IBISWorld’s Dale Schmidt has written an article that identifies and provides price trends for “a handful of different software products that can benefit procurement departments.” Here are highlights:
Procurement Software – “Most vendors sell their software as independent modules of functionality that buyers can purchase in any combination. …procurement software is forecast to grow at a 1.0% average annual rate in the three years to 2018 as an improving economy and increasingly internet-based business environment push up demand for the software. As such, buyers are encouraged to lock in lower prices now.”
Supply Chain Management Software – “…the mere existence of open-source SCM software has forced vendors of paid version to lower their prices. As a result, the average price is expected to fall at an annualized rate of 1.2% in the three years to 2018. Buyers, therefore, have little urgency to purchase now and can leverage the variety of options to negotiate a favorable deal.”
Contract Management Software – …”unlike the other software in this list, contract management software faces strong competition from other products, namely document management software or manual paper-based contract management systems. While these substitutes are not the best choice for all buyers, their presence has forced vendors to moderate price increases. As such, prices are only forecast to increase 0.8% per year on average through 2018.”
Expense Management Software – “Although the price of expense management software has inched down during the past three years, it is projected to reverse and inch up at an annualized 0.3% during the next three years.”
Inventory Management Software – “In the three years to 2018, prices are forecast to drop an average 1.6% per year. Despite the positive pricing environment, enterprise-size buyers will face some adversity because five vendors dominate that tier of the market, restricting buyers’ options.”
Note – Charts used with permission.