Recent Trends in Adoption of Supply Chain Software
If the Supply Chain can't be Simplified, New Strategies are Needed to Account for the Complexity
Recently, attendees at the Amber Road user conference had the opportunity to hear William McNeill, Senior Research Analyst at Gartner, speak about global trade trends and priorities. In particular, Mr. McNeill cited a survey of "Supply Chain Digest" readers conducted by Gartner that focused on the adoption of supply chain software. (For more observations on this study, see Dan Gilmore’s comments here.)
The survey of 259 senior supply chain executives found that nearly 35% of respondents identified supply chain visibility and event management (SCVEM) as the most important supply chain management (SCM) and execution (SCE) application for acquisition in 2014.
Of respondents that saw SCVEM as a strategic advantage for their business, 13% had purchased software as a service (SaaS) or cloud-based applications in the past and 26% expected to in the future. This seems to indicate that the companies that see the strategic value of SCVEM initiatives recognize that the best way to integrate with the third-parties that provide visibility data is through ubiquitous online access.
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| Companies that see the strategic value of SCVEM initiatives recognize that the best way to integrate with the third-parties that provide visibility data is through ubiquitous online access. |
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McNeill noted that many organizations are accustomed to exchanging information with supply chain partners through electronic data interchange (EDI). These companies have already seen the strategic value of sharing information with an extended network of supply chain partners and are willing to take the next step to cloud technologies.
In contrast, among those organizations that view supply chain visibility as a cost of doing business, only 5% have purchased SaaS applications and only 15% intend to do so in the future.
When asked about the top three obstacles to achieving their organization's overall supply chain goals and objectives, 41% of respondents chose "difficulty or inability to coordinate and synchronize end-to-end supply chain processes" as one of their chief obstacles. Thirty-seven percent chose "lack of visibility across the supply chain" and 35% chose "supply chain network complexity."
In contrast to the previous year's study, the percentage of respondents citing supply chain network complexity as one of their top obstacles increased by 11%. McNeill sees this as an indication that while the supply chain is actually becoming more complex, supply chain leaders understand that they have to adjust their approach to deal with this inherent complexity. If it can’t be simplified, new strategies are needed to account for complexity.
One way to address these issues is with a SaaS/cloud based solution that integrates partner and visibility data into a comprehensive view of the supply chain. The survey data bears this out with the number of organizations that view online solutions as strategic business enablers and as a way to manage supply chain complexity.
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