Where is the Supply Chain Technology Market Headed?

Modern day supply chains are becoming increasingly global, multi-tiered and complex.

Agility, responsiveness, compliance and risk management are the driving factors of differentiation for both manufacturers and retailers alike.

Customers are leveraging software platforms and service firms to drive process-oriented and organizational changes focused on achieving corporate goals.

The Big software firms in the supply-chain space – SAP, Oracle, Ariba (now acquired by SAP), JDA Software (acquired by RedPrairie), Manhattan Associates, Infor as well as other best-of-breed firms are embarking on several initiatives that are defining the trends for the future. These trends can be broadly classified as:

Holistic Solution Landscape: Supply chain is one of the next frontiers in the application space after ERP. To address the call of customers, there is an increasing consolidation and a renewed focus from the big software firms, whose traditional strength has been in ERP, to expand their functionality into supply chain and procurement.

This is drastically narrowing the gap in the functionality and creating a single-stop approach around the ‘end-to-end’ process. This goal is being achieved through both organic (higher product R&D budgets in this space) and inorganic means (e.g. acquisition of Ariba, JDA Software).

Cloud and Mobility: The most common deployment model in the supply chain and procurement space has always been the on-premise deployment model since companies disliked deploying data outside their firewalls due to various reasons including security. With the increased number of success stories from cloud vendors in the CRM and HR space, the big supply chain software players started to jump into the fray and have made their own acquisitions. The trend shift towards a cloud-based deployment in the supply chain and procurement space is a steady and irreversible one.

These trends have tremendous ramifications for the large software players who initially struggled with embracing this trend due to the adverse impact in upfront license and ongoing maintenance revenues for them. Mobility is another upcoming trend in supply chain and procurement to address processes such as order fulfillment, approval work-flows and reviewing the dashboard analytics.

As work places merge the personal and official communication devices, enabling employees to leverage a single device, the consumption approach is increasingly altering. Big software firms are in a race to offer this channel for their workflow and analytic applications.

Related (SC24/7 Search): Cloud and Mobility

Big Data and Analytics: The shift in the deployment and consumption model is resulting in a new trend named ‘Big Data’. Objective and subjective granular level data is now being collected, requiring fast in-memory processing, robust databases and tools to consume the data. There is an increased emphasis on analytical and optimization tools where customers are able to analyze and do what-if simulations.

The software firms that can meaningfully link an overall decision making planning system such as sales & operations planning or network optimization systems to the granular planning and execution system in a closed-loop basis, that is measurable, will have the best chance of gaining the high ground in the market-share.

Related (SC24/7 Search): Big Data and Analytics

Collaboration and Social Networking: Inter-company and intra-company supplier and customer networks, collaboration and social networking for business to business purposes (example purchase order workflow collaboration or drawing on peer reviews for supplier evaluation) during different processes of the supply chain are gaining traction. Coupled with the mobility trend, customer and supplier collaboration scenarios are also responsible for generating the Big Data that needs to be constantly crunched and analyzed.

The key emerging question seems to be if software providers of the future will continue to be product functionality providers or will rather become either content or platform providers. We will find out in the next few years but in the meantime we are seeing software firms making large investments in extending their supply chain and procurement applications to address this trend.

Related (SC24/7 Search): Networks/Control Towers and Social Networking

Compliance and Sustainability: Software companies continue to build initiatives for providing a platform for organizations to work through their green supply chain or their trade and compliance mandates. This is, for example, embedded in both their planning applications to ensure that contract negotiations abide to the trade compliance rules for vendor selections and in execution software, where custom regulations for transit & export regulations are adhered to.

Related (SC24/7 Search): Sustainability

So, now that we have studied these trends, back to the basic question. Where is the supply chain technology market headed? As consolidation in this industry continues to rationalize the software firms in this space and the role of software and services firms continue to evolve, the nature of the best of breed innovation culture itself is changing and is the one to watch.

The answer lies in the above trends. Those software or services firms that will be able to figure out the magic formula will be the ones to watch out for. What will this optimal formula be and who will be best positioned for success?

About the Author

Naresh Hingorani - Vice President, Global Strategic Market Enablement
As the Vice President, for the Global Strategic Market Enablement function at Bristlecone, Naresh is responsible for all Go-To-Market Strategy, Corporate and Field Marketing, Inside Sales and Strategic Alliance Development. Prior to taking this role, he successfully launched and built Bristlecone’s Integrated Sourcing and Procurement Practice.