Travel management software prices are expected to continue falling over the three years to 2017 because of continuing decreases in input costs and rising competition
Los Angeles, CA (PRWEB) January 04, 2015
Travel management software has a buyer power score of 4.3 out of 5. This score reflects strong negotiating power stemming from declining prices and limited supply chain risk. However, moderate switching costs and limited substitutes hurt buyer negotiation power.
Price declines have been encouraged by the mounting level of competition. Over the past three years, the number of suppliers in the market has been rising, which has forced vendors to increasingly compete on price to attract and retain customers. Some of this market’s top suppliers include Concur Technologies and SAP SE. In addition, buyers have benefited strongly from falling product prices resulting mostly from declining prices for inputs such as computers and computer peripherals. “These declining costs have made the process of producing travel management software cheaper,” according to IBISWorld business research analyst Cameron Roark. Falling input costs have also contributed to growth in suppliers' profit margins, reducing financial risk for the average supplier. Thus, buyers benefit from a steady supply of travel management software as well as limited risk from price hikes and supplier bankruptcy.
However, not all characteristics of this market favor buyers. Buyers face moderate switching costs because many vendors integrate their travel management software with the buyer's existing infrastructure, which can be timely and costly to remove or replace. The downtime in between switching vendors can also make it difficult to manage travel and expense operations. Additionally, the low number of substitutes hurts buyer power because the lack of competition from similar goods limits downward pressure on prices.
Buyers have the option of waiting to purchase travel management software until prices fall further. “Travel management software developers are constantly adding features to improve performance and expand functionality. Consequently, buyers can benefit from waiting to purchase the software because it will likely be cheaper and perform better over the next three years,” Roark says. For more information, visit IBISWorld’s Travel Management Software procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of travel management software. This software manages trip approval, booking, expense submission, reimbursing and other administrative tasks to help businesses oversee, regulate and coordinate travel activities and expenses. Travel management software interacts with users through either a browser or an application, processes information through the cloud and typically provides an expense report to management. Travel management software is useful for any organization with frequent travel requirements, such as government agencies, educational institutions, healthcare companies or law firms. This report does not include enterprise resource planning software, accounting software or corporate travel management services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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