Thursday, 7 September 2006

SAP, Oracle and i2 Technologies are the Top SCM Vendors

Spending growth on supply chain management (SCM) software solutions will more than double this year, from 3 percent in 2005 to 7 percent this year, according to an AMR Research report. SAP has emerged as the top SCM vendor in terms of revenue...

SAP landed a hatrick as it emerged as the top Supply Chain Management (SCM) vendor in terms of revenue, and outpaced the market with growth of 6%. Oracle, i2 Technologies, Manhattan Associates, and Infor round out the top five vendors in revenue in the space. AMR Research has released a report stating that the SCM applications market experienced slight growth in 2005, increasing 3% to USD 5.6 billion. Environmental factors such as globalisation, leaner supply networks, increased customer expectations, more mass customisation, and increased demand variability are all affecting the current SCM market.

“New business focuses and pressures are driving pockets of vendor innovation and renewed corporate spending in supply chain initiatives,” said Mark Hillman, senior research analyst at AMR Research. “However, spending is tempered by the fact that corporate supply chain organisational maturity is still relatively low, limiting adoption. In addition, consolidation will continue to play a significant role in 2006.”

Supply chains are becoming increasingly global, complex, and interdependent—forcing companies to extend planning beyond the four walls. Largely due to this trend, the top SCM application growth area for 2005 was the inventory configuration and policy technology category, which posted a healthy license growth rate of 35%. Supply chain network design license growth was 21%. The report also found that application hosting/subscription was the fastest growing SCM delivery model, at a 16% growth rate.

Report highlights include:

• Previous generations of SCM solutions were technology-driven, but vendors are now focusing more on actual business pain points.
• Companies now see the need for more real-time information from their suppliers and channel partners to offset unfavourable macroeconomic trends.
• Within SCM, sales of inventory optimisation solutions will grow by 35 percent this year and network design solutions will grow by 21 percent.
• Top Market share leaders: SAP (12%), Oracle (10%, i2 (5%) and Manhattan Associates (4%).
• Smaller vendors like Vision Chain and TrueDemand are using data from RFID sensors and advanced demand planning solutions to give companies more immediate visibility of customer demand and actual inventory levels.