Vendor Management Software Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

Vendor Management Software Market Analysis

The Vendor Management Software Market is expected to grow at a CAGR of 14% over the forecast period. Vendor management involves initiating and grooming the relationships with the suppliers of the goods and services a buyer needs for day-to-day operations.

• The increasing need for reducing risks and making faster decisions paved the way for vendor management software to be integrated with the Vendor Management Software Market.
• The lack of availability of vendor information and vendor performance exposes the company to increased supply risk. It prevents the company's ability to act proactively in dire situations, making it imperative for them to look for solutions like VMS that could navigate them through such situations, fueling the growth of the VMS throughout the forecast period.
• Additionally, the growing adoption of cloud-based software due to government initiatives are expected to drive market growth. For instance, the DOD intends to invest around USD 38.6 billion in unclassified IT in the fiscal year 2022. OMB mandates that agencies update, phase out, or combine their portfolios of software programs to promote cloud usage.
• The increasing need to minimize administrative costs is one of the crucial factors that could drive the VMS market growth over the forecast period. Also, the regulated companies must ensure that the third-party goods and services comply with applicable laws, regulations, and best practices making VMS a necessity for such companies.
• However, the high implementation and maintenance cost is one such factor that could play a vital role in hindering the VMS market growth over the forecast period.
• Organizations had several challenges managing suppliers during the COVID-19 pandemic, as worldwide supply chains were interrupted due to strict restrictions and lockdowns enforced by governments worldwide. Industries that were heavily impacted by the crisis, such as banking and finance, manufacturing, energy, and retail and consumer goods, witnessed a decrease in the usage of vendor risk management systems.

Vendor Management Software Industry Segments

A vendor management software provides a platform that allows the user or companies to manage or secure the staffing services on a permanent, temporary or contractual basis. A vendor management system can assist many businesses in managing their external workforce more efficiently. Users can save contact information for vendors, view expenditures, maintain track of contracts, automate vendor onboarding, pay vendors directly, and more with this end-to-end platform. This report segments the market by deployment (on-premise, cloud), end-use industry (retail, BFSI, manufacturing, IT & telecommunications, and other end-user industries), and geography (North America, Europe, Asia Pacific, Latin America, and Middle East and Africa). 

The market sizes and forecasts are in terms of value (USD million) for all the above segments.

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Vendor Management Software Market Trends

Retail Sector is Expected to Hold the Largest Share

• The retail industry depends on many third-party vendors and suppliers for their inventory. It makes retailers prone to many risks. Therefore it becomes imperative for these retailers to look for solutions that help them mitigate such risks. It is expected to boost the vendor management software market demand over the forecast period.
• Quantivate's supplier and vendor management for retail allow retailers to identify potential supplier risks, verify that suppliers are compliant, and continue to monitor changes that can create new chances.
• The companies in the industry are involved in various strategies to maintain their market position. For instance, in August 2022, Volt Systems, a digital firm that offers suppliers more on-demand access to merchandising resources, was acquired by Walmart.
• The increasing trend in retail sales makes vendors serve their customers better, and maintaining healthy relationships with their suppliers is equally important. Vendor management software allows the vendor to satisfy both parties, fueling the demand for the VMS over the forecast period.
• The fluctuating market conditions and consumer trends are responsible for the varying Product pricing and promotion, which makes it essential for retailers to adjust and adapt to such changes quickly. The VMS helps retailers achieve this need, boosting the market's growth over the forecast period.

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