Supply Chain Software in the Cloud and Other Key Trends
Is supply chain software deployments in the Cloud about set to take off?
I believe - and have believed - the answer to that is Yes.
This change will have huge ramifications for both supply chain software users and providers, undoubtedly changing the software vendor landscape in the end, and opening up whole new ways in how supply chain software will be delivered and consumed.
I've just scratched the surface of the interesting data in the excellent report. Take a look. Is Cloud-based supply chain software simply where it is all headed?
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For all the discussion about Cloud-based software, following somewhat related concepts such as Software as a Service (SaaS) and "on-demand" software before that, the reality is we are early in the journey towards the coming age of Cloud software.
Currently, Cloud-based software represents a small percentage of total deployments, but that number will change dramatically over the next three to five years.
In 2012, I predicted that by the end of 2015, Cloud-based deployments would be the majority of new supply chain software implementations. That prediction may have been a little off in terms of timing, but not in direction, as Cloud momentum continues to build.
Already there is significant traction in areas such as Transportation Management Systems (TMS), Global Trade Management (GTM) solutions, and supply chain visibility, but progressing along nicely in every category of supply chain software as well.
Cloud, however, is not the only trend that will create an inflection point in supply chain software. So too will advanced analytics, and relatedly the concept of "machine learning."
Advanced analytics, in some but not all cases connected to "big data," offers new approaches to supply chain decision support, potentially upending, for example, traditional methods use for forecasting, and ushering in a supply chain world where companies will increasingly be able to predict potential problems or opportunities before they occur.
Machine learning is just what it sounds like, the ability of the software to learn from its successes and past errors - in areas such as forecasting - and improve its approach to drive continuous improvement.
The reality is that in many ways the move towards Cloud will be an enabler of advanced analytics, as it allows data to flow from more sources.
After many years of steady but somewhat incremental progress in supply chain software capabilities and paradigms, these two trends - Cloud-based solutions and advanced analytics - promise to truly shift the status quo in exciting, if not yet fully understood, ways.
So with that as a backdrop, SCDigest recently conducted a survey and subsequent report on supply chain software issues and opportunities, with a special focus supply chain software in the Cloud. The full report is very good - you can download it here: Supply Chain Software Trends and Opportunities Benchmark Report 2016.
Here are some highlights.
As we often do in these surveys, we started by asking respondents to rate their company's level of maturity in both supply chain processes and technology.
We converted a 1 to 7 scale for both questions, with 1 being the least mature and 7 the most mature, into categories, with a 1 score converted to "very low," 2-3 low, 4 average, 5-6 high, and 7 very high, with the results as presented below.