We’d all like the latest digital procurement tools. But often, those who aren’t familiar with the procurement software market mistakenly overestimate the cost.
The reality is that procurement tech doesn’t have to be expensive. You don’t need a 6-figure software budget or a large sum to hire consultants for implementation. There’s plenty of digital procurement solutions out there for every budget.
Whether you’re an SME, a mid-market business or a large enterprise, there is now almost certainly something on the market that meets your needs and fits your budget.
So, we’re going to take a quick look at three different price brackets and examine what you can buy with this budget.
Let’s dive in.
Digital procurement tools: What can you get for your budget
What can different amounts of money buy in terms of different procurement tech applications and solutions that are out there?
We’re going to cover three different price points.
- Less than $25,000 a year
- $25,000 – $75,000 a year
- More than $100,000 a year
Let’s take a closer look…
Procurement Software for less than $25,000 a year
First of all, let’s start with the budget end of the market.
This covers software applications that typically cost less than $25,000 per year.
Primary Category | What can you get for a < $25k budget? |
Sourcing | Easy to use, e-sourcing RFP / RFQ tool with modern interface. Some platforms in this price range will also support e-auction capabilities. |
P2P | Simple, user-friendly and easy-to-implement P2P software, likely to be user-based pricing model. Basic cloud-based Accounts Payable workflow automation software also possible in this price range, usually on a cost-per-invoice model. |
S2C | Simple, user-friendly and easy-to-implement RFQ, supplier repository, and contract administration platform designed for the SME market. |
Collaboration Tools | Various types of Project Management and internal stakeholder and supplier collaboration software platforms available within this price range. |
Niche Category Specific | Numerous category specific software, ranging from freight tendering platforms, through to print and promotional items, professional services sourcing, to MRO and spare parts management. |
Data Analytics | Simple spend analytics software, offering a degree of automated classification, but not leveraging advanced AI capabilities. Usually priced based on spend amount being analysed through the tool. |
In this bracket, you will get two typical different types of software.
Firstly, you’ve got niche category specific software that solves a challenge for a particular category of spend. For example, there are software platforms out there targeting marketing, transportation, SaaS, raw materials and professional services procurement.
Along with niche category specific procurement tools, there are also project management and internal collaboration applications in this space.
Secondly, you’ll find software that is aimed more towards SMEs and the lower end of the mid-market. By SMEs, I mean any business below $50 million in revenue. When I say lower end of the mid-market, I’m talking about businesses between $50 million – $200 million in revenue.
Low Cost e-Sourcing Software
Let’s look at e-sourcing software first. For e-sourcing apps, you’re going to get a fairly basic e-sourcing RFP, RFQ tool that has a very modern interface, good user experience, but its actual list of features is going to be somewhat straightforward. Typically, but not always, it will be a license-based product where you’re paying on a per license basis. That’s fine if you’re leading a small-ish procurement team.
You can very easily bring that home for less than $25k a year. There are actually some great solutions in this space.
One that immediately springs to mind is MarketDojo, who do a pay-as-you-go pricing structure. This allows you to get a pretty heavy-hitting tool without signing a long-term contract. And then you’ve got others that play in this space, such as our partners at DeepStream. Depending on how many users you need and what spend you’re putting through the platform, you could probably also bring this home for less than $25k.
Both of these solutions will give you full e-auction functionality for this price as well.
If you were really looking at bargain-basement software, and you only had $5k to $10k, you’re probably not going to get full stack e-auction software. What you can get is some basic Source to Contract (S2C) software. This will provide a basic e-sourcing functionality and a contracts repository.
Low Cost Spend Analytics Software
Let’s move on to spend analytics.
For less than $25k a year, you’re certainly not going to have high-end AI driven tech platforms in this space. But again, depending on how many users you want to have and how much spend you’re classifying, you can still get a pretty robust spend analytics software for that price.
The beauty of spend analytics is that outside of procurement and maybe finance teams, not many other people require access. So, if the platform has user-based pricing, you can often keep the cost down just based on the number of licenses that you buy.
Low Cost Accounts Payable Automation Software
Finally, let’s touch on accounts payable workflow automation software.
$25k will get you a perfectly functional cloud-based AP automation software. It will have robotic process automation (RPA) that can do a lot of the heavy lifting in your accounts payable team.
