Digital Procurement Systems Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Every organization and its procurement team look forward to negotiating the best deal while procuring a set of products or subscribing to services. Rate benchmarking involves price/cost comparison of more than one set of products/services to analyze the most efficient combination that can potentially help the procurement team in getting the optimum rate.

The cost of developing digital procurement systems is significantly lower in India than in other developed countries like the US, due to the country's large and skilled workforce and low cost of living.The average salary for a software engineer in India is about USD 20,000 per year, while the average salary for a software engineer in the United States is about USD 100,000 per year which is five times higher. It has been discovered that implementing an offshore strategy can assist a corporation in reducing employment costs by more than 50 - 60%. Further, the rate at which these systems are provided to firms also depend on the mode of deployment of the softwares and the pricing models implemented. For example, no matter the length of the term, SaaS providers typically provide yearly contracts with the same monthly rate. Additionally, for a set incremental charge, they let consumers start with a small number of seats and add more later. On the other hand, hosted ASP model providers of perpetual licenses demand contracts with a minimum duration of three years and may grant discounts for longer terms. Additionally, they strive to offer consumers more seats than they will use over the course of the contract, not simply the ones they require right then. 

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Labor cost is one of the key components of the total incurred costs while offering a product or service. Therefore, an organization must decide on whether the focus category should be retained in-house or outsourced if the organization is providing its products or services at competitive prices. If the organization decides in favor of outsourcing, it must understand the difference in the salary structures of suppliers before selecting a supplier and formulating a negotiation strategy.

According to our research, IT support engineers at Microsoft Corporation and Oracle Corporation receive a 37% – 40% higher average salary compared to the salary received by IT support engineers working in companies such as Ivalua Inc., Epicor Software Corporation and Zycus Inc. However, the year-on-year increment rate in all these companies majorly depends on the Key Result Areas (KRAs).

Organizations may find it cumbersome to continuously track all the latest developments in their supplier landscape. Outsourcing the activities related to gathering intelligence allows organizations to focus on their core offerings. At this juncture, our newsletter service can help organizations stay updated with the latest developments and innovations and subsequently assist in preventing disruptions in the supply chain. We have identified the following developments within the digital procurement systems category over the last two years:

In October 2022, Airtel integrated Oracle's SCM cloud and Fusion ERP solutions to address issues including existing integration, automation, and agility for the 5G era. Airtel benefitted from Oracle's cloud fusion solution by streamlining its financial data, supply chain management, and manual tasks.

In October 2022, to enable their customers to pay for their software expenditures, Tropic, a SaaS procurement software platform firm, teamed up with Tranch, a B2B Buy Now Pay Later (BNPL) supplier. Customers of Tropic could send in their bills through Tranch and repay them back via adjustable EMIs for a maximum of one year as a result of this collaboration. Customers of Tropic had to immediately connect their bank accounts through Plaid in order to start and be approved.

In September 2022, with the opening of a new office in Abu Dhabi, GEP, a provider of procurement and supply chain services, increased its market reach. The company since then worked with several middle eastern clients to provide procurement software services in the fields of aviation, packaged goods for consumers, energy, banking and finance, and petroleum.

In December 2021, as part of its plan to grow its business, Zycus has built a branch in Japan. The rising demand for the growth of Software as a Service (SaaS) in the nation were the main factors driving the company's expansion.

In September 2021, McCarthy Holdings, a construction corporation based in the United States, collaborated with GEP to deploy its smart procurement software. The company intends to use GEP procurement systems to transform their source-to-pay process.