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By: IBISWorld Analyst, Torsten Edstam
In August, IBISWorld took a look at the disruptive impact of automation on construction, transportation and financial services markets. This month, we are examining software solutions that allow businesses to automate several processes, including those related to procurement and financial operations. By understanding the benefits of these different types of software and the market conditions surrounding them, buyers will be in a better position to make strategic purchasing decisions that will benefit their companies in the long run, especially as increasing demand for some software solutions continues to pressure prices upward.
Driving Efficiencies with Procurement & Related Software
According to a recent survey conducted by ProcureCon Europe and WBR Digital, procurement officers look for tools that provide automatic spend analytics, algorithmic marketplace recommendations and the ability to set automatic rules for purchase orders. The survey showed that 47% of senior procurement officers believe that implementing automated procurement processes should be a high priority. In fact, about 90% of the procurement officers surveyed are already using automated supply management systems that allow them to analyze spending and manage supplier information.
Unfortunately for buyers, demand for procurement software, which allows procurement departments to facilitate tasks ranging from drafting RFPs and selecting vendors to invoicing and payment, has strengthened substantially. This strengthened demand has prompted providers to raise prices at an estimated annualized rate of 0.8% in the past three years. Suppliers are expected to continue raising prices in the next three years at an annualized rate of 0.4%, as demand grows further. However, to mitigate rising prices, buyers can often receive discounts by bundling their procurement software with supply chain management software or inventory management software, as these solutions are frequently integrated.