LONDON--(BUSINESS WIRE)--According to the latest procurement intelligence report from Technavio, the global IT software market is expected to grow at a CAGR of 5.6% over the next five years due to the increase in demand for industry-specific software that addresses niche business requirements.
The research report titled ‘Global IT Software: Procurement Intelligence Report 2017-2021’ provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning, and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.
“The growth of cloud-based software has greatly benefited enterprises as they are available at low costs, require minimum infrastructure investment, and offer access across devices and digital touchpoints,” said lead Technavio procurement expert Angad Singh for category spend intelligence research. “As cloud servers are off-premises, they require minimum management efforts and offer easy access to software updates,” added Angad.
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Cost saving opportunities in the IT software market
The adoption of cost optimization levers helps buyers of IT software realize cost savings and achieve category management and value benefits (including a reduction in procurement complexities).
Technavio procurement experts have segmented the cost saving opportunities in the IT software market into the following value-enhancement opportunities:
- Adoption of technology
- Supplier Competition
- Adoption of negotiation strategies
- Optimization of procurement practices
- Bundling of services
Adoption of technology saving aspects
Adoption of the cloud computing and deployment model facilitates more than 50% of cost savings, compared to on-premise deployment of any solution.
There has been an increase of approximately 38% in cyber-attacks in 2015 (compared to 2014), and this trend is expected to continue. It is important for buyers to offer increased cyber security via advanced tools and IT security governance. Similarly, suppliers are investing significantly in advanced security tools such as firewalls and anti-virus programs.
Optimization of procurement practices saving aspects
The increasing adoption of online applications has exposed buyers to the risk of outages and server inaccessibility. Hence, it is important that they assess the disaster recovery support offered by suppliers.
Cloud software providers usually add service guarantees and minimum quality levels for all cloud-based services. However, buyers need to assess penalty exclusion criteria that might prevent them from managing risks.
Bundling of services saving aspects
One of the most opportunistic strategic cost-saving levers in the global IT software market is the need for bundling of services related to implementation and maintenance of enterprise applications – implementation planning, training users, and providing related documentation, which helps save up to 15% of the bundled spend area.
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Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.
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