One of the biggest challenges in accounts payable is hiring and retention of employees in that space. It’s often seen as being a very transactional role with few career development opportunities. So, perhaps some automation software could help you to retain your best team members.
Procurement Software between $25,000 and $75,000 a year
We now move one segment up, and take a look at what you can get from $25k up to about $75k per year. This segment is definitely playing in the middle towards the upper end of the mid-market range.
So, if you’re a business that has $500 million to $1 billion in annual revenue, this typically is the software price point that you’d be playing in.
Mid-Range e-Sourcing Software
Let’s start with e-sourcing again. This budget will get you a comprehensive e-sourcing solution, rich in features that can do auctions. It will also evaluate perhaps some non-price factors within the tool. I’m thinking of our partners DeepStream, or perhaps Archlet, as one great example of a mid-range e-sourcing platform that offers mid-market and enterprise an alternative to the established S2P and S2C suites.
At this price range, you’ll likely also get integration into third party applications for data to augment your supplier evaluations.
Primary Category | What can you buy with a $25k to $75k budget? |
Sourcing | Comprehensive, high-end e-sourcing solution rich in features and full reverse auction capabilities. Able to evaluate non-price factors within the tool. May also have integrations with other data points, or offer vendor intake or contract management capability. |
P2P | Complete, cloud-based P2P software with full app-based functionality, and integrations with a big range of ERP systems. Likely to also offer pretty advanced Invoice-to-Pay automation with OCR technology or even AI-driven enhancements to facilitate invoice matching and automated payment. |
S2C | In the territory of more advanced sourcing modules with auction capabilities. Likely will have supplier onboarding module with some basic due diligence features or document repository. Contracts module will in most cases be more than just a repository. |
Supplier Relationship Management (SRM) | Full stack SRM software offering - depending on the tool - modules such as supplier onboarding, due diligence, supplier audit, supplier performance, internal stakeholder surveys, quality management, fraud checks, sustainability reporting. |
Data Analytics | High end spend analytics software, offering AI-driven spend classification to a high level of accuracy in most cases. Classification typically beyond level 3. May also offer Scope 3 analytics as a core feature. |
Mid-Range Spend Analytics Software
If we look at spend analytics software, now you’re getting into solutions that are powered by AI-driven spend classification. You have quite feature rich applications that are playing in this space. It’s also reasonable to expect that solutions in this price range will also be able to do carbon analytics. Perhaps also some predictive analytics as well.
Modern spend analytics tools are able to leverage AI to classify up to 90% of spend items correctly. This is a segment which has come on leaps and bounds since their first generation applications.
Enterprise-level spend analytics software can easily be purchased within this price bracket. Often, pricing will be based on the amount of spend you’re putting through the platform.
Mid-Range P2P and S2P Software
This level of pricing is typically where you’ll find most offerings in the Procure-to-Pay and Source-to-Pay space. Because many of these solutions are modular, it’s difficult to give precise estimates on pricing for specific solutions.
However, for most configurations, our partners at Procurify and ebidtopay will typically charge somewhere in this range. In some instances, you may also be able to deliver either of these platforms for less than $25k.
However, to optimise their functionality and have an adequate number of users for growing organisations, then you’re going to fall into the lower end of this price bracket.
A complete cloud-based P2P software with full mobile app functionality that can do requisitions, goods receipts, approvals and issue individual payment cards and virtual payment cards.
Mid-Range SRM Software
You can also get pretty feature-rich, full-stack supplier relationship management (SRM) platform within this price range.
This will typically offer supplier audit, supplier onboarding and supplier due diligence modules. In some cases, you can also get SRM platforms that have supplier quality modules and supplier financial risk. The SRM suites which focus on managing more complex services contracts would also typically fall into this price bracket.
You don’t have to spend a fortune to get really good procurement tech these days.
Yes, there are the legacy tech platforms that are much more expensive. But you can most definitely get robust, modern, user-friendly procurement software within this price range too.
Procurement Software for more than $100,000 a year
Let’s now assume that you have a bigger budget. What could you get? It’s time to move up to the Premier League.
This is the enterprise software segment, so the requirements of the software and thus its complexity will be higher.
We need to move beyond some of the more common categories of software we looked at in the previous two sections. This is the territory of automated negotiation, game theory, and multi-tier supply chain monitoring when it comes to third party risk and compliance.
