Supply chain management (SCM) and procurement software applications grew 10.8 percent in 2014, reaching $9.9 billion in 2014, according to Gartner, Inc. Outpacing most software markets, Gartner attributes solid growth in this software segment to the competitive advantage that the supply chain delivers to businesses in terms of driving business growth goals, including improved customer satisfaction, greater business agility and operational improvements.
"Organizations modernizing supply chains drove opportunity for both large-suite and specialized providers to become more agile and drive innovation within their businesses during 2014," said Chad Eschinger, research vice president at Gartner, in a statement. "SCM offerings delivered as cloud showed above-market growth of 17 percent, while new on-premises licenses also grew significantly at nine percent, as organizations sought to modernize their supply chain portfolio through a variety of delivery models."
Cloud-based offerings in the supply chain software market are becoming the norm as businesses move more of their critical applications to the cloud. Typically, cloud deployments require a smaller capital investment, thus a faster return on investment. Infor, for example, recently announced the availability of Infor Supply Chain Execution (SCE) in the cloud. Now offering cloud or on-premise deployment, the solution offers warehouse management, labor management, 3PL billing and transportation execution in a single, unified solution. The platform optimizes inventory, warehouse space and labor in the warehouse while streamlining supply chain business processes. The cloud option provides easy deployment and the highly scalable cloud environment makes it easy to maintain, said the company.
Another new cloud product is the DynaSys DSCP. Like many supply chain tools, the new demand and supply chain planning solution is available in the cloud and on-premise. The new tool is designed to simplify demand and supply chain planning and includes forecasting, planning, optimizing and performance analysis, enabling customers to quickly respond to changes in the global marketplace, said the company.
The Gartner report, "Market Share Analysis: Supply Chain Management and Procurement Software, Worldwide, 2014," reveals that SAP retained its leadership in the market, growing 19.9 percent and extending its lead within the SCM market with 25.8 percent market share. The company “continues to innovate and introduce new and acquired SCM products to the market, and has been able to upsell solutions within its large and established ERP installed base,” said Gartner.
Rounding out the top five are Oracle, JDA Software, Manhattan Associates, and Epicor. Oracle held on to its second position ranking of supply chain technologies, and the largest within the supply chain execution (SCE) segment, said Gartner. However, Oracle’s market share has dropped from 16 percent in 2013 to 14.6 percent in 2014.
JDA Software, ranked No. three with 4.4 percent of the global market, “remains the largest pure-play, supply chain-focused vendor despite a decline of 1.7 percent since 2013,” said Gartner.
"For the most part, building off several years of vendor consolidation, 2014 represented a favorable environment for supply chain technologies," added Eschinger. "The 2012 strategic acquisition and business combination activity of SAP and JDA Software demonstrated growth and stability during 2014, as organizations became more comfortable with the vendors' direction and messaging. However, we can expect a new wave of acquisitions to continue to drive market disruption in 2015."
However, Gartner said the SCM market is fragmented with the top 10 vendors accounting for about 55 percent of total market share. The remaining 57 vendors posted nearly 10 percent growth in 2014, which indicates “strong demand for specialized offerings that are competitive, and often complementary, to the larger-suite providers' offerings.”
A recent example is a new supply chain simulation tool from ToolsGroup, a global provider of supply chain planning and demand analytics software. The “Instant Replay” tool enables planners to review historical events and compare multiple scenarios at a detailed daily/customer/SKU-location level. “Most supply chain simulation tools are forward-looking and only offer an aggregated view. Instant Replay uniquely lets users retrospectively analyze demand, inventory, supply and service level events,” said the company.
In the area of electronic data interchange (EDI), HighJump recently announced a new purchasing integration for the HighJump TrueCommerce EDI SuiteApp, the company’s NetSuite cloud-based electronic data interchange (EDI) solution. HighJump Software now offers an inclusive EDI solution for NetSuite customers who need sales, warehouse and/or purchasing integration. The addition makes it easier and more affordable for NetSuite users to exchange EDI data with suppliers, and improves the efficiency of their own businesses through faster and more accurate order placement, said the company.