Fuel for Supply Chain Services Growth
The ERP industry is undergoing a radical shift where organizations are reevaluating the ERP service providers of prospective technology providers, and weighting services offerings much heavier, during the software buying cycle.
Prime emphasis goes to feature, function and cost considerations in vendor selection, organizations are placing a much higher prioritization on services offered – including those relative to cloud, ongoing solution maintenance and performance, and training and education.
According to the Gartner report Forecast Analysis: Application Solution Services, Worldwide, 2010-2015, the overall market for enterprise application services will increase from $133.5 billion in 2011 to $170 billion in 2015, representing a 6.7% CAGR, 2010 through 2015.
So what’s fueling the growth of enterprise application services today, especially in terms of supply chain? In the lines to be followed, we will deep dive into few trends driving the demand for supply chain services.
Supply Chain a Top Priority
Organizations across the board, from manufacturers to retailers, have reached an inflection point; they understand their supply chains need to be a strategic, enterprise-level priority in order for their businesses to remain viable. That realization brings amplified investment and executive-level sponsorship to supply chain initiatives including supply chain services.
Since supply chain prioritization has elevated to the C-level, expected business outcomes now include competitive advantage, revenue generation, operational transformation and scalability for future growth. To ensure solutions implemented can meet and exceed an organization’s strategic business goals, it is essential for companies to choose a provider that has a services organization as robust and proven as its solutions.
When evaluating a supply chain services organization, look for a provider that employs domain experts who understand the industries, regions, business challenges, competitors and solution roadmap specific to your organization; and has a track-record of successful deployments specific to each of those.
New Technologies like Cloud / Big Data
One would be hard-pressed to initiate a supply chain services conversation today without talk of the Cloud or Big Data; and rightfully so with benefits like Flexibility. Speed to value. Ongoing solution maintenance and performance. Reduced risk.
For those reasons and more, these newer technologies are one of the strongest contributors to the growth of supply chain services today and will continue to be in the future. Companies of all shapes and sizes are fast realizing that by using these new technologies — and then having the experts most knowledgeable about these technologies running them on a daily basis— the organization can focus on its core business forward while outsourcing the technology part of business.
Dissatisfaction with traditional ERP tools
Next in line contributing to the growth of supply chain services comes down to enterprise technology buying cycles, and the dissatisfaction many organizations are feeling with their ERP systems relative to supply chain management.
For many companies who invested heavily in ERP systems, years have lapsed and they are still waiting to see value relative to their supply chain. That lack of ROI and increasing TCO from ERP, coupled with the greater emphasis on supply chain initiatives as a strategic business priority, has many companies reaching the conclusion that best-of-breed supply chain solutions combined with world-class supply chain services are essential to ensure their organizations, customers and stakeholders receive maximum short-term and long-term value from their supply chain investments.
Looking forward to get more ideas from the community members.
Interesting article .
You mentioned lack of ROI from ERP systems compare to it's CAPEX and OPEX. Interested to see the data points and figures, if you have any , to support it.