Today, Gartner released a survey indicating the global supply chain management and procurement software market grew by 7.3% in 2013 to $8.9 billion (US Dollars).
According to Chad Eschinger, research vice president at Gartner, “Cloud and subscription-based pricing is shifting revenue streams and influencing growth. The impact of cloud on traditional on-premises license sales outside of the procurement market, which is heavily influenced by software as a service (SaaS), is minimal today. Hence, while growth rates are high, the starting point is much lower and many of the deals are for specific functionality, rather than full suite deployments.”
SAP lead the charge $2.14 billion in software revenue for 2013.
While many of the organizations purchasing procurement software are larger organizations, it still begs the question, “who is in charge of making these purchases?” Are the procurement experts in these specific organizations who are about to receive a “shiny new toy” savvy enough to negotiate a deal where they are getting the best possible terms in regards to a variety of metrics? Are they including IT in their conversations and taking into account the amount of IT resources necessary on such projects? Also, are they looking at negotiating service level agreements with measurable metrics and penalties involved for not meeting particular thresholds concerning project installation, delivery, support and critical updates?
To use a sports analogy, just because you have a set of Callaway golf clubs doesn’t mean you will play golf like Phil Mickelson. The aforementioned “shiny new toy” could be an asset to an organization, provided those using it are well-educated procurement professionals with a purchasing certification in their experience