Supply chain management software is big business, and is set to get even bigger. But it looks like procurement management software, specifically, is growing at an even faster rate.

“The provider landscape is growing and evolving so rapidly,” said Remko van Hoek, professor of Supply Chain Management in the Sam M. Walton College of Business at the University of Arkansas, at the recent Digital Procurement World conference in Amsterdam. “Capital is flowing into providers. There’s a lot of investor money coming into the procurement space. For procurement professionals, this is very exciting, because all these companies are helping solve their problems.”

Looking around DPW's two vendor floors in the soaring 19th-century Gothic architectural marvel that is Amsterdam’s Beurs van Berlage (pictured), it was easy to believe him. The supply chain management software market size was valued at $18.76 billion in 2023, and is predicted to grow to $20.07 billion by 2031, according to a November report by SkyQuest Technology Consulting. But the procurement management software segment of that is currently valued at $5.01 billion, and is projected to grow to $9.8 billion by 2031, at a rate of nearly three times the overall supply chain management software market, says TrendSpotter Analytic.

And that’s a timely thing, because procurement is already following supply chain management out of the role of “just a cost center” and onto a seat at the C-level table, attendees and speakers at DPW agreed. To do so, they will need not just good technology tools, but the confidence to use them.

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“More leaders are beginning to be willing to share lessons about how to select and adopt and roll out this technology,” said Professor van Hoek, pointing to the well-documented example of Walmart, whose adoption of procurement management software was the subject of a November, 2022 article authored by van Hoek and others in the Harvard Business Review entitled “How Walmart Automated Supplier Negotiations.” Professor van Hoek adds Maersk, Google and others to that list.

What emerged as a persistent theme at the 2024 DPW conference was that a better, more transparent and efficient procurement function could, in multiple ways, lead to a better world. These include reversing environmental decline, income inequality, food insecurity and inadequate access to healthcare.

However, there remains an adoption problem. “If we all have it, or can get it relatively inexpensively, why aren’t we all using it?” van Hoek asked. He cited lack of confidence in the roadmap for digital transformation many companies have created, but have yet to follow diligently, plus a low confidence in the ability to change. “We know where to go, but not how to get there,” he said. That makes it all the more critical for companies to look to those who are blazing the trail. “Lessons are being learned by leaders about how to roll out this technology,” he said. 

Another problem is lack of talent in the procurement profession. People able "to bring this strategic opportunity to fruition,” van Hoek continued. “And there isn’t a procurement leader out there who wouldn’t say the same. That’s why I got back into teaching. What’s energizing is that the students realize this is actually kind of cool and interesting.”

Van Hoek previously held several senior procurement positions, including senior vice president of sourcing and procurement at the Walt Disney Company. “We’re creating great leaders of the future, and it’s exciting when you can tell the story really well about what procurement means for business and society. Already, now, a lot of students think that it’s important, and that you can get a good job in it. That’s very hopeful.”

“We still have a long way to go, obviously,” said van Hoek. “We’ve only just scratched the surface of what procurement could be.”