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The vendor management software market size is estimated to grow at a CAGR of 12.83% between 2023 and 2028. The market size is forecast to increase by USD 5.34 billion. The growth of the market depends on several factors, including increased adoption of cloud-based vendor management software, adoption of customer-centric pricing strategies, and the need to comply with regulatory requirements. Vendor management software is a software application that helps organizations manage their supplier relationships and expedite the procurement process. It makes contract management, order processing, performance tracking, and vendor selection easier. Organizations may improve sourcing and procurement efficiency, reduce costs, assure compliance, and optimize their supply chains with the use of vendor management software. Organizations that are interested in efficiently handling their vendor ecosystem, increasing efficiency, reducing risks, and getting the most out of their supplier relationships must have this software.
The research report on the vendor management software market offers industry forecasts and segmentation based on type, including retail, BFSI, manufacturing, and healthcare and others. It also segments the market by deployment, which comprises on-premises and cloud-based. Geographically, the report covers North America, Europe, APAC, South America, and the Middle East and Africa. The market size, historical data (2018-2022), and future forecasts are presented in terms of value USD 1.33 billion for all these mentioned segments.
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Vendor Management Software (VMS) is a critical solution for Small and Medium Enterprises (SMEs) seeking to streamline their Supplier Management processes. VMS offers functionalities such as Vendor Tracking, Vendor Compliance, Vendor Procurement Software, Vendor Risk Management, Supplier Relationship Management, Vendor Contract Management, and Performance Management. These features enable cost efficiency, effective vendor selection, and performance monitoring while also addressing regulatory compliance and risk management. Automation processes in VMS help mitigate human error and enhance supply chain resilience. However, implementation costs and compatibility with legacy systems can pose challenges. Data security and privacy issues are also crucial considerations, especially in sectors like Healthcare, Medical Equipment, and Pharmaceuticals. VMS solutions must ensure robust data protection and adherence to industry standards. In summary, Vendor Management Software is an essential tool for businesses aiming to optimize their vendor relationships, improve performance, manage risks, and maintain regulatory compliance. Key benefits include cost savings, enhanced operational efficiency, and risk mitigation.
The adoption of customer-centric pricing strategies is notably driving market growth. The market for Supplier Management Software, including Vendor Tracking Software, Compliance, Procurement, and Risk Management solutions, is experiencing significant growth. SMEs and larger enterprises benefit from cloud-based offerings due to cost efficiency, ease of implementation, and minimal hardware and IT personnel dependency.
These solutions facilitate vendor selection, relationship management, performance monitoring, risk management, regulatory compliance, and automation processes. Key industries adopting this technology are Healthcare (medical equipment, pharmaceuticals), IT and Telecom, Technology products, Software, Raw materials, Retail, Banking services, Insurance products, Education, Government, and Transportation. Cloud-based solutions offer flexibility in scaling, low implementation costs, and improved supply chain resilience, contrasting the high costs and inflexibility of legacy systems. However, concerns regarding data security, privacy issues, and vendor contract management persist. Varying pricing structures of the vendor management software will increase its adoption among end-users, which, in turn, will propel the growth of the vendor management software market during the forecast period.
The rise in demand for integrated vendor management solutions is an emerging trend shaping the market growth. In today's complex business environment, Supplier Management Software, also known as Vendor Management Software, has become essential for organizations. This software suite facilitates effective Vendor Tracking and Compliance, Procurement, Risk Management, and Supplier Relationship Management. With the increasing importance of integration, Vendor Management Software is increasingly being adopted to manage vendor information and contracts, ensuring cost efficiency and performance management.
SMEs and large enterprises alike benefit from this software, addressing concerns such as vendor selection, relationships, performance monitoring, risk management, regulatory compliance, automation processes, and human error. The software also enhances supply chain resilience while mitigating implementation costs, legacy systems, data security, and privacy issues. Industries like Healthcare, Medical equipment, Pharmaceuticals, IT and Telecom, Technology products, Software, Raw materials, Retail, Banking services, Insurance products, Education, Government, and Transportation all stand to gain from implementing Vendor Information Management systems. Therefore, such factors are expected to drive market growth during the forecast period.
High implementation and maintenance costs of on-premises vendor management software a significant challenges hindering the market growth. In the supplier management software market, SMEs face significant challenges in implementing vendor tracking, compliance, procurement, and risk management solutions due to high implementation costs. These expenses encompass system design and customization, training, maintenance, and IT staff requirements. The implementation process necessitates planning, funding, self-assessment, cooperation, and a clear vision from all managerial levels. Post-implementation, software upgrades are essential to maintain competitiveness. Supplier relationship management, contract management, and performance monitoring are crucial aspects of these systems. Vendor information, including contact details and contracts, must be managed effectively for cost efficiency and performance management.
Key industries utilizing vendor management software include healthcare (medical equipment, pharmaceuticals), IT and telecom, technology products, raw materials, retail, banking services, insurance products, education, government, and transportation. Implementation costs, legacy systems, data security, and privacy issues are significant concerns. Automation processes can minimize human error and enhance supply chain resilience. Regulatory compliance is also vital in various sectors. This, in turn, will impede the growth of the market during the forecast period.
