The latest market share data from Gartner, Inc. shows that adoption of Supply Chain Management (SCM) software grew immensely in 2017. According to Gartner, total worldwide market revenue grew 13.9 percent to reach a total of $12.2 billion last year.
Since SCM is an extremely common and popular Enterprise Resource Planning (ERP) integration tool, the editors here at Solutions Review found this information provided by Gartner to be extremely helpful and relevant. After all, it’s important to consider all aspects and features of an ERP solution when starting the process of searching for an ERP solution – or if you’re thinking of replacing an existing one.
“The SCM market’s revenue performed well in 2017, continuing the trend of accelerating growth from recent years. This is happening because SCM technologies are a key component of delivering digital business strategies,” said Balaji Abbabatulla, research director at Gartner. “SCM technologies create digital value by optimizing the flow of products, services and related information from source to customer and from customer to source.”
Generally speaking, SCM is defined as the management of the flow of goods and services, involving the movement and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to point of consumption. For manufacturers, managing the supply chain is extremely important and can even be a ‘make it or break it’ type of situation
[In their press release, Gartner provides a chart showing the worldwide SCM revenue market share from 2016-2017, which includes the prominent SCM software vendors and their revenue growth and market share. The top five vendors include: Oracle, SAP, JDA, Infor, and Manhattan Associates.]
“The top five vendors in the SCM market all increased revenue, but only JDA and Infor grew their market share by outperforming the total market growth,” added Abbabatulla. “The ‘other vendors’ category is growing significantly faster than the top five market incumbents, but the top five rankings remained the same in 2017. Smaller cloud-native vendors enjoyed an average revenue growth of 41.4 percent in 2017. The top five vendors are defending their market share by pivoting toward cloud-first strategies and quickly introducing new products through development, acquisition or partnerships on their cloud platform.”
Because cloud computing solutions are driving growth in the market, more midsize organizations have starting adopting SCM solutions to drive their digital business models. These midsize businesses help increase revenue growth because they are “new net customers of SCM products and are not bound by replacement and upgrade cycles from legacy investment,” according to Gartner.
“Cloud solutions typically have lower barriers to entry and are more easily scalable, and are therefore a better fit for midsize organizations looking at SCM for competitive advantage,” said Abbabatulla. “We expect that vendors offering a well-defined, vertical-industry-oriented strategy for midsize organizations will grow rapidly over the next five years.”
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