simplify processes, ensuring departmental compliance and supporting broader value-building initiatives, thereby driving market expansion.

Technological advancements catalyze evolution within the supply chain industry, fostering market growth.

Advances in Information and Communication Technology (ICT) facilitate supply chain evolution, with emerging technologies such as IoT, cloud computing, blockchain, AI, 5G, and robotics pivotal in enabling the digital supply network of the future. Transparency and accountability are central to functional supply chains, with AI integration poised to unlock extensive developmental opportunities in the procurement risk and compliance technology market. Technological advancements are expected to augment revenue generation for market participants, offering real-time visibility into suppliers and associated risks.

Market Restraints:

Failure to adopt or fully realize the potential of technology, coupled with limited awareness of supply chain management solutions, may impede market growth.

While manual procurement processes may initially appear straightforward, they can hinder success as operations become more intricate. Legacy technology utilization persists, with a significant proportion of transport and logistics companies facing challenges in upscaling operations during the pandemic due to outdated technology. Maximizing the potential of technology to create value for businesses necessitates fostering innovation and adopting digital procurement solutions to reduce costs. Insufficient skilled personnel and low awareness of supply chain management solutions and their benefits pose barriers to market growth, necessitating enhanced training and awareness initiatives.

Escalating security and privacy concerns among enterprises, coupled with data leakage risks, could dampen market growth.

Enterprises adopting cloud-based procurement risk and compliance technology may encounter security and privacy challenges, with potential regulatory and operational risks stemming from data breaches. Cybersecurity threats pose significant risks to supply chains, prompting organizations to prioritize robust data security measures. Privacy concerns may deter market growth, with unauthorized data access potentially jeopardizing enterprise data security and competitive positioning.

Procurement Risk and Compliance Technology Market – By Component

The Procurement Risk and Compliance Technology Market is categorized into various components:

• Spend Analysis
• Strategic Sourcing
• Spend Management
• Process Management
• Category Management
• Contract Management
• Transaction Management
• Others

The segmentation based on Component indicates the diverse offerings within the market. For instance, Spend Analysis, anticipated to grow at a CAGR of 10.6% during the forecast period, enables companies to identify purchase patterns and cost-saving opportunities. Similarly, Strategic Sourcing, accounting for over 33% of the market share in 2021, aids organizations in adopting better sourcing strategies to navigate challenges such as the COVID-19 pandemic and geopolitical instability.

The Transaction Management segment is poised for significant growth, driven by its pivotal role in enhancing business profitability and fostering long-term supplier relationships. As organizations increasingly focus on optimizing various aspects of transactions, this segment is expected to witness substantial expansion.

Procurement Risk and Compliance Technology Market – By Deployment

The Procurement Risk and Compliance Technology Market encompasses two deployment options:

• Cloud-based
• On-premises

Cloud-based solutions are gaining traction due to their ability to streamline procurement processes efficiently. They offer a structured approach to requisitioning, sourcing, and payment management, enabling businesses to control costs and mitigate supplier risks effectively. Conversely, on-premises installations remain relevant, particularly for organizations preferring in-house software management and training capabilities.

Procurement Risk and Compliance Technology Market – By Technology

The market is characterized by various technological offerings:

• Artificial Intelligence
• Predictive Analytics
• Prescriptive Analytics
• Embedded Intelligence
• Enterprise Commerce Platforms

Artificial Intelligence (AI) plays a pivotal role in offering actionable insights and predictive capabilities, empowering procurement to make data-driven decisions and mitigate disruptions effectively. Predictive and prescriptive analytics further enhance decision-making by identifying potential risks and offering proactive mitigation strategies. Embedded intelligence and Enterprise Commerce Platforms streamline procurement processes by integrating buyers and suppliers into a cohesive ecosystem.

Procurement Risk and Compliance Technology Market – By End User Industry

The market caters to diverse industries, including:

• Retail
• Manufacturing
• Transportation & Logistics
• Healthcare
• BFSI
• Others

In the retail sector, centralized procurement processes and inventory management drive adoption. Manufacturing leads in market share, focusing on enhancing supply chain dynamics and reducing lead times. Across industries, procurement software adoption is increasing to automate tasks and secure favorable vendor rates.

Procurement Risk and Compliance Technology Market - By Region

Geographically, the market is segmented into:

• North America
• Europe
• Asia-Pacific
• The Middle East, Latin America, and Africa

North America dominates the market, driven by the demand for centralized procurement processes. Europe follows suit, with Germany and the UK leading in adoption. The Asia-Pacific region is witnessing rapid growth due to technological advancements and infrastructure investments. Latin America, the Middle East, and Africa exhibit moderate growth, with the UAE showcasing active technology adoption.

Major Key Players in the Market

Key players driving market innovation and growth include:

1. PricewaterhouseCoopers
2. Deloitte Touche Tohmatsu
3. Ernst & Young Global
4. SAP SE
5. Proactis Holdings Plc
6. Ginesys (Ginni Systems Limited)
7. Epicor Software Corporation
8. Coupa Software Inc.,
9. GT Nexus (Infor Inc.)
10. Zycus Inc.
11. Ivalua Inc.
12. Microsoft Corporation​
13. Oracle Corporation
14. Basware AS
15. Mercateo AG
16. GEP Corporation​
17. Jaggaer Inc.

These players are actively engaged in product innovation, strategic partnerships, and mergers to maintain market competitiveness and meet evolving customer needs.

Notable Developments in the Market:

Recent market developments include product launches and strategic partnerships:

• SAP SE introduced the CommBox AI omnichannel solution, integrating it into SAP Sales Cloud to enhance customer interactions.
• GEP partnered with Brunei Shell Petroleum Company Sdn Bhd (BSP) to manage complete source-to-pay operations.
• Proactis partnered with Agilyx Group to offer spend management solutions to Agilyx customers.
• GEP collaborated with Cheniere Energy Inc. to provide procurement software, GEP SMART.
• Epicor Software Corporation launched Epicor Commerce Connect Express to improve online experiences.
• CobbleStone Software released Contract Insight Enterprise 17.6.0, enhancing contract management capabilities.