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Demand for supply chain management software rises

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Posted on 28/05/2013 by Wayne Brophy FCILT

Despite last year’s difficult economic conditions, the global supply chain management (SCM) software market rose 7.1 per cent. Now, the market nets $8.3 billion (£5.5 billion) in revenue, according to Gartner, a leading provider of technology research.

Furthermore, software as a service SCM offerings fared even better in 2012, as its market share grew 13 per cent.

Who exactly is responsible for the increase in demand? Not the UK, apparently. Vice president of Gartner research, Chad Eschinger, said: “North America and Western Europe continue to be the prime consumers of SCM software, with nearly 77 per cent of market revenue. However, Western European growth slowed and Asia/Pacific continued to experience robust growth, reflecting a shift toward investment in technology in emerging-market manufacturing centres.”

Although British businesses have much to gain by implementing SCM software, upfrontcosts are discouraging investors. Slashed IT budgets and worldwide economic conditions are making SCM difficult. However, businesses which prioritise spending on SCMsoftware are gaining a competitive advantage in the global market.

Software programmes can bring streamline supply chains and improve operations in countless ways. By bringing all essential elements of a supply chain together – warehousing, sales, marketing, shipping, customer service, management and purchasing – software can increase productivity and enhance transparency throughout the supply chain. In addition, it could help prevent and correct problems before they become costly. In effect, SCM software could pay for itself over time.

SAP remained the number one provider of SCM software solutions, with market share increasing 11.6 per cent in 2012. In terms of software revenue, the company earned $1.7 billion (£1.1 billion) last year, holding onto 20.8 per cent of the market. Oracle grew 12.1 per cent over the same period, while JDA Software also showed significant sales increases.

The findings and their potential impact on the supply chain industry will be discussed in further detail at the Gartner Supply Chain Executive Conference 2013. The event is scheduled to be held in London on September 23rd to 24th.

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