The market share growth by the retail segment will be significant during the forecast period. In today's retail industry, Supplier Management Software, also known as Vendor Management Software, plays a crucial role in optimizing supplier relationships and streamlining procurement processes. This software enables Vendor Tracking, Compliance, and Contract Management, ensuring cost efficiency and performance management. SMEs and large enterprises alike benefit from this technology, which facilitates vendor selection, risk management, regulatory compliance, and automation of processes.
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The retail segment was the largest and was valued at USD 1.33 billion in 2018. Vendor Management Software is essential for managing vendor information, mitigating risks, and monitoring performance. It supports vendor procurement, relationship management, and contract management. Key industries adopting this technology include Healthcare (Medical equipment, Pharmaceuticals), IT and Telecom, Technology products, Retail, Banking services, Insurance products, Education, Government, and Transportation. Implementation costs and privacy issues are considerations when implementing Vendor Information Management systems. Legacy systems and data security concerns may also arise. However, the benefits of this software, such as supply chain resilience, reduced human error, and improved vendor relationships, far outweigh the challenges.
The on-premises vendor management software is installed and runs on the organization's premises. The Vendor Management Software market experiences significant revenue growth due to the adoption of this solution by large enterprises for Procurement Management and Sourcing vendors. On-premises deployment is popular, as it allows for Purchase Order and Contract Management, as well as Compliance requirements and Performance Management. Benchmarks and Compliance management are crucial for Business expansions, Acquisitions, and Partnerships. Reporting and analytics provide valuable Economic and Non-economic insights. Despite the high capital investment in hardware and software licenses, the on-premises model ensures data security with minimal third-party interference. Customization and high levels of security are key factors driving market growth. Due to such factors, the on-premises deployment is expected to increase, which in turn will drive the growth of the global market during the forecast period.
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North America is estimated to contribute 39% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The Vendor Management Software market in North America is driven by the need for Procurement Management and Sourcing vendors in various industries to streamline business processes and enhance customer satisfaction. Purchase orders and Contract Management are key functions of these software solutions, which help organizations meet Compliance requirements and ensure Performance Management. Benchmarks and Compliance management are essential for effective Vendor Management, and Reporting and analytics provide valuable insights. Economic factors, such as business expansions, acquisitions, and partnerships, contribute to market growth. Non-economic factors, including the increasing importance of Product benchmarking and the need for continuous improvement, also influence market trends. The maturity of the North American market may result in slower growth during the forecast period, but vendors are upgrading their offerings to maintain their market share. The increased implementation of cloud-based in SMEs and large enterprises has further contributed to the market growth during the forecast period.
The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
360factors Inc. - The company offers vendor management software, namely Predict360, that enables financial organizations to track, manage, and report vendor risks associated with third parties under one platform.
Corcentric Inc. - The company offers vendor management software that retrieves, organizes, and manages supplier information while maximizing engagement and data quality across your global supplier base.
Coupa Software Inc. - The company offers vendor management software that mitigates third-party risk, accelerates supplier onboarding, and continuously monitors partner health with AI-powered insights.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments.
Market Analyst Overview
Vendor Management Software (VMS) is a crucial solution for businesses seeking to streamline their procurement processes and manage supplier relationships effectively. The market is experiencing significant growth due to the increasing demand for automation and digitalization in supply chain management. Software vendors offer various features in their VMS, including contract management, supplier performance tracking, risk management, and inventory management. These solutions enable companies to gain better visibility into their supply chain, improve communication with suppliers, and ensure Vendor Compliance Software with regulations.
Moreover, VMS can help companies reduce costs by automating repetitive tasks, improving supplier relationships, and increasing efficiency. The use of technology, such as artificial intelligence and machine learning, can further enhance the capabilities of VMS, providing predictive analytics and real-time insights. The Vendor Management Market is expected to continue growing, driven by the increasing adoption of cloud based vendor management software and the need for businesses to manage complex supply chains. Companies in various industries, including healthcare, manufacturing, and retail, are investing in VMS to gain a competitive edge and improve their bottom line.
Vendor Management Software Market Scope |
|
Report Coverage |
Details |
Page number |
171 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 12.83% |
Market Growth 2024-2028 |
USD 5.34 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
12.08 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 39% |
Key countries |
US, Canada, China, Germany, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
360factors Inc., Corcentric Inc., Coupa Software Inc., Deskera USA Inc., eSellerHub, Gatekeeper, HICX Solutions Ltd., Intelex Technologies ULC, International Business Machines Corp., Ivalua Inc., LogicGate Inc., LogicManager Inc., MasterControl Solutions Inc., MetricStream Inc., Proactis Holdings plc, Quantivate LLC, SalesWarp, SAP SE, Zoho Corp. Pvt. Ltd., and Zycus Inc. |
Market dynamics |
Parent market analysis, market growth and trends, Market forecasting Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our Market forecast report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Deployment
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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