Supply chain management to expand substantially over 2017, says Gartner

Driven by an increase in SaaS deployments, the SCM market is projected to reach $19bn by 2021.

Tags: Cloud computingGartner Inc. ( Arab Emirates
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Supply chain management to expand substantially over 2017, says Gartner Chad Eschinger, managing vice president at Gartner.
By  Alexander Sophoclis Pieri Published  July 16, 2017

Gartner's latest report on the global supply chain management (SCM) market has found that the segment will surpass $13bn in total software revenue by the close of 2017. Marking an 11% increase over 2016, Gartner has also projected that the market will reach $19bn by 2021, driven by new opportunities with Software-as-a-Service (SaaS).

The move to SaaS diverts costs away from a traditional CAPEX to an OPEX model, and as a result, SCM technology has quickly become the ideal choice for small to midsize businesses (SMBs), as well as enterprises operating in emerging markets.

The market has also become increasingly competitive with SCM providers setting themselves apart from the competition with the introduction of new digital business technologies. These include in-memory technologies, IoT, machine learning and mobility solutions.

Commenting on the SCM market increase, Chad Eschinger, managing vice president at Gartner, said: "Between 2017 and 2021, Gartner forecasts nearly $6bn in total software revenue will be added to the SCM market.

"Digitalisation is increasing demand for agility and forcing new business models, which is boosting spending in the SCM market."

Gartner's report also projected that by 2021, SaaS will account for more than 35% of total SCM spending, while sales of on-premises licenses will reduce to less than 20% of total spending. Of the type of infrastructure expected to be in place, the market intelligence firm expects hybrid SCM environments that are connected with both Cloud and on-premises applications to become more commonplace.

"To help support next-generation supply chains and real-time business requirements, we expect consolidation of existing solutions into broader, multidomain suites, but also a continued stream of new point solutions that will support innovation, address specific needs and offer new value," added Eschinger.

"The growing impact of digital commerce will drive greater investment in supply chain analytics, and the lure of faster decision making and eradicating inefficiencies will drive investment in smart machines and IoT and the associated SCM software."

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