| SCDigest Says:
|The AMR Research found that across a wide number of supply chain software categories, there was still a small but important percentage of companies that believe that “custom-built” applications were the best choice for their companies – and that this perception was even stronger in the Europe than the US.
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The supply chain software market in North America and Europe should continue the uptrend that began in 2005, according to a study by AMR Research. While there are many factors driving this growth, the interest in replacing legacy applications with more current, packaged apps, and strategies to become more collaborative stand out as investment drivers.
In AMR Research’s Supply Chain Management Spending Study for 2008, the company projects a total increase in supply chain software spending of 12%, including implementation and other costs, and 7% in software spending alone – good news for supply chain software providers. The data was based on a survey of more than 300 IT and supply chain managers in North America and Europe.
Replacement of existing legacy supply chain applications is a key focus. AMR said that half of the survey respondents plan on retiring legacy applications for new packaged solutions in 2008. However, on average, companies’ supply chain technology spend will be about evenly split between replacing existing applications and deploying new technologies, according to AMR.
On the replacement side, AMR found upgrading order management applications due to high maintenance costs and difficulty integrating the older technology with other applications was the most prominent strategy.
For deployment of new technology, “Applications, technologies and services that facilitate collaboration, not only with external trading partners but those within the boundaries of the enterprise, lead the list for net new functionality that enterprises will adopt over the next year,” according to AMR researchers John Fontanella and Eric Klein. “Vendor managed inventory (VMI) and collaborative forecasting top the list,” there, they add.
ERP, Best-of-Breed – or Custom Built?
The ERP versus best-of-breed software provider wars are at something of a stalement at the moment in terms of market share and adoption.
“The demise of the best of breed supply chain technology vendor is not imminent,” AMR notes. “In fact, it's likely that gains will be made against ERP vendors in areas that require multi-enterprise integration and leading edge functionality.”
(Supply Chain Trends and Issues Article - Continued Below)