Procurement Contract Management Market Size, Share, Growth, And Industry Analysis, By Type (Cloud Deployment, Local Deployment), By Application (Big Business, Small, Medium and Micro Enterprises), And By Regional Insights and Forecast to 2031

Updated On: 10 June 2024

PROCUREMENT CONTRACT MANAGEMENT MARKET REPORT OVERVIEW

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The global procurement contract management market size was USD 746 million in 2020 and will touch USD 1743.2 million by 2027, exhibiting a CAGR of 12.9% during the forecast period.

The performance of market deal with purchase contract management is key to the business efficiency and effectiveness in the procurement process by governing contract sealing, execution, and monitoring between the buyers and vendors. Also, now organizations are aware that carrying out procurement without intermediaries is beneficial for planning costs and liquidation of procurement risks, therefore there are many requests for an automated contract management system. These innovations address all this spectrum of functionalities that involve contract creation among others transaction performance, compliance management, and supplier relationship management. In addition, the digital technologies like AI and blockchain, which have come up, have led to the changing nature of procurement contract management landscape but in the positive perspective promising performance in the areas of transparency, agility and value-generation for businesses across industries.

COVID19 Impact: Market Growth Restrained by Pandemic Due to Project Delays and Cancellations

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to market’s growth and demand returning to pre-pandemic levels.

The COVID-19 pandemic has exerted a notable negative impact on the procurement contract management market. With the planetary pandemonium of the global supply chain, enterprises struggle to survive with the extended contracts with suppliers, the revision of the terms, and the assurance of the implementation of only available agreements in the contemporary markets. However, the problems related to travel restrictions and offshore labor resulted in additional complexities of contract negotiations and execution, which, in part, delayed and made inefficient the workflow. Also, businesses that were affected by the crisis due to the economic meltdown did not make the right allocations of funds which consequently prevented or reduced their ranges of Purchase contract management software. However, the Corona period has not just pushed for digital transformation but there has been an increasing adoption of technology-enabled contract management methods especially through the current period to navigate and overcome the challenges jointly put forth by the COVID-19 pandemic and set the foundation for the future.

LATEST TRENDS

"Adoption of Blockchain Technology for Transparent and Secure Contract Management in Procurement"

A notable trend in the procurement contract management market is the increasing adoption of blockchain technology. By using the decentralized and unchangeable ledger system into the contract management processes, blockchain offers transparency, security and integrity in the contract management processes. Smart contracts are automation tools that will serve as the fulfillment of predetermined terms and conditions when some of them are reached. This has not only eliminated the need for manual power but also reduced the occurrence of errors. Secondly, blockchain provides with the sharing of the secure data among various parties and collaborators who will still be able to have privacy and confidentiality of their data. The application of this tool not only fosters trust and collaboration among investors but it is also a medium promoting streamlined auditing and compliance verification, therefore the practices are more effective and trustworthy which are realized in procurement contract management.

PROCUREMENT CONTRACT MANAGEMENT MARKET SEGMENTATION

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By Type

Based on type the global market can be categorized into cloud deployment, local deployment

• Cloud deployment: Involves hosting the procurement contract management software on remote servers accessed via the internet, offering scalability and accessibility from anywhere.

• Local deployment: Entails installing and running the procurement contract management software on the organization's own servers and infrastructure, providing greater control over data and security but requiring higher upfront investment and maintenance.

By Application

Based on application the global market can be categorized as big business, small, medium and micro enterprises

• Big businesses: Refer to large-scale enterprises with extensive operations and significant procurement needs, often requiring robust contract management solutions to manage complex contracts and vendor relationships efficiently.

• Small, medium, and micro enterprises: Encompass businesses of varying sizes, typically with more limited resources and procurement requirements, necessitating flexible and cost-effective contract management solutions tailored to their specific needs and scale.

DRIVING FACTORS

"Regulatory Compliance Requirements Drives the Market"

As part of the debt repayment plan, we have proposed that the borrowers should apply for debt consolidation loans from banks or credit unions with an excellent reputation. This way, we will take advantage of the better terms and reduce the overall interest rates. The best contract management tools also allow a corporation to be able to deal with multiple laws and regulations by having them save on the costs of compliance monitoring, workers being made to follow the contract terms, and bringing down the risk of anything legal. Some of the regulations include, GDPR, Sarbanes-Oxley and industry-specific guidelines that guide the purchasing process through management of contract procurement systems.

