Digitalization Boosts Demand for Supply Chain Software


If big numbers galvanize you, attempt the number $thirteen billion on for length. That’s how big analyst firm Gartner says the supply chain management (SCM) market will be utilizing the give up of this year, or as a minimum, that a part of the market made out of software revenue. That’s a gain of 11% from 2016. In fact, the SCM software market is on pace to exceed $19 billion via 2021, as software program as a carrier (SaaS) permits new sales opportunities. By manner of comparison, again in 1999 while we first began following the SCM marketplace inside the pages of the past due, super Supply Chain Technology News (which changed into absorbed into what’s now MH&L), the full market size become said to be $2.6 billion (consistent with AMR Research, which itself became absorbed into Gartner), and became projected to grow via a whopping 50% that year—take into account those heady days earlier than the Internet bubble burst?

“Between 2017 and 2021, Gartner forecasts almost $6 billion in total software program sales may be delivered to the SCM market,” says Chad Eschinger, coping with vp at Gartner. “Digitalization is growing demand for agility and forcing new business models, which is boosting spending in the SCM marketplace.” Gartner’s researchers factor out the numerous special methods SCM companies are looking to carve their very own niches, whether it’s in cellular services, machine getting to know-based totally capabilities, multi-company visibility, Big Data analytics, and the Internet of Things. Again, people with long memories may bear in mind that on the flip of the century, the diverse analyst corporations of the time have been tracking new services from SCM vendors in such areas as synthetic intelligence-based totally capabilities, extended corporation visibility, statistics science, and device-to-system communications. The extra things change, the more new names are carried out to the identical old thoughts.

One issue that hasn’t changed an awful lot over the last couple many years is the way the SCM market is broken down, with the main categories being delivered chain making plans, procurement, and delivery chain execution (essentially, the PLAN, SOURCE, and DELIVER legs of the SCOR Model). According to Gartner, the procurement solutions move most hastily closer to SaaS transport to the cloud, while the supply chain making plans is lagging.

pexels photo

Overall, Gartner reports that the SaaS sales boom is being driven by companies shifting to cloud-first or cloud-handiest deployment fashions, even as cease-customers are becoming more comfortable with cloud safety and more informed approximately the ability of SaaS solutions. By 2021, SaaS deployments are forecast to account for more than 35% of overall SCM spending (see chart).

“To assist support next-era supply chains and real-time business necessities, we count on consolidation of present answers into broader, multi-domain suites, but additionally a endured flow of latest point answers to aid innovation, cope with particular desires and provide new cost,” Eichinger says. “The developing effect of virtual commerce will drive greater investment in supply chain analytics, and the trap of faster choice-making and removing inefficiencies will force investment in clever machines and IoT and the associated SCM software.”

The top five SCM agencies, by way of revenue, are:

1. SAP ($2.Nine billion)

2. Oracle ($1.5 billion)

3. JDA Software ($476 million)

4. Infor ($243 billion)

5. Manhattan Associates ($219 million).

By the point of evaluation, SAP’s supply chain software program sales are nearly twice that of Oracle’s, and Oracle’s are roughly 3 instances larger than JDA’s. So it’s nevertheless very a lot a marketplace dominated by comprehensive solution suite vendors and several smaller point answer vendors.