Process Automation – Procurement Best Practices & Sourcing Strategies

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Process Automation Market Global Size:

The introduction of robotic process automation in worldwide organizations to improve the digital experience of consumers, productivity, and cost-effectiveness propelled a global process automation market size to reach $130.5 billion in 2023. ELINT Market Research predicted that this figure will expand at a CAGR of 6.12 percent from 2023–2025. Furthermore, as per this procurement intelligence study, the constant integration of smart technologies like machine learning (ML) and artificial intelligence (AI) into process automation systems helped businesses automate complicated and redundant tasks and save a lot of time.

Many end-user sectors are expected to see a sharp increase in the use of process automation methods due to their increased emphasis on simplifying repetitive operations like data extraction, validation, and transferring; some of these primary industries comprise mining, chemicals, customer products, oil & gas, pharmacies, energy, biotech and more. Additionally, the report states that the process automation industry is anticipated to grow during the projected period as a result of technological developments in robotic process automation that enable neural automation and enhance its functionality.

Market Definition:

Companies employ sophisticated software to execute process automation and automate diverse day-to-day operations like data collection, grouping, and interpretation which help in rapid and well-informed decision-making. Hence, these automation methods help in cutting additional costs and enhancing operational efficiency which serves as one of the main drivers of the expansion of the automation sector.

Process Automation Market Drivers:

1. Emphasis on Increasing Productivity –

Multiple key industries focus on increasing their productivity using process automation techniques which drive immense growth in the global process automation industry. These automation methods help enhance operational efficiency, decrease manufacturing durations, reduce manual errors, and cut additional costs.

2. Prevent Hazardous Events –

Process automation tools help prevent hazardous operations and materials in particular sectors like oil, gas, heavy machinery, chemicals, etc. by automating tasks. Thus, businesses can ensure the safety of their labor from accidents. This factor propels massive development in the process automation market.

Process Automation Market Challenges:

1. Difficulty in Integrating Process Automation Tools –

The biggest challenge that process automation market players face is integrating complicated automation solutions into their exciting infrastructures. These integrations are technically challenging and time-consuming and mainly require the involvement of experts to perform efficiently.

2. Threats of Data Breach –

Another major challenge in the global process automation procurement intelligence market is cybersecurity attacks. As process automation systems are interconnected and store data on the cloud, the risk of data breaches and hacking increases. Therefore, companies require robust cybersecurity measures and updates to protect their systems.

Process Automation Market Opportunities:

1. Rapid Technological Changes –

Constantly rising technological innovations like AI, machine learning, big data, IoT, etc. refine process automation methods and pose great opportunities in the international market. These advancements can easily adjust according to complicated work environments, provide real-time data, safeguard device failures, and much more.

2. Increasing Labor Costs –

Ongoing rise in labor costs drive massive requirements for process automation software that helps organizations reduce additional labor costs. Hence, these organizations invest in automation methods and lower reliance on human labor.

Process Automation Market Segmentation:

1. Various Industry Wise Engagement Models –

The international process automation market comprises different industry-wise engagement models that depend on the scale of operations. For instance, big-scale sectors directly make alliances with original equipment manufacturers (OEMs) to fulfill their automation requirements. Further, medium-sized sectors cooperate with system integrators that help create symmetric automation settings. Lastly, small and startup businesses can also partner with system integrators and distributors based on their automation needs and budget.

2. Key End-Uses Industries –

Major end-user industries that employ process automation systems to execute and automate their operations include oil & gas, metals, mining, medication, paper & pulp, automobile, chemicals, food, beverage, etc.

Pricing and Engagement Models in the Process Automation Market:

Automation integrators operating in the process automation industry employ diverse pricing models to decide the cost of products. The milestone-based pricing model helps companies complete projects in a decided timeframe and achieve predefined goals. Further, the material-based pricing method helps receive payments from clients depending on the precise time and resources expended on the project. Moreover, the cost-plus cost method allows automation integrators to increase the overall project expenditure by an add-on to subsidize expenses and turn a profit. Lastly, the market-priced technique helps decide expenses based on market dynamics.

Additionally, one of the fundamental and merging engagement strategies in the automation sector is partnering with suppliers to build personalized automation systems instead of only depending on existing solutions. This method helps multiple organizations acquire tailored automation tools from sellers.

Regions Analysis of the Process Automation Market:

This procurement market research report states significant countries that appeared to hold high maturity levels in the global process automation market including North America and Europe. Also, a few other nations that operate on the medium market maturity levels include Asia-Pacific and Africa. Furthermore, key regions that are manufacturing and supplying large count of automation systems worldwide at significant rates include Europe at 31%, North America at 24%, and Asia at 28%. Thus, these three countries showcase higher supplier power. Moreover, when it comes to buyer powers, these regions display medium to low-level powers.

Key Contract Terms and Payment Period in the Process Automation Market:

Suppliers can their clients can maintain long-term partnerships using fundamental key contract terms. The first KPI is chacking delivery timeframes that help clients seek products at their required spans. Overall equipment effectiveness (OEE) measure allows clients to examine the efficiency of automation tolls after integration. Additionally, the after-sales support contracts help consumers receive contact assistance and maintenance services from suppliers. Further, these contracts can stay for a significant 60–90 days.

Key Suppliers in the Process Automation Market:

Renowned suppliers of the process automation market include Siemens​, Emerson​, ABB​, Schneider Electric​, Rockwell Automation​, Mitsubishi Electric​, Honeywell​, Yokogawa​, and Omron​.