"Focus on Cost Optimization and Efficiency Drives the Market"

Companies, in turn, never stop trying to reduce their expenses and intensify the efficiency level of gathering their materials in purchasing operations. An aspect that stands out as to how contract management is critical for mission success is that it provides a mechanism to how the contract creation, negotiation, and execution processes can be frustrate free, thereby reducing the contract cycle time and the amount of manual supervision. Lastly, contract management software serves as a tool for efficient vendor management, negotiations, and strategic sourcing, which will in turn, result in cost-efficiency and improved procurement results. As organizations look for ways to get buy in to their purchasing activities, demand for the most tech savvy tools in procurement continues to grow.

RESTRAINING FACTORS

"Resistance to Change and Organizational Silos Restrains the Market Growth"

The resistance of the organization inside when executing the new procurement contracting management becomes a reality instead. The roots of resistance can come from either socio-cultural concern, such as a resistance to adopting new technology, social norms, or even job loss. Also, organizational silos may exist between departments involved in procurement process. Resistance to change may hinder the introduction and functioning of modern contract management systems bringing in fewer possibilities of applying all their benefits related to efficiency, cost savings, and risk management. Resistance to change necessitates well-powered change management strategies, efficient communication, and materialization of enterprise goals to lead to the visualization of the system adoption process.

PROCUREMENT CONTRACT MANAGEMENT MARKET REGIONAL INSIGHTS

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North America Emerges as the Pivotal Driver in the Market Due to Advanced Technology

The market is primarily segregated into Europe, Latin America, Asia Pacific, North America, and Middle East & Africa.

The region expected to play a dominant role in the procurement contract management market share is North America. The root cause of this superiority is companies that are big, technology which is advanced, and standards of regulations which are tight on the area of contract management and its practices. On the other hand, economic region counts on of mature procurement solutions and services market with high level of awareness among businesses about the necessity of contract management in order to reduce the cost of future procurement and to prevent risks and non-compliance. Additionally, the growing popularity in cloud-based contract management solutions and the startup of new technologies, like Artificial intelligence and blockchain, are encouraging this market.

KEY INDUSTRY PLAYERS

"Key Industry Players Shaping the Market Through Innovation and Market Expansion"

We have top companies in the procurement contract management area competing with each other to ramp up innovation and drive the market growth such as SAP Ariba, Coupa Software, Icertis, Oracle Corporation, and IBM Corporation which fully explain the situation. Adopting technologies such as AI, blockchain, and cloud computing as well as providing end-to-end solutions like contract life-cycle management, compliance and supplier relationship management, these businesses are providing businesses with the necessary tools. By means of their strategic collaborations, acquisitions and worldwide reach, they always improve their service to accommodate to changing Buyer needs, in that way, simplifies the procurement processes and minimizes the risks. Through their participations, they control the way of procuring and providing the services and goods to worldwide businesses. Thus, the operations become easier and the edge of competitiveness is attained for the business.

List of Market Players Profile

• SAP Ariba (Germany)
• IBM (U.S.)
• Concord (U.S.)
• Icertis (U.S.)
• PandaDoc (U.S.)
• Oracle (U.S.)
• Coupa (U.S.)
• Conga (U.S.)
• Agiloft (U.S.)
• Contract Logix (U.S.)

INDUSTRIAL DEVELOPMENT

October 2022: An important development in the contract management market is the increasing focus on AI to increase automation such as machine learning and natural language processing. These advancements allow 3rd party contract management systems understand and analyze the unstructured data contained on contract documents, thus expediting the extraction, classification and analysis of contracts. Through exploiting the machine learning algorithms, companies can do away with the tedious routine tasks, pull out important arguments from the contracts as well as make evidence-based decisions which result to highly sophisticated procurement operations. In order to improve efficiency as well as accuracy, compliance in contract management brings about a realization of how organizations can be more effective while seeking to minimize risks that may eventually come about with a dynamic business landscape.

REPORT COVERAGE

The procurement contact management market growth is witnessed due to improving the technology, highlighting the authorities’ need to meet compliance regulations and adapting to business environment changes. The well-known companies such as Ariba SAP, Coupa Software, Icertis, Oracle Corp. and IBM Corp are at the front-line, fortifying the market growth and technological development of these commodities through their consistent striving to achieving excellence in delivery of extensive solutions and customer satisfaction requirements. Technology advancement in the field of industrial production becoming integrated with machine learning and NLP technologies become one of the factors contributing to the improvement of the efficiency and effectiveness of contract management systems. The high demand for cost optimization, risk mitigation and compliance in sourcing and contract management is rising in line with that. This in effect gives rise to the market of robust software solutions by the means of which companies will have opportunities for development and expansion.