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The tail spend management solutions market is estimated to grow by USD 453.1 million at a CAGR of 4.74% between 2022 and 2027. The growth of the market depends on several factors, including the increasing focus on cost reduction, the growing complexity of supply chain management, and the adoption of cloud-based solutions.
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The increasing focus on cost reduction is notably driving market growth, although factors such as data quality issues may challenge market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The increasing focus on cost reduction is notably driving market growth. Many companies are trying to reduce costs while maintaining quality. Tail spend management enables significant cost savings. These solutions help companies gain better visibility and control over their tail spend, which allows them to identify cost-saving opportunities, consolidate suppliers, negotiate better pricing, and reduce maverick spend. Companies can free up resources and reduce the administrative burden associated with tail spend management by automating and streamlining the procurement process.
The COVID-19 pandemic has highlighted the importance of cost reduction for companies during the economic downturn. As a result, many organizations are planning to optimize their procurement processes and reduce costs. Tail spend management solutions help achieve these goals by enabling companies to save costs and operate efficiently. Thus, the increasing focus on cost reduction by end-user industries such as retail and manufacturing will drive the demand, which, in turn, will boost the growth of the market during the forecast period.
The increased adoption of AI and ML is one of the major market trends. AI and ML algorithms help automate procurement processes, identify cost-saving opportunities, and provide data-driven insights. They can be used to automate routine tasks, such as purchase order processing and invoice management. AI and ML algorithms can analyze historical spending data to identify patterns and predict future spending trends, which can help companies identify cost-saving opportunities and optimize their supplier relationships.
AI and ML algorithms can help companies identify new suppliers that meet their needs based on factors such as pricing, quality, and delivery times. Natural language processing (NLP) technology can be used to analyze unstructured data, which can help companies identify potential issues, such as non-compliance with contract terms, and take necessary action. In addition, AI and ML algorithms can analyze spending data to detect fraudulent activity, such as duplicate invoices or unauthorized purchases. These factors will drive the growth of the market during the forecast period.
Data quality issues may challenge market growth. Tail spend management solutions rely on accurate and up-to-date data to provide insights into spending patterns, identify cost-saving opportunities, and optimize relationships. However, many companies face data quality issues, including incomplete or inaccurate data. Various factors contribute to data quality issues in tail spend management.
Tail spend involves a large number of suppliers, each with its own data formats and systems. This can lead to inconsistencies in data quality and make it difficult to compare and analyze spending across suppliers. Moreover, manual data entry is prone to errors and can lead to incomplete or inaccurate data. As data may be stored in different systems or departments, accessing and consolidating it for analysis may be difficult. Moreover, data may become outdated over time, especially in fast-moving industries where supplier relationships and pricing can change quickly. These factors are expected to hinder the growth of the market during the forecast period.
The market growth analysis 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 market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
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.
ASM Technologies Ltd. - The company offers tail spend management solutions to reduce costs, improve operational efficiencies, and mitigate risk.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about 15 market players, 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 share growth by the spend analytics segment will be significant during the forecast period. The growth of this segment is attributed to factors such as the increasing need for companies to gain visibility into their spending patterns and identify opportunities for cost savings and process improvements.
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The spend analytics segment was valued at USD 857.10 million in 2017 and continued to grow until 2021. The increasing adoption of cloud-based spend analytics solutions is driving the growth of this segment. Cloud-based solutions offer several advantages over traditional on-premise solutions, such as scalability, flexibility, and cost-effectiveness. These solutions allow companies to access spend analytics capabilities on a subscription basis. The increasing use of advanced analytics technologies, such as ML and AI, is also driving the growth of this segment. These technologies enable companies to analyze large amounts of data in less time and with more accuracy. Such factors will increase the demand for spend analytics during the forecast period.
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North America is estimated to contribute 38% 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 growth of the market in North America is attributed to factors such as highly developed procurement processes and the increasing demand for cost optimization and process efficiency. The increasing adoption of digital technologies and automation is also driving the regional market's growth. Many companies are investing in digital transformation initiatives to improve their operational efficiency and reduce costs. Tail spend management solutions can help these companies automate their procurement processes for low-value items. The highly competitive business environment is also driving the growth of the regional market. Tail spend management solutions can help businesses consolidate their procurement processes, reduce the number of Companies, and improve visibility and control over their spending. Thus, the growth of the market in North America will be driven by digital transformation initiatives, competitive pressures, and regulatory requirements during the forecast period.
The Global Tail Spend Management Solutions Market addresses the challenges of managing contracts, policies, and transactions associated with tail spend. Tail spend management programs offer various benefits, including improved productivity and enhanced customer experience. Procurement teams often handle large contracts while striving for continuous improvements in operational efficiency. This market caters to various industries, including industrial goods companies, banks, and chemical operators, providing solutions for purchasing machine parts, office supplies, and chemical materials.
Venture capital firms are investing in innovative technologies, such as artificial intelligence-enabled tail spend management software, with Insight Partners leading a recent Series A investment round. Key players like GEP, Proactis Holdings Limited, and DXC Technology Company offer procure-to-pay solutions, leveraging machine learning to optimize supply chain operations and streamline procurement processes.
The market forecasting report forecasts market growth by revenue at global, regional, & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Tail Spend Management Solutions Market Scope |
|
Report Coverage |
Details |
Page number |
162 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.74% |
Market growth 2023-2027 |
USD 453.1 million |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
3.89 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 38% |
Key countries |
US, China, Japan, UK, and France |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ASM Technologies Ltd., Basware Corp., Capita Plc, Corcentric Inc., Fairmarkit Inc., Ivalua Inc., JAGGAER LLC, Logistic Solution Inc., NB Ventures Inc., SAP SE, Simfoni Ltd., Technology Concepts Group International, UNA, V LINE Europe GmbH, Zycus Inc., and Proactis Holdings plc |
Market dynamics |
Parent market analysis, 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 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 Solution
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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