Tuesday, February 19, 2013
SCM IT Expert Predictions for 2013
SCM IT Expert Predictions for 2013
From this week’s article ‘Information Technology in a Supply Chain’ the future of IT in the supply chain we will continue to see the macro processes drive towards closer integration and represent a larger fraction of the market share[i]. While it is likely that some consolidation will continue in the market as ERP vendors continue to pressure and incorporate smaller companies, there is still opportunity for the ‘best-of-breed’ to capture new market share based on improved functionality and ‘software-on-demand’ delivery method that requires less hardware and installation and can also be less costly[ii]. Growth will be dependent on the ability to utilize macro data as it relates to TMF, transactional management foundation. Finally Microsoft has been a sleeping giant that is on the precipice of awakening and their presence in the field is expanding[iii].
A recent article from supply chain digests summarizes many predictions from notable experts in the field about the progress of supply chain management including IT throughout 2013. The first of which is the change from supply-centric thinking to a more horizontal market centric thinking that will be dependent not on the existence of IT, but the analytic yield it can provide In allowing an enterprise to reach efficiency horizontally[iv]. Lora Cecere also notes that there is new opportunity for best-of-breed companies to forge new market share as leaders has slowed in their ability to provide increased efficiency. Lora also notes that people will move away from categorizing their supply chains from ‘silly acronyms’ such as CRM SRM ISCM BI and ERP into utilizing cloud based software on demand services to further drive their analytics in a meaningful way[v]. Dwight Klappich from Gartner notes that while supply chain execution will continue to be dominated by major players, there will be a market shift in 2013 to utilizing cloud based services as Amazon, Microsoft and other best-of-breed players reach parity with onsite supply chain solutions[vi]. These cloud based services allow for increased points of contact between a SCM IT solution and employees allowing for greater integration. Furthermore cloud based services are easier to iterate and can potentially offer lower maintenance costs which have historically hindered the ROI on supply chain solutions[vii]. Simon Ellis from Manufacturing Insights believes that large IT companies will be able to better integrate these cloud services into their existing IT infrastructure and utilize existing cloud infrastructure from Amazon and Microsoft to develop in tandem their own integrated solutions which will allow for greater control and customizability while increasing ownership and moving expertise and costs internally[viii]. Finally Ellis notes that ‘Big Data’ will no longer be an mis-understood buzz word thrown around the industry and instead companies will finally start understanding how to leverage multidimensional data in improving their own supply chains for increased performance[ix].
While the ability to integrate macro services such as SRM, ISCM, CRM and TMF is an ability that will continue to be dominated by ERPs and market leaders such as Oracle and SAP there exists opportunity for growth from new big players such as Microsoft and Amazon but also Best-of-breed players. The ability to offer software-on-demand cloud based analytics allows for lower implementation and hardware costs, lower maintenance, higher control and ownership, and more customizability for companies to use giving these cloud based services higher parity with the big players. Finally we will continue to see best-of-breed players utilize data in new meaningful ways further delivering the promise of business ‘intelligence’ and analytics moving further away from just the collection of ‘big data’.
Questions: Will we see Amazon and Microsoft jump ahead of other best-of-breed players or will they be able to utilize 3rd party cloud based services and achieve the same parity? What will SAP and Oracle do to combat the rise of cloud based analytics and/or will they shift to cloud based platforms also?
[i] Information Technology in a Supply Chain. Introduction to Supply Chain Management. P169
[iv] Lora Cecere. Predictions from Supply Chain Gurus for 2013. Supply Chain Digets. Supply Chain Insights. February 6th 2013. http://www.scdigest.com/ASSETS/ON_TARGET/13-02-06-1.PHP?CID=6696
[vi] Dwight Klappich. Gartner. Predictions from Supply Chain Gurus for 2013. Supply Chain Digets. February 6th 2013. http://www.scdigest.com/ASSETS/ON_TARGET/13-02-06-1.PHP?CID=6696
[viii] Simon Ellis. Manufacturing Insights. Predictions from Supply Chain Gurus for 2013. Supply Chain Digets. February 6th 2013. http://www.scdigest.com/ASSETS/ON_TARGET/13-02-06-1.PHP?CID=6696