Gartner Says Supply Chain Management Software Revenue Is on Course to Reach $10 Billion in 2014
Source: Gartner Press Release View: 278 Date: 2014-07-30

Supply Chain Management Revenue to Grow 12 Percent, the Highest Rate since2011

 

Analysts to Discuss Creating Excellence and Sustainability at the GartnerSupply Chain Executive Conference 2014, September 10-11 in London


Revenue supply chain management(SCM) software is on track to reach $10.0 billion in 2014, a 12.2 percentincrease 2013, according to Gartner, Inc. This would be the highest annualgrowth rate since 2011.


"The market for supply chaintechnologies is buoyant," said Chad Eschinger, research vice president atGartner. "Both supply chain execution and supply chain planning revenuesare on course to grow at double-digit rates in 2014." 


In the fourth quarter of 2013, Gartnerconducted a survey of 447 supply chain professionals across North America. Whenasked which obstacles hindered their progress toward achieving organisationalgoals, respondents identified inaccurate forecasts of demand for products andvariability of demand as the leading ones. Both can be overcome with the helpof supply chain initiatives and technologies. 


Forty-three per cent of the supply chainprofessionals surveyed indicated that, to deal with rising levels ofintegration complexity, they were strongly committed to a single underlyingtechnology platform that would improve the visibility of internal processes andenable more effective communication and collaboration with suppliers andbuyers. "This trend toward a unifying application platform is growing andwill further drive sales of supply chain solutions as more companies adhere toa platform strategy," said Mr. Eschinger.


Through 2018, Gartner estimates thatnearly 70 percent of businesses will pursue a single-platform (underlyingarchitecture) strategy to integrate disparate systems, to improve supply chainvisibility. 


Market Profile


Although the SCM software market isnearing the point at which over 60 percent of its revenue will derive existing implementations, in terms of new spending in 2013 approximately 16percent of SCM investments were by companies adopting this software for thefirst time. Gartner expects this figure to fall to less than 10 percent by2018, and that the vast majority of "new" spending will come organizations that already have SCM and are purchasing add-on functionality."Through 2018, 40 percent of new spending and 80 percent of recurringend-user spending will focus on advancing and extending foundational supplychain capabilities," said Mr. Eschinger. 


Purchase Style


Organizations that adopt supply chainsoftware still prefer hosted or on-premises applications. This is largelybecause software-as-a-service (SaaS) SCM solutions have not reached functionalparity with leading on-premises SCM offerings. 


"The market for SCM solutions isinfluenced by a climate that continues to make large capital expendituredifficult for many organizations. This environment will drive manyorganizations to adopt solutions that are deemed ‘best of breed’ and oftendelivered as a subscription, which provides more focused capabilities andtypically enables less expensive and quicker deployments," said Mr.Eschinger. "We expect that, through 2018, twice as many organizations willpurchase private cloud and hosted offerings each year as those that purchasemultitenant SaaS offerings." 


More detailed analysis is available in"Forecast Analysis: Supply Chain Management Software, Worldwide, 1Q14Update," a report available on Gartner’s website at http://www.gartner.com/document/2774917.


Gartner analysts will discuss supplychain planning and segmentation at the Gartner Supply Chain ExecutiveConference 2014, September 10-11, in London, U.K. For information about theevent, please visithttp://www.gartner.com/technology/summits/emea/supply-chain/.For media registration, please contact Laurence Goasduff at Gartner on laurence.goasduff@gartner.com. 


Additional information the eventwill be shared on Twitter at http://twitter.com/Gartner_inc andusing #GartnerSCC.


Contacts

·        Rob van der Meulen

·        Gartner

·        rob.vandermeulen@gartner.com


·        Janessa Rivera

·        Gartner  

·        janessa.rivera@gartner.com


About Gartner


Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. We deliverthe technology-related insight necessary for our clients to make the rightdecisions, every day. CIOs and senior IT leaders in corporations andgovernment agencies, to business leaders in high-tech and telecom enterprisesand professional services firms, to technology investors, we are the valuablepartner to clients in over 9,000 distinct enterprises worldwide. Through theresources of Gartner Research, Gartner Executive Programs, Gartner Consultingand Gartner Events, Gartner works with every client to research, analyze andinterpret the business of IT within the context of their individual role.Founded in 1979, Gartner is headquartered in Stamford, Connecticut, USA, andhas 6,400 associates, including more than 1,480 research analysts andconsultants, and clients in 85 countries. For more information, visitwww.gartner.com.

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