S2P and S2C Suites
If we look at Source-to-Pay S2P and Source-to-Contract S2C, then you’re going to get a full suite, managing sourcing, supplier management, contract management, and also a complete end-to-end P2P functionality with accounts payable automation built in.
The legacy suite providers such as SAP Ariba, Coupa, Jaggaer, and Ivalua are mostly going to fall into this price bracket.
Aside from these traditional suites, I’d like to show some examples of other high-end software applications which could also peak your interest.
Automated Sourcing and Negotiation Software
If we look at the sourcing space, you’re going to get a full stack e-sourcing suite that’s powered by advanced AI capabilities.
The more competitively-priced e-sourcing and e-auction software aims to improve user experience and simplify the more operational side of running sourcing events. In contrast, these high-end tools are focused on leveraging cutting edge technology to assist with tasks which previously would have required human capital to perform.
Pactum
Pactum’s software specialises in autonomous negotiations, leveraging AI to conduct detailed discussions on legal and commercial terms independently. It is designed for large enterprises, capable of renegotiating contracts with suppliers and seamlessly updating corporate systems with new information.
Fairmarkit
Fairmarkit offers an autonomous sourcing platform that revolutionises procurement with AI and automation. It enables teams to source more efficiently and at scale by replacing traditional methods. The software automates repetitive tasks like demand gathering, creating sourcing events, and analysing supplier responses, freeing up valuable team bandwidth.
Arkestro
Arkestro offers a Predictive Procurement Orchestration (PPO) platform that empowers companies to utilise machine learning and behavioural science to optimise procurement cycles. Their goal is to enable faster and more informed buying decisions with features such as data-driven supplier selection, and game theory-driven sourcing events.
Globality
Globality’s software enables autonomous sourcing, harnessing advanced AI to create precise project scopes. It then selects the most qualified suppliers, offering negotiation insights, and facilitating data-driven decisions. Key features include AI-powered scoping to define accurate requirements, merit-based supplier selection from a vetted database, and intelligent analysis for negotiation leverage.
Full Stack Contract Management Software
Icertis
Icertis as a platform not only optimises contract management but also provides deeper analysis and actionable insights, thanks to its AI-driven applications. It enhances critical business performance with specialised applications and integrates with major enterprise systems like Microsoft, SAP, and Salesforce for advanced automation opportunities.
SirionLabs
SirionLabs is a comprehensive contract lifecycle management (CLM) platform that includes features for contract setup, analytics, authoring and negotiation, and obligation management. It also integrates with a wide range of enterprise systems such as ERP, procure-to-pay, CRM, and more, facilitating seamless operations across legal, procurement, sales, finance, IT, and HR departments.
Third Party Risk Management Software
Resilinc
Resilinc offers a comprehensive solution for enhancing supply chain resiliency. Key features include multi-tier supply chain mapping, AI-driven monitoring of global news and social feeds for potential disruptions, and resiliency scoring with patented analytics for supplier and part risk assessment. Additionally, its AI predictive analytics can forecast potential impacts to supplier performance and supply chain risk areas.
Interos
Interos offers a comprehensive platform designed to enhance supply chain resilience. It provides deep insights into hidden supplier relationships and an emphasis on potential cyber vulnerabilities. It does this by identifying connections to restricted countries and assessing compliance risks across multiple domains. The platform facilitates faster supplier due diligence, pre-screening and risk intelligence, ensuring business continuity alongside compliance.
Conclusion
I hope this has given you a little bit more insight into what you can get for whatever budget you had in mind. If you’ve got digital transformation pencilled in and your CFO is receptive and supportive, this also allows you to float some ball park figures with him or her.
Of course, the price of any piece of procurement software will always have a certain element of “it depends”. The features you need, the complexity of your implementation and the level of customisation will all play their part. This is especially true at the higher end of the market. It’s less of an issue at the cheaper end, where many applications are pure-play SaaS (software-as-a-service).
Did you know that we offer a full, white glove RFI-as-a-Service option?
If you don’t know where to start and need some affordable, external support to evaluate the full range of products on the market, then book an intro call and let’s talk.
We can take you from confusion and frustration through to a shortlist of relevant, qualified providers that meet your specific requirements. The time we’ll save you will help get you to your ROI and deliverables much faster.
