Deciphering the Procurement Technology Market
Recently Gartner released a report – Magic Quadrant for Strategic Sourcing Application Suites 2015 evaluating the strategic sourcing application suites market. The strategic sourcing application suite delivers four primary capabilities – Spend Analysis, eSourcing, Contract Management and Supply Base Management.
The report evaluates 14 vendors on two parameters – Ability to Execute – products, processes, systems, methods and procedures to achieve competitiveness, efficiency and effectiveness and Completeness of Vision – to grasp current and future market and technology trends, customer needs, and competitive forces as Gartner views them.
We believe that the procurement technology landscape has changed quite dramatically in last one year itself. While last year’s report had eight players in the leaders quadrant, this year the market has become more pronounced with just four players marking the leaders’ territory. (As seen in the graph above).
The procurement function is becoming more strategic. Procurement professionals today are utilizing technology to not just source products/services but configuring the solutions to track savings, measure and monitor supply risk, support category management, and leverage community/ecosystem knowledge.
Some of the trends highlighted in the report are*;
- The global strategic sourcing application suite market was expected to achieve $1.1 billion in revenue in 2014; Gartner expects this market to achieve a compound annual growth rate (CAGR) growth rate of 8% to reach $1.5 billion by 2018
- Multitenant SaaS delivery dominates. 81 percent of the references provided for this report are deployed as multitenant SaaS. 14 percent are private cloud, and the remaining 5% are on-premises installations. The major driver for multitenant SaaS is significantly easier upgradability and, thus, access to innovation
- Mobile support is on the rise. 53 percent of the vendors covered offer the ability to approve a contract or sourcing event from a mobile device, up dramatically from 34% in 2013
- Big data is on the rise. 70 percent of the vendors in this report offer a supplier marketplace
- Procurement is the buyer. 82 percent of references said procurement was the lead decision maker for selecting a strategic sourcing suite
To read Gartner’s analysis of the procurement technology landscape in detail, click on the download report below.
*Gartner, Inc., Magic Quadrant for Strategic Sourcing Application Suites, Deborah R Wilson, Richard Adams