E-procurement set to contribute to growth in electronics purchasing

A new study has revealed that the electronic purchasing software market will grow up to 12 per cent in 2011 to US$4.4 billion with e-procurement and e-sourcing remaining the two largest categories.

Andrew Bartels, the lead Forrester analyst for the report, says contract life cycle management (CLM), automated spend analysis, services procurement, and supplier risk and performance management (SRPM) will also grow by leveraging niches.

Aside from the uptick in e-purchasing software market revenue, Forrester predicts e-procurement will lag behind the overall e-purchasing market; e-sourcing will slow to an 8 percent growth rate after a 2010 rebound, and the gap between large and midsized vendors will narrow in 2011. And both large and midsized companies in the sector are forecast to make acquisitions.

Mergers and acquisitions will become the biggest challenge facing companies in the e-procurement software market this year. Since many companies involved in e-purchasing will grow at a faster clip this year, they could become acquirers or acquisition targets.

Meanwhile, strong growth in e-purchasing is expected to trigger opportunities in other sectors such as cloud computing, as well as what Forrester calls "smart computing," products combining analytics and content to aid collaboration and achieve key business objectives.

Services procurement, supplier risk and performance management, spend analysis, and contract lifecycle management are examples of areas where opportunities exist in smart computing.

The marketing and advertising industries lack smart computing products, and, for companies looking to expand into other markets, this could become a niche.

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