Cloud computing and SaaS are hot topics these days and clearly on the rise. In a recent study conducted by IDC Research (Report dated 7/26/10 – www.managingautomation.com), they concluded the following:

• The SaaS market for enterprise applications and other software will reach $40.5B in 2014 up from $13.1B in 2009 – growing at a 25.3% annual rate
• By 2012, nearly 85% of the new software firms will offer their products based on the SaaS model
• Manufacturing software including logistics management, transportation and warehousing is expected to be among the leading application areas fueling the growth of the SaaS market

 

Sounds like some pretty interesting opportunities for supply chain practitioners. One prime example of this is the emergence of On-Demand Labor Management. For years, this segment of supply chain software has been plagued by very expensive solutions geared toward a very small segment of the market. With the emergence of cloud-based LMS, the barriers to adoption and implementation are suddenly a lot less than they have been in the past. As many of you probably already know, cloud-based computing offers a number of advantages relative to Labor Management Systems:

• Virtually eliminates upfront hardware and 3rd party software costs
• Subscription-based pricing and licensing eliminates expensive, up-front software licenses and Maintenance/Support agreements
• Reduces time required to implement the entire project
• Allows you to focus more of your time & energy on process improvement, training and change management
• Minimizes the costs associated with traditional software upgrades
• Helps drive total cost of ownership (TCO) significantly lower, thus improving ROI

Given the financial advantages of cloud-based computing together with what Dan Gilmore describes as “a very favorable pain to gain ratio” for LMS projects, this trend should make cloud-based LMS even more accessible, affordable and beneficial to a much broader spectrum of the supply chain market. These are certainly exciting times for those of us dealing with supply chain software. Dan wrote a very interesting column back on October 8th called “Supply Chain Tactics for the New Normal” where he encouraged readers to consider a number of options including:

• “Re-Look at your software portfolio” – look into how today’s on-demand supply chain solutions can be of benefit to your organization
• “Don't be the Last to Adopt Labor Management” – on-demand LMS options exist today and could help you drive significant productivity improvements and reduce overall labor costs

With the prediction for rapid growth of cloud-based computing and the availability of on-demand LMS solutions, Dan’s advice may not be that far off the mark.