Summary
With the requirements of enterprises for refined procurement management, digital procurement has begun to move from the ERP era to the SRM era. In a narrow sense, digital procurement is SRM (Supplier Relationship Management) software, which covers the entire life cycle from procurement sourcing to delivery settlement and supplier evaluation, and can manage main materials and non-main materials at different granularities.
The complex procurement process of enterprises, the wide variety of categories, the low efficiency of supply chain circulation and the high cost restrict the development of enterprises. The scientific use of digital procurement methods can help companies build close procurement and supply relationships at low cost and high efficiency, improve inventory turnover, speed up supply chain response, and reduce capital occupation.
According to the revenue of SRM software, the market size of the digital procurement software that has been purchased so far will reach 1.6 billion yuan in 2021, a year-on-year increase of 17.9%. Considering the ever-increasing awareness of enterprises to save costs, it is expected that the market size will reach 3.2 billion yuan by 2024, of which SaaS revenue will become the main driving force for market growth.
Compared with enterprise-level software such as CRM and ERP, digital procurement is still in a very early stage of development. The potential market space of China’s SRM software is about 120 billion yuan, and the current penetration rate is only about 1%. With the improvement of the maturity of digital procurement applications, SRM software will follow the path of penetration from super-large enterprises to large enterprises and then to small and medium-sized enterprises.
The directions for digital procurement manufacturers to expand their sources of income and enhance their competitiveness include: 1) developing supply chain financial services, promoting efficient use of funds, and improving customers’ stickiness to management tools; 2) building a business collaboration network to gather a large number of buyers and suppliers, Network effects are formed through efficient connections between supply and demand.
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